How to Manage a Customs and Excise Bond Store, a Rebate Store, and a Special Manufacturing Warehouse

In a previous article, we discussed Customs and Excise Storage Warehouses, Rebate Stores and Manufacturing Warehouses. We discussed what a State Warehouse is, what a Storage Warehouse is, and the different types of Storage Warehouses.

First, let us understand some terminology:

• A Bond Store or a Storage Warehouse – this is where you may store imported goods to defer the payment of Customs duties and taxes for up to two years.
• A Rebate Store or Rebate Manufacturing Store – this is where you may store goods pending manufacturing under rebate of Customs duties, and in some cases the exemption of VAT.
• A Special Manufacturing Warehouse – this relates to the manufacture of Excise items such as wine, spirits, and other luxury items. Excise duties are paid monthly or quarterly upon completion of manufacture.

How to manage these stores and the minimum Customs and Excise requirements for each may vary, depending on the type of store, but there are several aspects which are universal to all which we will unpack here.

Record Keeping – Store Register 

Whether you have a Bond Store, a Rebate Store, or a Manufacturing Warehouse, you will require a store register. The register may be termed a Bond Store Register, a Rebate Store Register, or a Manufacturing Warehouse Register. The register may be in Excel format or hard-coded into a computer system that forms part of the overall logistics or any other system.

 Whichever it is, it is required to be secure. It may be printed daily or weekly and stored in a fireproof safe, or fully backed up to an independent off-site server. Data must be retained indefinitely for the full lifecycle of the store, from inception.

Here are some of the minimum Customs data fields for the register:

1.  Agents File Reference.
2.  Customs MRN Number / Bill of Entry Number and Date.
3.  Vessel / Aircraft Name.
4.  Date Received into Store.
5.  Bill of Entry Line Number.
6.  Tariff Heading.
7.  Customs Value.
8.  Invoice Number.
9.  Description of Goods.
10.  Quantity into Store.
11.  Unit of Measure.
12.  Issue Slip Number or Dispatch Note out of Store.
13.  Date of Stock Issued Out of Store.
14.  Quantity Issued Out of Store.
15.  Unit of Measure Issued Out of Store.
16.  Balance of Stock Remaining in Store.

There may be additional information required depending on the type of store, particularly if one is required to re-export after manufacturing.

Record Keeping – Documentation

Documentation must be kept for five years, plus the year in which it was created, i.e. up to six years. The Customs Act requires all documentation to be kept in a Fireproof Safe, although in stores with large volumes, this requirement may be somewhat impractical. One can obtain permission from SARS to store documents in a hard-coded computer system to alleviate the physical paper requirements.

 Here is a general list of documents which may be kept: 

1.  Customs Release Notification.
2.  Customs SAD 500 Document.
3.  Commercial Invoice.
4.  Packing List.
5.  Customs Worksheet.
6.  Transport Document.
7.  Agents Clearing Instructions.
8.  Rebate Declaration as per Customs Rule.
9.  Issue Slip or Dispatch Note.

Physical Requirements

The physical store requirements are largely about good corporate governance, i.e. clean and tidy, no “stuff” lying around, stock clearly marked, stock packed well in proper bays, provision for quarantine areas (i.e. broken or damaged stock), health and safety, fire hydrants and fire extinguishers, security (i.e. armed response, CCTV) and so forth.

Here are a few additional aspects to take note of:

1.  Only one entry and exit point is allowed.
2.  Store always under lock and key.
3.  At least one CCTV camera pointing at the entrance.
4.  Rebate Store – fence height at least 1.8 meters.
5.  Bond Store – fence height to the roof/ceiling.
6.  Fireproof safe inside store.
7.  Hard Copy Rebate Register and Documents (if not hard-coded in the computer system) inside Fireproof Safe.
8.  Customs Rules and Regulations pasted onto Store Fence / Wall.
9.  Customs Store Number and Name pasted onto Store Fence / Wall.
10.  SARS License / ITAC Permit pasted onto Store Fence / Wall.
11.  Building Diagram depicting Store Layout pasted onto Store Fence / Wall.
12.  Stock Ticketing – each box/pallet is to be ladled with Customs Information.
13.  Stock in Store not older than the minimum storage period (standard is two years but for some, it may be less)
14.  Insurance in place.
15.  Customs Guarantee always sufficient.

Store Procedures

One is required to Customs Clear goods into and out of a Bond Store. 

For Rebate Stores, goods are required to be Customs Cleared into the store. From there the goods are dispatched into production. One’s liability ends when goods are fully manufactured. In cases where goods are manufactured, one keeps a record of the dispatch of goods when going from storage into manufacturing. 

Manufacturing warehouses also require a Store Register. Monthly and quarterly accounts are submitted to SARS whether there is a duty or excise and any other tax liability, or whether the liability is zero.

Goods may be received into a Bond Store directly from importation, or another Bond Store.

Goods may be received into a Rebate Store directly from importation, another Bond Store, or even another Rebate Store.

Goods may also be re-exported from any store although in some cases (i.e. some rebates), Customs permission is required to re-export.

About the author

Graeme Lennie

Graeme has 27 years of industry experience having also worked for SARS Customs. He has an MBA (Master of Business Administration) degree. Graeme is a SAIT / SARS Registered Customs Tax Practitioner and holds the title Master Customs Practitioner (SA). Graeme runs his own Customs Consulting Agency named The Customs Hub (Pty) Ltd. Graeme consults in all Customs areas notably, Customs Tariff, Valuations, Origin, Bond and Rebate Stores and Appeals to SARS.