ALL FAQs

Value Method 1 - Does it matter if the seller is not paid directly by the importer?
No. The importer can pay a third party at the supplier's request in which case it becomes a condition of sale

Value Method 1 - If a branch office is involved, can Method 1 still be used?
Method 1 can still apply, if the branch is an independent legal entity and there is no price influence. Where goods are imported: Through a branch office which does not have a separate legal status of its own;

Value Method 1 - If an intermediary (e.g. selling agent) is involved, will Method 1 still be used?
Unless already included in the price, all selling commissions incurred by the importer with respect to the imported goods are to be added to the price actually paid or payable for those goods in terms of Section 67(1)(a)(i) of the Act.

Value Method 1 - What constitutes "interest charges" in terms of Section 67(2)(b)(vi) of the Act?
Charges for interest under a financing arrangement entered into by the importer for the purchase of imported goods may be excluded from the Customs value on condition that:

Value Method 1 - What evidence is required to prove "buying commission"?
The payment for buying commission mustbe shown separately from the price for the goods on the invoice or other commercial document. Further evidence in support of any claim

Value Method 1 - What evidence must be submitted when deducting "interest charges"?
The charge for interest must be separately distinguishable from the price for the goods on the invoice or other commercial document. Further evidence in support

Value Method 1 - What if the importer pays a third party royalty or license fee?
The circumstances of each import transaction and the conditions relating thereto, including the conditions pertaining to the payment of royalties and

Value Method 1 - What if the sale is subjected to any restrictions?
If the sale is subjected to conditions which restrict the importer's freedom to dispose of or sell the goods as he / she wish, you may not be abile to use Method 1.

Value Method 1 - What if there is no sale?
That rules out Method 1. Proceed sequentially through the succeeding Methods to the first method under which the Customs value can be ascertained.

Value Method 1 - What is "delivery cost"?
Delivery Costs are:The cost of transport;The cost of insurance, including global or blanket policies ; Container charges, for example, when hired for transportation of the imported goods;

Value Method 1 - What is a royalty or licence fee?
The term "royalty or license fee" descrive payments to a person for the right to use that person's patents, trademarks, copyright or for the "know how".

Value Method 1 - What is Method 1?
The primary method for Customs valuation is defined in Method 1 and imported goods are to be valued in accordance with the provisions of this Method whenever the conditions prescribed therein are fulfilled.

Value Method 1 - What items must be added to the price paid or payable?
The importer must add the following to the price paid or payable (unless they are already included): Commissions and brokerage: Certain payments for commission and brokerage,

Value Method 1 - When "free of charge goods" are imported, can the importer use Method 1 to ascertain the value for Customs duty purposes?
Not normally, because there is no price paid or payable by the importer to the supplier of the goods. The importer may be able to use Method 1 where:

Value Method 1 - Will Method 1 still be used for importations to prior orders; buffer stock; sales from stock and consignment stock?
Importation to prior orders: These occure when:An importer has been found by the selling agent and the goods are imported into the Republic of South Africa to fulfill the order.

Value Method 1 -Does it matter whether payment is in cash?
No, as long as documentary evidence can be produced that the amount paid was the price paid or payable. The importer can also pay by letter of credit or negotiable instruments.

Value Method 1 to 6 - Can the importer seek assistance from Customs to work out the method for Valuation?
It is recommended that the importer contacts the Valuation Section who are authorised to issue determinations in terms of all the Methods.

Value Method 1 to 6 - Can the importer use a fixed rate of exchange?
Invoiced Rand prices resulting from the conversion of foreign currency at fixed contract rates of exchange, negotiated between related suppliers and importers,

Value Method 1 to 6 - Can the importer use the rate of exchange at which he/she make settlement?
No.The importer must use the selling rate at the date of shipment as determined by the Commissioner in consultation with the S.A. Reserve Bank.

Value Method 1 to 6 - Can the Rand invoice be accepted if a forward exchange contract or fixed contract rates are used?
The Rand amount will be accepted as basis for Customs valuation, provided it can be proved beyond doubt that the Rand amount was arrived at by converting foreign currency at a rate

Value Method 1 to 6 - Must the importer always complete a valuation questionnaire?
No. A DA 55 form is normally completed when:The declared Customs value is disputed; or When a firm value determination is required from the

Value Method 1 -What does "related" to the supplier mean?
Persons (i.e. natural or legal) are related if: They are officers or directors of one another's businesses; They are legally recognised partners in business;

Value Method 1 -When does the importer have to include royalty payment in the Customs Value?
Royalty or licence fees payable to the seller are to be included in the Customs value if it: Relates to the imported goods; and Is paid as a condition of sale.

