November 24, 2017

Aggregate and Sand Producers Association of Southern Africa

Quarry miners are taking the fight to the next level in a bid to resolve the impasse with Government over the withdrawal of diesel rebates to certain mines.


Affected companies, supported by the Aggregate and Sand Producers Association of Southern Africa (Aspasa), are planning to launch a legal challenge against the new interpretation of the Customs and Excise Act, 1964 (“the Customs Act”) that is being cited to exclude certain operations from receiving the rebates. A unanimous decision was therefore taken to appeal the South African Revenue Service’s (SARS) interpretation and wording of item 670.04 read with Note 6 and Section 75 of the Customs Act. The decision was taken by Aspasa during a recent financial workshop organised to address a number of issues affecting the financial viability of the industry in future.

In terms of the intended court action, Aspasa and a number of its members will attack the SARS interpretation to haphazardly exclude certain quarries from partaking in the diesel rebate scheme. The challenge will centre on the amended notes to item 670.04 of the Customs Act’s definition of the excluded activities in particular the commodity mined within these quarries as a “material” and not a “mineral” as defined by the Department of Mineral Resources (DMR) which regulates all other activities of the Aspasa members.

Aspasa director, Nico Pienaar, said it is accepted that the removal of low value materials such as topsoil is not subject to mining legislation and those commodities are deemed as “materials”. However, stone and mined sands are regarded as “minerals” and all Aspasa quarries are therefore governed by mining legislation. When it comes to diesel rebates however this simple change in terminology is causing some of Aspasa members to have diesel rebates unfairly disallowed by SARS..    

He added that sand and aggregate quarries benefitted from the scheme since 2001 when the Diesel Refund Scheme was put in place to reimburse companies who operate off-road vehicles. The reimbursement is meant for the portion of the usual levies destined to various road agencies and the Road Accident Fund among others.

Until recently all miners, farmers, forestry companies and other operators of off-road vehicles were exempted from road taxes. Certain amendments were recently made to Section 75 of the Customs and Excise Act however and these effectively excluded mining of “materials” destined for the construction industry from receiving the rebates.

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