Most Read Contributor in South Africa, September 2016
On 23 November 2012, the South African Revenue Service (SARS)
published draft legislation for the Automotive Production and
Development Programme (APDP) intended for implementation from 1
A new rebate item 317.03 will be inserted into Schedule 3:
Industrial Rebates of Customs Duties to the Customs and
Excise Act (Act 91 of 1964) ("the Act") to allow for the
importation of original equipment components for the manufacture
road tractors for semi-trailers
motor vehicles for the transport of ten or more persons,
including the driver
motor cars (including station wagons)
motor vehicles for the transport of goods
chassis fitted with engines of the above vehicles
The original equipment components imported will receive a rebate
of full duty less the duty payable on the value calculated as
The customs value and imported component value of imported
original equipment components sold as part of vehicles sold in the
Southern African Customs Union (SACU)
+ The Volume Assembly Allowance ('VAA') on
- The VAA on vehicles sold in the SACU
- The value of production rebate credit certificates
to the point that the value is reduced to nil.
The value for Volume Assembly Allowance will be calculated as
a. in the case of specified motor vehicles manufactured for the
SACU market, the recommended retail list price (including options),
(exclusive of VAT, excise duty and environmental levy)
b. in the case of specified motor vehicles exported outside the
SACU, the "price free on board"
c. less a company specific percentage (CSP) on a quarterly
The value of the PRCC's will be based on the production
incentive (PI), that is basically a percentage (PI factor) of the
difference between the selling price and material (value-added or
VA), earned by the final manufacturer in South Africa of eligible
products. For purposes of the APDP, 25% of certain material, also
referred to as standard material, will qualify for the PI.
The existing rebate item 317.06 that allows for a full rebate on
automotive components for use in the manufacture of original
equipment components for supply to a motor vehicle manufacturer
will be amended to allow for rebate item 317.03 and for a
specified motor vehicle manufacturer as defined in rebate
The existing rebate item 460.17 that allows for a rebate of duty
on imported automotive components, on the vehicles listed above and
their chassis, against import rebate credit certificates (IRCC)
earned by the motor industry will be retained and changes will be
made to allow for a rebate of duty against PRCCs earned by the
motor industry under the APDP.
A new drawback item to allow for rebate item 317.03 will be
inserted under drawback item 536 that allows for a full refund of
duty on automotive components on which duty has been paid and which
have been supplied to a motor vehicle manufacturer for use as
original equipment components in the manufacture of specified motor
vehicles or which have been incorporated in original equipment
components supplied to motor vehicle manufacturers. Under the new
provision the imported component value has to be declared on a From
C1 and it must be produced on request to qualify for the
The existing drawback items 537.03 and 538.00 provides for a
refund of duty on imported vehicles and components qualifying under
the Motor Industry Development Programme against IRCCs earned by
the motor industry. The existing provisions of drawback items
537.03 and 538.00 will be retained and a new provision inserted to
provide for a refund of duty on imported vehicles and components
qualifying under the APDP against PRCCs earned by the motor
industry under the APDP.
SARS has also published copies of the APDP Quarterly accounts
and an APDP Information document published by the International
Trade Administration Commission.
Comments on the draft legislation were due by 7 December
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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