The Minister of Trade, Industry and Competition Mr Ebrahim Patel today welcomed the decision of the Supreme Court of Appeal (SCA) that has a bearing on the ability of the SA Revenue Service (SARS) to seize illegally imported clothing.
The SCA overturned a decision of the Gauteng High Court in a matter involving the seizure of clothing imported into South Africa at prices that SARS and the Minister contended were clearly under-declared simply in order to evade customs duties. The SCA held that the High Court erred in holding that the decision of SARS to seize the imported clothing was not lawful.
The court case related to SARS not releasing 19 containers of clothing imported because it suspected that the value of the clothing in the containers has been under-declared in order to enable the importer to pay less customs duty than it is lawfully required to pay. The central issue in the litigation was whether this provided a justifiable basis for SARS not to release the containers.
Examples of the under-declaration of clothing were men’s suits with an alleged value of R4.74 per suit and girls’ suits with an alleged value of R1.81 per suit.
In an affidavit provided by Minister Patel to the court, he stated, “The under-declaration of clothing imported from countries such as China is a systemic problem in South Africa. A graphic illustration of the extent of the problem is this: in 2018 the value of the exports of textiles and clothing goods from China to South Africa as reported by the General Customs Administration of China to the United Nations was US$ 2.4 billion, whereas the value of the imports of textiles and clothing goods into South Africa from China as reported by SARS to the United Nations was US$ 1.5 billion. That is a difference of US$ 900 million even though the two values should be substantially the same.”
In a statement welcoming the decision announced this morning, Minister Patel said, “The fraudulent import of clothing, textiles and shoes is destroying thousands of local jobs, depriving the fiscus of revenue and damaging small and medium manufacturing firms. I welcome the decision of the SCA which will help to ensure that the law is upheld and that fair competition is fostered.”
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