"We have made the decision not to pursue legal action at this time, but instead to continue further discussions with the government on the formulation and application of the rules during the Covid-19 closure," a statement said.
BATSA said it received a response to a letter sent in late April to the National Command Council, and was "convinced that by working together we can find a better solution that works for all South Africans and removes the threat on criminal sanction of 11 million tobacco consumers in the country ".
The tobacco company, which has a 78% stake in South Africa's legal cigarette market, did not say what the letter said.
The ban on cigarette and tobacco sales was first introduced on March 26, when the nationwide lockdown began. The ban continued below Level 4 of the lockdown, which has been in place since early May.
BATSA reiterated its view that "illegal dealers are the sole beneficiaries of the ban on tobacco sales".
“Although BATSA supports the government in its mission to prevent further spread of the virus, we believe it is important that there is renewed and stronger action under Level Four to permanently close the illegal tobacco supply lines established over the last weeks. Opening the legal, taxed and regulated tobacco market must be part of the solution. "
On Tuesday, SA Revenue Service Commissioner Edward Kieswetter told MPs cigarettes were still being bought and sold illegally despite the closure.
A separate lawsuit from the Fair Trade Independent Tobacco Association to force the state to reintroduce the sale of tobacco products will be heard in court as early as next week. BATSA is not a member of FITA.
The association claimed in court papers filed earlier this week that there is no reason to contest the ban on cigarette, and tobacco products are related to combating the Covid-19 virus.