How Excise Duty Works on Bulk Spirits Imported into South Africa

Most buyers importing bulk spirits into South Africa budget for the landed price and the customs duty, then get caught out by excise. Excise is usually the largest single cost in the chain, and it is calculated and paid in a way that is quite different from ordinary import duty.

This guide explains how SARS treats bulk, unpacked spirits, based on the current SARS Spirits External Policy (SE-SP-02), effective 4 March 2026.

Excise is charged on alcohol, not on volume

The single most important point: excise is not charged on how many litres of liquid you import. It is charged on litres of absolute alcohol (LAA).

The calculation SARS applies is:

• Bulk volume multiplied by alcoholic strength gives LAA

• Then LAA multiplied by the rate in Schedule 1 Part 2A gives the excise payable

So 10,000 litres of spirit at 96% strength is 9,600 LAA, while 10,000 litres at 43% is 4,300 LAA. Two shipments of identical size can carry very different excise bills. When you compare quotes from suppliers, compare on LAA, not on bulk litres.

The rate itself sits in Schedule 1 Part 2A and is revised at each February Budget. Budget 2026 added roughly R3.20 to a 750ml bottle of spirits. Always confirm the rate in force on the day of removal rather than the day of arrival.

Duty is paid when you remove the spirit, not when it lands

South Africa applies the duty-at-source principle. Imported unpacked spirits are declared on a customs clearance declaration under procedure code E 40-00 and placed in a customs storage warehouse, known as an OS in SARS terminology.

While the spirit sits in that warehouse, the duty is suspended. Movements between bonded warehouses are also duty-suspended. The excise liability only crystallises when the spirit is removed for home consumption, and the rate applied is the rate in force on that date.

For a blender or bottler this is a genuine cash-flow advantage. You can land a full tanker or a set of IBCs and pay excise in stages as you draw stock down, rather than paying on the entire consignment at the port.

The storage loss allowance

SARS allows a fixed storage loss of 0.25% to be deducted from the landed volume before the volume is entered into the warehouse register. This covers normal handling and evaporation.

Beyond that, no storage losses are permitted except under force majeure. Any shortage found on audit must be paid immediately. In practice this means your warehouse register and your physical stock need to reconcile tightly, because a gap is treated as duty owed rather than as a measurement error.

Every importer needs a tariff determination

This is the step most new importers miss. Every importer of an alcoholic beverage must apply to SARS for a tariff determination, even where a determination already exists for that same product under another importer.

The application must set out the brand, the manufacturing process, the ingredients and their proportions, and the alcoholic strength. Where the Liquor Products Act applies, a confirmation letter is required with it.

A fresh application is needed before clearance if any of these change: the brand, the process, the ingredients, the proportions, or the alcoholic strength. A supplier switching you from 96% ENA to a 93% grade is not a minor change, because it triggers a new determination.

Records SARS expects you to keep

• The excise account (DA 260) and its schedules, completed in full, retained for audit and produced on request

• An OS register updated for every receipt, removal and repacked quantity

• Removal and re-warehousing documents recorded in the relevant registers

Repacking bulk spirit inside the warehouse is not automatic. It requires written approval from the Controller or Branch Manager, and a draft voucher of correction must be submitted.

Special warehouses and rebate users

A special storage warehouse (SOS) is licensed for limited purposes only: export, supply to duty-free shops, ships and aircraft chandlers, denaturing, and packing or repacking for rebate users.

Spirit held in an SOS is intended for export, for consumption outside SACU, or for industrial and non-liquor use. It cannot be moved into the SACU duty-paid liquor market without the Commissioner's written approval. SOS licensees other than duty-free, ship and aircraft chandler licensees file an EXD 260 quarterly.

If you are buying spirit for industrial or other non-liquor use, you register with SARS as a rebate user and keep a rebate register together with commercial invoices for local removals.

What this means when you choose a supplier

Because excise is calculated on alcohol content and assessed at removal, two things matter more than headline price.

• Strength consistency. If delivered strength varies from what your tariff determination records, you have a compliance problem as well as a blending problem.

• Documentation. Your supplier's certificate of analysis, declared strength and invoice descriptions all feed your clearance and your warehouse register.

VKM Liquor supplies bulk whisky, vodka, gin, rum, malt spirit and extra neutral alcohol from our distillery in Himachal Pradesh, India, with consistent declared strength and the documentation importers need for clearance.

If you are at an earlier stage, our guide to importing bulk spirits into South Africa covers registration and the import certificate, and our supplier checklist covers what to verify before placing a first order.

Rates and procedures change. Confirm current figures against the SARS Tariff Book and Schedule 1 Part 2A before committing to a landed-cost model.