QI Logistics (Pty) Ltd v The Commissioner for the South African Revenue Service (SARS) (Case no 35089/2020) (8 August 2024)

Background:

The QI Logistics v SARS case focuses on import duties and penalties levied by SARS on the import of diesel. The clearing agent was held liable due to the agent’s failure to provide sufficient proof that the diesel had been exported.

Key issues:

1. Import Duties : The importation of goods into South Africa attracts import duties, however the liability is suspended / deferred if the goods are “removed in bond” or “removed in transit”. The liability ceases altogether once sufficient proof is provided to SARS that the goods were exported. Depending on the circumstances, both the importer and clearing agent may share the liability for the import duties levied.

2. Clearing Agent: The clearing agent is held liable until evidence can be provided that it was not party to the non-fulfilment or SARS was notified by the clearing agent of non-fulfilment or reasonable steps were taken by the clearing agent to prevent non-fulfilment of the exporting of goods.

Facts of the case:

QI Logistics, a company involved in the preparation and processing of clearance of customs documents, acted as the clearing agent on behalf of its clients to import diesel that would in return be exported to other countries. QI Logistics was, therefore, of the opinion that since the goods were being imported and then exported and that the relevant documentation, proving the goods were exported, were provided to SARS, no import duties should be levied on the goods imported.

QI Logistics was also of the opinion that they had submitted the necessary documentation required by SARS and is not accountable for the transportation, sale or export of the diesel.

Court Findings:

The court ruled in favour of SARS as the court found that QI Logistics failed to provide sufficient proof that the goods had in fact been exported.

The court held that QI Logistics was not able to furnish evidence that it had taken the necessary steps to prevent non-fulfilment or that it had reported any such non-fulfilment to SARS. The liability of QI Logistics, therefore, never ceased.

Conclusion

The court decided to dismiss the application. Consequently, the clearing agent was ordered to bear the costs with reference to the attorney-client scale. This decision underscores the court’s stance on the matter and the importance of ensuring adherence to the regulatory requirements regarding the clearing agent’s responsibility on the importation of goods.  

Read the full court case here:

QI Logistics (Pty) Ltd v The Commissioner for the South African Revenue Services