Supreme Court Rules on SARS Discretion in Excise Tax Rebate Case

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Supreme Court of Appeal Case: JT International Manufacturing South Africa (Pty) Ltd v CSARS (1330/2023)

In a major ruling that could impact how SARS enforces customs and excise rules, the Supreme Court of Appeal (SCA) ruled against SARS on 4 April 2025 in favour of JT International Manufacturing SA (Pty) Ltd.

🔍 Late Submission and SARS Refusal of Granting the Rebate

JT International had imported 12 consignments of cigarette tobacco using rebate code 460.24, which normally allows excise duty relief—provided certain conditions are met. One of those conditions (rule 19A.09(c)) is that specific SAD 500 ZRW forms must be submitted within 30 days of delivery to the warehouse. JT failed to submit these forms on time due to internal error.

SARS refused to grant the excise rebate and demanded over R60 million in excise duty and VAT, saying it could not exempt non-compliance under section 75(10)(a) of the Customs and Excise Act.

⚖️ What did the court say?

The SCA ruled that SARS does, in fact, have discretion under s 75(10)(a) to exempt a taxpayer from strict compliance with rebate conditions—even if the requirement was not met at the time of entry. The court confirmed:

• The Commissioner's discretion isn’t limited only to changes in use of goods after import.

• SARS may consider exempting non-compliance before or after an import event.

• The Commissioner is not obligated to grant the exemption, but must recognise that the legal power exists.

💡What are The Consequences For Importers

This judgment clarifies that SARS can use discretion when procedural mistakes are made in applying for rebates—potentially saving clients large penalties or disallowed claims. However, SARS isn’t compelled to grant relief, so early compliance and documentation remain critical.

Practitioners working with importers or manufacturers should take note of:

• The importance of timely submission of all customs forms.

• The potential to request exemption under s 75(10)(a) when procedural issues arise.

• The expanded interpretation of SARS’s discretionary powers in rebate matters.

📌 Tip: Always document internal errors thoroughly and submit formal exemption requests with clear supporting reasons.

Read the SARS Media Release for more detail.