Question Tag: Customs Act

a) In recent times the export business community has increasingly expressed concern about the issue of duty drawback management by the Ghana Revenue Authority (GRA), particularly undue delays and non-payment of duty drawback claims as accrued over the years.

As an expert tax consultant, you have been invited by the Ghana National Chamber of Commerce for a technical meeting with representatives of the business community on the duty drawback regime.

You are required to prepare a brief paper for discussion at the meeting covering the following areas:

i) An explanation of the term “drawback” as prescribed under the provisions of the Customs Act, 2015 (Act 891), including the two different categories of duty drawback that may be paid by the Commissioner-General.

ii. Under what circumstances will goods be deemed to have been exported for drawback purposes as prescribed under Act 891?

b) Corncob Industries Ltd. a company based in the Central Region of Ghana which processes agricultural products is contemplating diversifying its product lines to take advantage of an identified market potential for a particular maize-based cereal. This will require:

• Retrofitting one of their production machines which will enhance its value and performance by about 75%.
• Repairs to the equipment used for packaging the products. This will enhance its value by approximately 10%.
• Servicing of a component of the sterilization unit which is still under the manufacturer’s warranty.
  Management of the company has concluded discussions with the manufacturer of the machinery, equipment and sterilization unit based in France to undertake the retrofitting, repairs and servicing, if Corncob Industries Ltd. can have the items shipped to their factory in Milan, Italy for the purpose.
  Alternatively, the manufacturer’s technicians may be brought over to Ghana with the necessary materials to undertake the retrofitting and repairs at the factory premises of Corncob Industries Ltd. Management of Corncob Ind. Ltd. is not certain of the Customs implications of shipping the items out to Italy for the works, which will take four weeks and subsequently re-importing the processed items into the country.

Required:
With reference to the Customs Act, 2015 (Act 891), explain to Management of Corncob Industries Ltd. details of the customs procedure for re-importation of goods after outward processing and the related liability to customs duty, with respect to the following issues:
i. condition under which the outward processing procedure may be used.
ii. period for discharge of the outward processing procedure.
iii. import duty liability on the goods when re-imported into Ghana after processing abroad.