22 Feb 2019

Levi Strauss (Pty) Ltd v SARS

by Freek van Rooyen, Partner, Johannesburg,

Freek van Rooyen, Partner at Shepstone & Wylie’s Johannesburg office, and customs and excise specialist, represented Levi Strauss in a dispute with SARS. The matter involved questions as to whether buying commission and royalty payments should be added to the invoice price for purposes of calculating the transaction value on importation. Furthermore, whether an importer can rely on an origin certificate if goods are manufactured in a SADC member state but consigned directly to an importer/consignee in South Africa, also being a member state, even though the invoicing and paper trail is not generated directly between the manufacturer/consignor and importer/consignee.

Judgment was handed down today in the High Court in Pretoria and Levi Strauss’ appeal against the determinations were upheld. On the facts and relying on the Delta Corporation case the Court held that the royalty payments should not form part of the transaction value. The same was held with regard to the buying commission. Regarding the origin dispute the Court held that the term “consignment” is defined and points towards the direct movement of the goods from a supplier in one member state to a consignee in another member state within the SADC region, being the criteria and not the underlying transactions resulting in such direct movement of the goods.

Should you have any questions regarding the judgment, you can contact any member of the customs team at Shepstone & Wylie Attorneys.