Sars' attempt to shield SA from cheap Chinese imports dealt a blow
In a judgment delivered last week at the North Gauteng High Court, Judge Neil Tuchten ordered the South African Revenue Service (Sars) to release 11 containers belonging to Bedfordview-based Dragon Freight.
Sars had withheld the consignment after it arrived at the Durban harbour from China in September.
Dragon Freight said in papers deposed at the court that Sars refused to release the containers even though they were cleared.
The company said Sars had maintained that it was withholding the clothes because they were too cheap compared to similar types of clothing found locally.
Dragon Freight feared that Sars would also confiscate 22 more containers that were still headed for the country.
The group imports for shops operating in Chinese shopping centres around Johannesburg.
Judge Tuchten ruled in favour of Dragon Freight largely on grounds that Sars did not dispute the urgency of the importer's court application.
The company maintained in court that its application was urgent because its clients aimed to cash in on Black Friday and festive season sales.
It was also not disputed that Dragon Freight lost R1million a month as Sars withheld the cleared consignment.
“It is common cause that Sars has in the interim cleared the 11 containers, but refuses to release (them).
"These containers consequently remain unreleased at the pleasure and behest of Sars,” Christiaan Vosloo, Dragon Freight’s clearing agent, said in court papers.
Sars maintained before Judge Tuchten that the clothes were incorrectly invoiced, and expressed worry they would be sold too cheaply.
Speaking to The Star ahead of Judge Tuchten's ruling, Dragon Freight's attorney Richard Meaden said it appeared Sars held the consignment as part of its drive targeting low-cost imported clothes.
It would not come as a surprise if the state adopted stringent “anti-dumping” laws following this case, Meaden said.
He said while the state was at liberty to explore this, “Sars can't withhold consignments once they are cleared”.
Judge Tuchten's ruling effectively saved Dragon Freight’s consignment from being obliterated by Sars.
On Friday, in another strong sign that the state was going after imported goods that it deemed illegal, the revenue collector began destroying vehicles and clothing valued at more than R7m in Durban.
Sars formed part of a recently established high-level inter-governmental task team targeting illicit trade.
The task team involving the Department of Trade and Industry, and International Trade and Administration Commission focused on clothing, textiles, leather and footwear, scrap metals and gold.
Patrick Moeng, Sars customs executive, said some goods were declared under tariff headings that do not attract high duties, hence they were deemed to be illegal.
The “devastating impact” of illegal imports on the local economy includes loss of VAT, a decline in the country's ability to manufacture goods locally and job losses.