What Happens When SARS Uses “Similar Goods” to Value Your Imports?

When you bring new or unique products into South Africa, there’s a chance SARS (South African Revenue Service) won’t accept your declared value. If Transaction Value (Method 1) is ruled out, and Identical Goods (Method 2) can’t be used, SARS turns to Method 3: valuation based on similar goods.

This method can be tricky, especially for importers of specialized, high-compliance, or branded products. Let’s break it down so you can prepare, respond, and stay compliant.

Why SARS Uses the “Similar Goods” Method?

Method 3 is covered under Section 66 of the Customs & Excise Act. It kicks in when:

• There is no sale to base a transactional value on.

• Your goods don’t match any identical products in past import data.

• There is not enough documentation to prove your value.

Instead of rejecting your shipment, SARS uses the customs value of a product “similar in character and use” that was previously imported into South Africa.

This is especially common for:

• New products or first-time imports

• Private-label or unbranded goods

• Imports under a consignment or transfer arrangement

• Different payment models (royalties, barter, etc.)

What Counts as “Similar Goods” in SARS’ Eyes?

According to SARS guidelines, similar goods must share the following:

• Country of origin: Same as your supplier’s country

• Material composition: Made from the same or similar materials

• Function and use: Comparable in performance and end-use

• Quality and reputation: Equivalent grade and market positioning
• Level of trade: Sold at the same commercial level (wholesale, retail)

📦 Example Scenario

• You import a new line of LED floodlights from China.
• There’s no past import record for your brand.
• SARS finds similar LED lights, same wattage, material, and market use, imported two months earlier at USD 5 per unit.
• This becomes your customs value.

Key Risks When SARS Applies to Similar Goods

While the idea of using similar goods seems fair, the margin for error is wide. If SARS uses a value that doesn’t truly reflect your product’s cost, you could face:

• Overvaluation of goods

• Higher duties and VAT

• Penalties for under-declaration (if challenged later)

• Reputational risks with SARS audits

• Delays in customs clearance

Many importers also find themselves in disputes over how “similar” a product truly is. Technical specifications, supplier agreements, and contract terms may vary, but if not documented well, SARS may still use the closest match.

How to Protect Your Business from Overvaluation?

Here are smart steps to strengthen your valuation defense:

✅ Document Product Specs Clearly

Include detailed technical sheets, certifications, and product photos.

✅ Show Why the Product Is Unique

Demonstrate design differences, brand positioning, or special features.

✅ Maintain Clean Records of Past Imports

If your product line has a history, highlight consistently declared values.

✅ Use Professional Customs Brokers

Ensure your broker understands Method 3 and can negotiate or query SARS decisions.

✅ Apply for Valuation Rulings Where Needed

In complex cases, you can preemptively apply for a ruling under Section 74B.

High-Risk Sectors: You Need to Be Extra Cautious

Some industries are more vulnerable to Method 3 misapplications:

Electronics & Consumer Goods: Where product specs change fast.

Defense or Hazardous Goods: In defense or hazardous goods, safety ratings and compliance vary.

Medical Equipment: With variations in clinical approval and materials.

Luxury Goods: Where brand value plays a major pricing role.

If you’re importing into any of these sectors, having a strong paper trail and valuation strategy is essential.

Human Tip: Be Proactive, Not Reactive

You can’t control which method SARS uses, but you can control your documentation, product positioning, and broker communication.

If you feel your goods are not fairly comparable, raise it early. Provide alternative reference values, request reassessment, and keep the dialogue open with SARS. Don’t just accept the declared value, question it when necessary.

Conclusion: Stay Compliant and Stay Competitive

At Transglobal Cargo, we’ve helped importers across Africa handle SARS valuation audits with confidence. Whether you’re shipping electronics, chemicals, defense items, or oversized goods, we work closely with customs to ensure the right method is applied with the right supporting evidence.

We understand the real costs of overvaluation, and we’re here to help you avoid them.

👉 Need support preparing your customs documentation or responding to a SARS query?

Contact us today, and let us guide you through.

🧭 Trusted by clients across Southern and East Africa.

📦 Experts in complex and high-compliance shipments.

What’s Next in the Series?
📌 Stay tuned for SERIES 4: Deductive Value – When SARS Works Backwards: Understanding Deductive Value in Customs Valuation