SARS’ demands rejected in landmark ruling

According to a Business Day report quoting Duane Newman, a partner at Deloitte, the penalty guidelines define procedures for custom offences and provide a guide for imposing penalties on those people who did not comply with customs laws. In the case at issue, SARS deviated from its own policy and procedure, Newman said. SARS received information from a former employee of licensed firearm dealer Formalito that the company had under-declared the value of imported goods. An investigation by the Receiver found that there had been an under-declaration of R695 652. SARS demanded payment of that sum and sought payment of a penalty of R3m, equal to the value of the imported goods. However, in a landmark ruling the court found that when determining the monetary value of the penalty, SARS had ignored its own customs offences and penalty policy. Full report in Business Day Judgment