EFFECTIVE DATE

2010.06.11

EXTERNAL POLICY

TOBACCO INDUSTRY

EXTERNAL POLICY – TOBACCO INDUSTRY Revision: 2 Page 1 of 3

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 EFFECTIVE DATE
2010.06.11

1 SCOPE
a) The Policy applies to role-players in the tobacco industry and they describe:

i) Licensing and registration requirements;

ii) Other requirements - South Africa (SA) Diamond Stamp;
iii) Production of tobacco products;
iv) Accounting for tobacco products for excise duty purposes;
v) Declarations required for movement of tobacco products;
vi) Completion and submission of the monthly excise account;
vii) Assessment of excise duty;
viii) Payment of excise duty;
ix) Duty paid returns;
x) Keeping and retention of records; and
xi) Acquittals.

b) Un-cut tobacco leaf is not regarded as an excisable product but becomes excisable once the leaf is
cut (cut-rag) and is then classified either as cigarette tobacco or pipe tobacco.

2 POLICY
a) Tobacco products and substitutes thereof are liable to payment of excise duty in SA as described in
Schedule No. 1 Part 2A of the Act.

b) Tobacco products include:

a. Cigarette tobacco;
b. Pipe tobacco;
c. Cigarettes;
d. Cigars; and
e. Any product used as a substitute for any of the above products.

c) Products manufactured in the Southern African Customs Union (SACU) for the purpose of being used
as a substitute for cigarette tobacco, pipe tobacco, cigarettes or cigars will be classified under the
tariff item of that specific tobacco product it is substituting.

d) The liability for excise duty in the tobacco industry is assessed and collected on a duty at source
(DAS) basis.

e) In terms of the SACU agreement the governments of South Africa, Botswana, Lesotho, Namibia and
Swaziland (BLNS) agreed, amongst other things, to broadly apply the same excise duty principles in
order to reduce trading and compliance costs for businesses within the SACU common customs area.

f) The DAS system of assessing excise duty and accounting for excisable products, and its principles, is
an example of such a commonly applied system / principle. Many of the procedures described in this
document will therefore similarly apply to tobacco products produced in South Africa and any of the
BLNS countries.

3 REFERENCES

EXTERNAL POLICY – TOBACCO INDUSTRY Revision: 2 Page 2 of 3

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3.1 Legislation
TYPE OF REFERENCE REFERENCE
Legislation and Rules Customs and Excise Act No. 91 of 1964: Sections 18, 18A, 19, 19A, 20(4),
administered by SARS: 27, 35A, 54, 59A, 64D, and 120
Customs and Excise Rules: 18.01 to 18.14, 18A.01 to 18A.08, 19.01 to
19.07, 19A, 19A.1, 19A.08, 20.14, 20.17, 27.01 to 27.13, 35A, 54,01, 54.02,
59A.01(a) and 64D.01(1) to 64D.19
Other Legislation: None
International Instruments: None

3.2 Cross References

DOCUMENT # DOCUMENT TITLE APPLICABILITY
SC-CF-08 Manual for Completion and Presentation of Bills of Entry All
SC-SE-05 Securities All
SE-EXC-05 Spirits Industry – External Policy All
SE-EXC-05-S1 Spirits Industry – External SOP All
SE-EXC-07 External Policy – Acquittal of in Bond / Inter-Warehouse and All
Export Declarations for locally manufactured Excisable and
Levy goods
SE-EXC-07-S1 External SOP – Acquittal of in Bond / Inter-Warehouse and All
Export Declarations for locally manufactured Excisable and
Levy goods
SE-EXC-24-S1 Tobacco Industry – External Standard Operating Procedure All

4 DEFINITIONS AND ACRONYMS

Act The Customs and Excise Act, Act No. 91 of 1964, as amended
BLNS Means:
• The Republic of Botswana;
• The Kingdom of Lesotho;
• The Republic of Namibia; and
• The Kingdom of Swaziland
DAS Duty at Source – Assessment of duty at the time when products are removed
from the manufacturing warehouse
SACU The Southern African Customs Union, consisting of:
• The Republic of South Africa;
• The Republic of Botswana
• The Kingdom of Lesotho;
• The Republic of Namibia; and
• The Kingdom of Swaziland
Schedule No. 1 Part 2A Specific Excise Duties and Specific Customs Duties on imported goods of the
same class or kind

5 DOCUMENT MANAGEMENT
Designation Name / Division
Business Owner: Executive: TPS Product Delivery
Policy Owner: Executive: TPS Product Delivery
Author: C. Botha
Detail of change from previous Complete Review (Note the new reference number)
revision:
Template number and revision SC-POL-TM-02 - Rev 10

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