Aug 26, 2011
Ready for Harmonised System 2012?Back
© Reuse this
Every five years, the ‘Harmonised System’, or HS, is updated to accommodate changes in the business environment. The HS is the coding system used to classify goods when you import or export and is the determiner of the level of duty you pay on the goods you import. Thus, any change to the HS may change the tariff classification of the goods imported and may, therefore, change the duty paid.
The HS code assigned to products also serves as the link to rebates accessed by importers on particular products as well as trade remedies imposed on the importation of certain products like anti- dumping or countervailing duties. Changes made to the HS may have unintended con- sequences if the HS code assigned to a particular product is affected. When such changes result in protection provided by a trade remedy being lost, the consequences for a business may be devastating.
The challenge facing importers and exporters is to assess the impact of the changes being made in HS 2012 to determine the extent to which they are impacted on. Certain industries, such as food and chemicals, will be much more significantly impacted on than others in HS 2012. The impact may not only change the tariff heading you clear your goods under, it may also change the duty you pay on those goods. The South African Revenue Service holds importers and exporters accountable for compliance with HS 2012, yet most companies have no idea how their HS classification currently being used will be impacted on and what they need to do to deal with the change.
The impact of a change to the tariff code is potentially far reaching in all sorts of unex- pected ways, such as:
When the last structural change like this was implemented in 2007, a number of companies were unaware of the imminent change and simply reacted to it only after the change had already been implemented. In some cases, this can be quite a serious problem, especially for companies with fixed price contracts, where changes may result in cost escalations as a result of duty changes which are not built into the pricing of the contract.
With just more than four months left to the implementation of HS 2012, importers and exporters need to gain an understanding of the extent to which their businesses will be impacted on by the proposed changes to the HS. This will allow importers and exporters to act on unintended consequences, like lost import rebates or trade remedy protection, and, in so doing, limiting the impact on their profitability and day-to-day operations.
Xikhovha Advi- sory (with our partners, 3CE Online) is offering a free service to all companies wishing to assess the impact of HS 2012 on their businesses. Visit www.hs2012.co.za for a free assessment of the impact of the proposed changes to your business.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Other Pieter du Plessis & Donald Mackay News
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
While economic forecasts for the African continent are most favourable, African airlines may not be able to benefit from the expected growth in the region’s gross domestic product (GDP), International Air Transport Association VP: Africa Raphael Kuuchi has warned....
The Automotive Production and Development Programme (APDP) will need to change substantially post 2020, says Metair Investments South African operations COO Ken Lello. “We must not make tweaks. We have to change. What we are doing is not sustainable.”
Banking group Absa’s forecast is for the rand to end the year at around R13 against the dollar, weakening further to R13.50 by 2016, says Absa sectoral analyst Jacques du Toit. He warns that possible interest rate hikes in the US may see capital being pulled from...
The Dispute Resolution Centre at the Bargaining Council for the Civil Engineering Industry (BCCEI) is now open to handle party-to-party disputes. The BCCEI represents the interests of all level four to nine Construction Industry Development Board companies.
Communications technology firm Ericsson sub-Saharan Africa head Fredrik Jejdling says the company’s commitment to sustainability and corporate responsibility has been integrated into all facets of its operations, which has provided it with sustainable revenue...
Next ArticleSkills, competitiveness and labour policy challenges at the heart of SA’s deindustrialisation