How is the value of these goods determined?
Officers from the valuation branch are invited to assess individual values for each of the items on the list. The full customs value (Cost, Insurance, Freight (CIF) price) is usually taken as the value but if the goods have deteriorated, the value may adjust accordingly. Duty liable for the said item is also taken into consideration.
What is the reserve price?
The reserve price (duty+taxes) is to be fixed at a reasonable level taking into account the value and duty on the goods and the circumstances of sale and should reflect the lowest price of which the Valuation Officer considers the goods should be sold. For example, for goods of a C.I.F. invoice value of Shs.120/-, and liable to duty 25%, the total value and duty is Shs.155 - but taking into account the type of goods and circumstances of sale, the Valuation officer may consider that they will fetch only shs.100/- and that amount will therefore be the reserve price.
Apart from failure by importers to pay duty on their imported goods, what other factors does KRA look at before putting goods up for auction?
- abandoned goods not removed after 30 days of being deposited in the customs warehouse and the gazette notice period
- perishable goods or animals deposited in the warehouse
- Goods imported by
- Partner States Government
- Diplomatic Missions
- Aid agencies
How does KRA utilise/treat auction proceeds
Section 53 (3) of the EACCMA, 2004 provides the order in which the proceeds of sale from the auction will be applied. The order is as follows:
- the duties
- the expenses of the sale
- any rent and charges due to the Customs or to the warehouse keeper
- port charges
- freight and any other charges.
Where, after proceeds of the sale have been applied as above, there is any balance, then such balance shall, if the owner of the goods makes application within one year from the date of the sale, be paid to such owner, or, in any other case, be paid into the Customs revenue.
What is Advance Ruling?
Advance Ruling is a written decision concerning the customs treatment of goods given by the Kenya Revenue Authority’s Customs and Border Control department to an applicant prior to importation of goods.
What type of ruling can I apply for?
An applicant can apply for a ruling in respect of:-
Determination of the origin of the goods
Determination of the appropriate valuation methodology or criteria and the application thereof, to be used for determining the customs value under a particular set of facts.
Where to apply?
An application should be made in writing to the Commissioner of Customs & Border Control department.
Who can apply?
An importer, exporter, producer, manufacturer or any person with a justifiable cause or their representative may make an application.
How does it benefit me?
Results in reduced processing time at port of entry and allows for better financial planning in assessing tax liability.
Is an Advance Ruling binding?
It is binding on the Customs & Border Control Department and the applicant for use in respect to the goods and conditions under which it is issued.
What do I need to apply?
Valid Business License (if necessary)
Details (name, address, PIN, email address, phone number etc.) of applicant
Detailed product information such as brand, name, function, use, composition, country of origin, catalogue, demo video, samples, model and model specifications, name of the manufacturer, certificate of analysis/conformity, material safety data sheet, date of expiry, type of packaging, permission to import restricted items if applicable, sales contract, duly filled form C52 (if applicable)
The name(s), addresses, email addresses and other identifying information of all interested parties (if known) and the manufacturer ID code (if known)
The name(s) of the port(s) in which the merchandise will be entered (if known)
Timeline for importation/exportation
Suggested classification/country of origin/Valuation methodology
Any relevant ruling already issued/available
Whether the applicant is aware of the existence of an advance ruling for identical or similar goods or materials
Disclosure of already pending matters in the applicant's case relating to the goods in question before any governmental agency, appellate tribunal or court
What aspects of the information provided should be subject to confidentiality
When should I apply?
Application should be made prior to the importation of goods
What is the cost?
It is Free.
How long does the process take?
The Customs Department will issue an Advance Ruling within (30) days upon receipt of all the requisite information.
How long is the ruling valid and when does it take effect?
An Advance Ruling is valid for 12 months.
It takes effect on the date of issuance as specified in the ruling.
Can my application be denied?
An application may be denied in the following instances:
Where there is insufficient information to make a ruling
Where there is no relation or intended use of a Customs procedure
Where a request has already been made on behalf of the applicant using the same circumstances
Where the matter is being arbitrated or before the courts.
Can an Advance Ruling be revoked or annulled?
Yes. The Customs Authority may revoke or annul a ruling:
If amendments are made to the act
If any conditions related to the ruling have not been satisfied
If you fail to fulfill an obligation imposed under the ruling
If a ruling was given using incomplete, incorrect, false or misleading information
What to expect when a revocation or modification is made?
A written notice will be issued to the applicant
The amended Advance Ruling shall take effect on the date the notice is issued.
What to expect when an annulment is made?
A written notice will be issued to the applicant
The annulment shall take effect from the date of issuance of the initial advance ruling.
Can an advance ruling be appealed?
Yes. If the applicant is dissatisfied with the Advance Ruling given by the Customs & Border Control Department, within thirty (30) days after the date of the ruling an appeal can be made to the Commissioner of Customs.
If the applicant is dissatisfied with the ruling made by Commissioner of Customs, within forty five (45) days of being served with the decision by the Commissioner, an appeal can be made to the Tax Appeal Tribunal.
All Advance Rulings will be published via the internet on the KRA website. Any information intended to be of a confidential nature will be omitted from publication.