Understanding the NRCS levy returns on imported regulated products

NRCS requires levy returns from importers and manufacturers of products under its regulation. This is an amount payable to NRCS based on the quantities imported or manufactured by a specific company. The levy returns are submitted twice a year for the periods January – June and July – December. The levy returns for July – December 2021 are due on 31 January 2022.

The submission of levy returns by importers and manufacturers of regulated products to NRCS is not optional. It is required by law. According to NRCS Act No 5 of 2008, any person who imports, sells or supplies a commodity, product or service to which a compulsory specification applies must; keep or provide to the NRCS such records as may be prescribed by the Minister; pay any fees prescribed by the Minister after consultation with the Minister of Finance.

How are levy returns calculated?

The formula for calculating total levy returns is simply: Total Quantity Manufactured and/or Imported x Applicable Levy Tariff. Levy returns are not calculated based on sales figures. Rather, they are calculated based on quantities manufactured or imported.  

NRCS Levy tariff amounts vary according to product and are paid per unit or for a certain number of units. For example, the levy payable for each television imported into or manufactured in South Africa is currently R1.41. Meanwhile, the levy payable for each washing machine is currently R2.42. There is therefore considerable variation in levies.

The levy tariffs increase every year and are published in the Government Gazette, so it is crucial to use the latest rates. The latest rates are always indicated on the levy returns form. There is no connection between NRCS levy tariffs and Customs tariffs on imports. They are entirely separate. 

Consequences of not submitting levy returns

Levy returns can have negative consequences if they are not submitted to NRCS. When an application for a new LOA or renewal of an existing LOA is submitted, this can delay the issuing of your company’s LOA. Submission of levy returns maybe requested before an LOA is issued.

In addition, the NRCS may estimate the quantity imported or manufactured and hold the importer or manufacturer liable for the levy so calculated. According to sections 6 and 7 of the NRCS Act 2008, the NRCS may estimate quantities imported or manufactured and hold levy payers responsible. A levy estimate issued in terms of sub-regulation (6) of this Regulation shall, for purposes of Court proceedings, constitute prima facie proof of a levy that remains unpaid.

Furthermore, if a container is detained by Customs or NRCS either for not having submitted a LOA during Customs clearance, up-to-date levy returns will need to be provided when applying for an embargo release. An application for this release is made when a regulated product has been imported without a valid Letter of Authority. Upon approval of the Embargo release application, the Container will be released with the condition that the products cannot be sold.

Last, the NRCS inspects randomly to ensure compliance. During these inspections, the NRCS official requests levy returns for specific periods. There is a problem if no levy returns can be provided.  

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