Commissioner SARS v Levi Strauss SA (Pty) Ltd (509/2019) [2021] ZASCA 32; [2021] 2 All SA 645 (SCA); 2021 (4) SA 76 (SCA); 83 SATC 348 (7 April 2021)

Commissioner SARS v Levi Strauss SA (Pty) Ltd (509/2019) [2021] ZASCA 32; [2021] 2 All SA 645 (SCA); 2021 (4) SA 76 (SCA); 83 SATC 348 (7 April 2021)

The Supreme Court of Appeal held that the goods imported by Levi SA from SADC countries under the Levi GTC regime were consigned directly from a Member State to South Africa and thus qualified for preferential duty rates under the SADC Protocol. The court found that the commercial relationship underlying the consignment was irrelevant to the physical movement of goods for customs purposes. SARS' determination that the certificates of origin were invalid was incorrect and was set aside. Regarding the buying commission, the court held that Levi APD was not acting as a buying agent under the direction and control of Levi SA, but rather as part of a centrally controlled global sourcing...

Citation
[2021] ZASCA 32
Parties
Appellant: Commissioner for the South African Revenue Service; Respondent: Levi Strauss South Africa (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
7 April 2021
Case Number
509/2019
Procedural Posture
Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria
Outcome
Appeal upheld in respect of the origin issue; appeal dismissed in respect of the buying commission and royalty issues.
Judges
Wallis, Mbha, Schippers, Eksteen, Rogers
Legal Topics
Customs and Excise Act, Transaction Value Determination, Buying Commission, Royalties in Customs Valuation, Sadc Protocol on Trade, Certificates of Origin
Tax Law Commercial and Corporate Customs and Excise Act Transaction Value Determination Buying Commission Royalties in Customs Valuation Sadc Protocol on Trade Certificates of Origin

Case Brief

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Parties

Commissioner for the South African Revenue Service

Appellant

Levi Strauss South Africa (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria

Legal Issues

  1. 1 Whether goods imported by Levi SA from SADC countries under the Levi GTC regime qualify for preferential duty rates under the SADC Protocol.
  2. 2 Whether commissions paid to Levi APD constitute buying commissions excluded from transaction value under s 67(1)(a)(i) of the Customs and Excise Act.
  3. 3 Whether royalties paid by Levi SA to LS & Co must be included in the transaction value of imported goods under s 67(1)(c) of the Customs and Excise Act.

Ratio Decidendi

The Supreme Court of Appeal held that the goods imported by Levi SA from SADC countries under the Levi GTC regime were consigned directly from a Member State to South Africa and thus qualified for preferential duty rates under the SADC Protocol. The court found that the commercial relationship underlying the consignment was irrelevant to the physical movement of goods for customs purposes. SARS' determination that the certificates of origin were invalid was incorrect and was set aside. Regarding the buying commission, the court held that Levi APD was not acting as a buying agent under the direction and control of Levi SA, but rather as part of a centrally controlled global sourcing...

Court Disposition

Appeal upheld in respect of the origin issue; appeal dismissed in respect of the buying commission and royalty issues.

Orders

  • The appeal is upheld with costs, including costs of two counsel.
  • The order of the high court is set aside and replaced as follows: (a) The appeal in terms of s 49(6) of the Customs and Excise Act 91 of 1964 succeeds in relation to the Commissioner's determination dated 25 March 2014 that the Certificates of Origin accompanying the bills of entry for goods imported by Levi SA and...