Itac strict on importation of used goods, Estina tax fraud trial hears

A manager at the International Trade Administration Commission of South Africa (Itac) told the Estina tax fraud case in the Pretoria magistrate’s court that the commission usually declines import applications for used goods if a local manufacturer for the same goods is available. 

Sanjay Devnath, Itac's import control manager, testified in the fraud trial of Kamal Vasram and Saliesh Indurjeeth on Tuesday.

The state alleges the two men unlawfully revealed to clearing agent UTI South Africa between 2013 and 2014 that they were importing new dairy equipment to the value of $3,448,800 (about R64m) from a supplier in the United Arab Emirates. However, the dairy equipment was not new and cost a fraction of the R64m. 

Another charge against the men is the contravention of the International Trade Administration Act by allegedly unlawfully importing second-hand or used goods without applying for and obtaining a valid import permit from Itac. 

Reading from a document supplied by Estina for the importation of the pasteurisation plant, Devnath said the indication from the importer Estina was that this was a new plant.

 When asked by the state of the consequences if the importer imported second-hand goods without a valid permit, Devnath said this would be in contravention of the Act which regulates imports of certain goods to South Africa. 

When asked what opportunities were available for an importer to rectify the mistake after realising that not all imported goods were new, Devnath said Itac experienced this on a regular basis.

“Applicants come into our office to request an Itac permit. If some items are not manufactured locally, we will consider these applications, and if the item is locally manufactured, we inform the importer to have the goods re-exported. This is done in conjunction with Sars customs,” Devnath said. 

When asked if he had come across manufacturers of a pasteurisation plant in South Africa, Devnath said he had done some research and discovered there was one. 

Advocate for Vasram, Jaap Cilliers SC, told Devnath that he was only appointed to his position at Itac in 2015, a year after the Estina transaction. 

“The objective facts appear to me at the time the transaction occurred, you were not employed at [your] present position. Your expression of views is purely on the basis of a theoretic situation because you do not have personal knowledge of the transaction,” Cilliers said.

Devnath agreed.

Cilliers said all Devnath was telling the court was that he checked the records and there was no record by Estina that it was importing second-hand goods. 

“I cannot understand why you are here. That there was no application was admitted from the start,” Cilliers said.

Devnath agreed. 

The case continues.

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