Towards the end of 1999, a chemical "marker" will be introduced by the oil companies into paraffin (also known by various other names, including kerosene and illuminating paraffin) and also to certain solvents with characteristics similar to paraffin.
The objective is to clamp down on the practice of using substitute fuels in Diesel engines and to eliminate the evasion of duties payable on such substitute products.
It is the intention of SARS to submit draft legislation in this regard to Parliament during the current Parliamentary session. The administration of the proposed law will be handled by the Customs and Excise division of SARS, and offenders face very substantial penalties.
Copies of the draft legislation and rules are available form the Government Printers (Gazette no 20279) and are also available on SARS Online at www.sars.gov.za.
The essentials of the proposed new law include a total prohibition upon the use of mixtures containing the marker as substitute fuels in engines, and allow for limited and regulated use of mixtures containing markers in other domestic and industrial applications. In the latter cases registration may be required.
Comprehensive record keeping requirements are being introduced regarding invoicing, the keeping of books, accounts and documents and of storage and stock records.
Procedures are in place to enable customs officers to take and test fuel samples and to pass those samples to an authorised laboratory for further analysis.
Rules regulating the supply of Jet fuel are being formulated at present.
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE
WHAT IS FUEL SUBSTITUTION?
Fuel substitution is the mixing of paraffin or similar solvents with Diesel fuel or lubricity agents such as oils and using the substitute mixture as a fuel in engines. Various duties are payable on fuel used in engines, whereas paraffin is duty free and only attracts VAT. The mixing of paraffin with other substances, including Diesel fuel, for use as a fuel in engines will result in the evading of a part or all of the full duty due.
ARE SUBSTITUTES HARMFUL?
Yes. Experience has proved that the use of substitute fuel can lead to loss of performance, reduced life, and poor reliability in engines.
HOW WILL SUBSTITUTION BE COMBATED?
The addition of Mortrace MP (the marker) to paraffin and similar solvents will provide a means to identifying the presence of these products in fuels used in engines and Customs Officers will take fuel samples form vehicles and other sources for on the spot analysis. Fuels for use in engines, as sold at service stations, should never contain this marker.
WILL THE MARKER HAVE ANY OTHER EFFECTS?
In the case of illegal substitution the marker will not affect the operation of any internal combustion engine.
HOW CAN THE CHEMICAL MARKER BE RECOGNISED?
The marker is invisible. By the addition of a specific reagent the presence of the marker can be detected. Test kits similar to those to be used by Customs officers can be purchased by anyone interested in doing so.
WHAT ARE THE MAIN OFFENCES UNDER THE PROPOSED LEGISLATION?
WHAT ARE THE RECORD KEEPING REQUIREMENTS?
WHAT ARE THE POWERS OF CUSTOMS OFFICERS?
Any comments or reaction to this document or the draft legislation should be received by SARS no later than 26 July 1999.
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