Value Method 2 - What if there are no identical goods?
This rule out the use of Method 2. Proceed to Method 3.

Value Method 2 - What is Method 2?
Where Method 1 is not appropriate, this Method must be utilised. It is based on the Customs value of identical goods exported to the Republic at or about the same time as the goods to be valued.

Value Method 3 - What are the conditions for using Method 3?
The conditions are the same as for Method 2.

Value Method 3 - What if the goods are not "similar goods"?
This rules out the use of Method 3. Proceed to the next Method. The importer has a choice to use either Method 4 or Method 5. The only condition is that the importer must submit

Value Method 3 - What is meant by "similar goods"
These are goods which differ in some respects from the goods being valued, but with due regard to their quality and reputation, like characteristics and like component materials:

Value Method 3 - What is Method 3?
If the Customs value of the imported goods cannot be ascertained under the provisions of Methods 1 or 2, this Method may be utilised. It is based on the Customs value

Value Method 4 - How do I arrive at the "sale in the greatest aggregate quantity"?
To determine the greatest aggregate quantity all sales at the same price aree taken together and the sum of all the units of goods sold at that price is compared to the sum of all the units of goods sold at any other price.

Value Method 4 - How does the importer arrive at the Customs Value?
The Customs Value is based on the price of each item (unit price) at which:The imported goods; or Identical imported goods; or Similar imported goods; are

Value Method 4 - May the importer deduct the actual profit and general expenses?
Yes, UNLESS the figures are inconsistent with those usual for sales in the Republic of imported goods of the same class or kind.

Value Method 4 - What deductions may be made from the unit price?
The following charges may be deducted: EITHER the commissions usually paid or agreed to be paid OR the addition usually made for profit and general expenses in connection with sales in South Africa of imported goods of the same class or kind

Value Method 4 - What if the goods are not sold in South Africa in the condition as imported?
If the importer so requests, the Customs value can be based on the unit price at which the goods are sold after processing in the greatest aggregated quantity to unrelated customers, due allowance being made for the value added by such processing.

Value Method 4 - What if there is no sale at or about the time of importation?
The Customs value may be based on sales that take place up to 90 days after importation. As you cannot ascertain the Customs value on the price at which the

Value Method 4 - What is meant by "goods of the same class or kind"?
This term means goods which fall within a group or range of goods produced by a particular industry or sector of industry in the country from which the imported goods were exported.

Value Method 4 - What is Method 4?
If the Customs value cannot be ascertained under the provisions of the previous three methods, this Method must be utilised provided the importer did not request to referse the order of application of Methods 4 and 5.

Value Method 4 -What evidence must be submitted?
Where a sale has taken place:The importer must be able to produce one of the following showing the unit price in the greatest aggregate quantity.

Value Method 5 - How does the importer arrive at the Customs value?
The Customs value is built-up value.

Value Method 5 - What constitute buying commission?
Among the tasks normally undertaken by a buying agent are the following:Acts for the account of the buyer;To find suppliers;

Value Method 5 - What evidence must the importer submit to determine the Customs value?
The importer must be able to get information about the cost or value of the item listed in the Act.

Value Method 5 - What if the information for Method 5 cannot be obtained?
In cases where the supplier do not wish to divulge information that might be regarded as commercially sensitive, arrangements may be made to allow the supplier to submit the said information directly for the attention of Head Office: Valuation.

Value Method 5 - What is Method 5?
If the Customs value cannot be ascertained under the provisions of Methods 1 to 4, Method 5 may be utilised.

Value Method 6 - How does the importer arrive at the Customs value on second-hand goods?
Goods acquired in a used condition, namely second-hand goods but which were not, used by the importer before entry into free circulation.

Value Method 6 - How does the importer arrive at the Customs value?
The Customs value must be arrived at by to the greatest extent possible, previously determined Customs values.

Value Method 6 - What evidence must the importer produce under Method 6?
This depends on which method is being flexibly used. It is recommended that the importer consult the Valuation Policy

Value Method 6 - What is Method 6?
It is the final method used to determine the Customs value and is called the "fall-back" method.

Value Methods 1 to 6 - Can the importer complete one valuation questionnaire per company?
A seperate Valuation Questionnaire must be completed for each and every foreign supplier under investigation.

Value Methods 1 to 6 - What is a valuation questionnaire?
It is a form the importer must complete to give information to Customs about the trading principals and the value declared on the import entry.

Value Methods 1 to 6 - What must the importer do if, all, or part of, any amount, to be taken into account in arriving at the Customs value is shown in a foreign currency?
The importer must convert to Rand any foreign currency amount which needs to be taken into account in arriving at the Customs value

Last Updated: 12/02/2016 12:19 PM     print this page
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