Food manufacturers, see how you can cash in on the diesel refund extension

Nhlanhla Mdlalose
Tax Manager
February 12, 2024
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In 2000, the government implemented the diesel refund system.

The aim was to provide full or partial relief for the general fuel levy and the Road Accident Fund (RAF) levy to the primary sectors. 

(Photo: Nicholas Veithen)

The diesel refunds are claimed based on the diesel type, including primary producers on land (farming, mining, and forestry) and offshore activities (commercial fishing, coasting vessels, offshore mining, etc).

Due to the current electricity crisis, a similar refund on the RAF levy for diesel used in the manufacturing process, such as generators, will be extended to the manufacturers of foodstuffs. 

This refund system was effective from 01 April 2023 to 31 March 2025. 

The relief was created to limit the impact caused by the power cuts on the entities, and the government also hopes this relief will limit the food price increases.

SARS administers the new refund to the extent of 80% of the RAF levy for diesel purchased for use and used in the manufacturing of foodstuffs.

(Photo: Engin Akyurt)

This is through the DA66 form at the Excise office. 

The refund system is separated from the diesel refund system administered by SARS through the VAT system by submitting the VAT201 returns.

The Customs and Excise Act No. 91 of 1964 (The Act) and Schedule No. 6 (Note 6 in Part 3) govern the diesel refund scheme.

The manufacturers of foodstuffs need to meet the following requirements to qualify for a diesel refund.

Only manufacturers of foodstuffs classifiable under chapters 2 to 21 can register for diesel refund under this scheme.

Manufacturers of any products contained in chapters under schedule No. 1, Part 1 are excluded:

  • Any items listed under chapters 5, 6, 13, and 14.
  • Any items listed under chapters 22 to 99.
  • Beverages are classifiable under schedule No1, part 7, section A.
  • Any process that already qualifies for refund item 670.04.

What I do need to register?

  • The applicant must be registered for VAT.
  • Complete and submit the DA185 form and Annexure DA185.4A3.
  • Applications must be made per person/ entity, and information about each manufacturing premises must be supplied separately in the appendix attached to the DA185.4A3.

How do I claim the refund?

  • The refund of levies will be considered only when the refund user and manufacturing premises are registered.
  • A claim for refund must be submitted on the DA66 form per period (monthly) accompanied by supporting documents at the excise office nearest the manufacturing premises.
  • Refunds can only be claimed for duty-paid diesel purchased and used in South Africa.