“The draft rules provide requirements in respect of tobacco leaf threshers, who are required to register their factories with the Commissioner and keep records for the purposes of inspection by the Commissioner,” explains Virusha Subban, partner, head of Indirect Tax at Baker McKenzie in Johannesburg.
Subban says that a “tobacco leaf thresher” is any person who carries out any preliminary, intermediate or supplementary processing of tobacco not stemmed or stripped, tobacco partly or wholly stemmed or stripped, or tobacco refuse.
She notes, “A separate application must be submitted in respect of each factory. Properly representative photographs that indicate the size, layout and other general identifying features of the leaf threshing factory should accompany each application.”
Every tobacco leaf thresher will be required to keep records of each supplier of tobacco inputs, together with the dates and values of each such supply; the processes carried out in respect of such tobacco inputs; the persons on whose behalf such processes were carried out; and each purchaser of tobacco outputs, together with the dates and values of each such purchase.
“These records and the documents in support thereof must be kept available for inspection by the Commissioner for a period of five years, calculated from the end of the calendar year in which any such record was created,” Subban explains.
She notes further that if a company has failed to comply with the Customs and Excise Act, 1964 or any law relating to the illicit manufacture, conveyance, supply or possession of excisable tobacco products during the past two years, it is required to state the nature of the offence and penalty imposed, as this will be taken into consideration in the application for registration.
“Comments on the draft rules are due by 28 June 2019. The tobacco industry is encouraged to comment on their practicality,” she adds.
