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How will SARS review your surety?

by , 18 January 2013
Last week, SARS released the latest revision of its external policy on bonds. The policy document explains when SARS will ask you for surety as an excise client. It also explains when you'll be exempted from lodging surety and what to do if you disagree with SARS decision.

SARS can ask you for surety to be lodged in the form, nature and amount they determine, to protect the State from any possible loss of revenue based on your actions.
You'll have to lodge surety upfront for a warehouse license or registration if:

  • You apply for licensing of a tobacco manufacturing or tobacco special storage warehouse and intend to manufacture or store cigarettes.
  • You register as a schedule 6 rebate user and intend to receive and store spirits.
In all other instances, the need for surety will be based purely on assessed risk. This assessment will take place on an annual basis starting 12 months after licensing/registration. Surety may also be called for at any time to cover a detected risk posed.
Surety must be in the form of a surety bond

Provisional payments won't be accepted as surety in lieu of a surety bond.
You'll be exempted from lodging surety if your assessed risk warrants a surety amount of less than R20 000.
Here's what you can do if you disagree with SARS' decision

If you're not happy with SARS' decision, you can take it to the relevant appeal committee. If you're then still unhappy with the appeal committee's decision, you can lodge an application for ADR (Alternative Dispute Resolution) with the relevant appeal committee. The committee will add its comments and forward the application to the ADR Unit.
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