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New Tariff Investigations by The International Trade Administration Commission of South Africa

11 December 2013   (0 Comments)
Posted by: Author: Andre Erasmus
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Author: Andre Erasmus

In terms of the Anti-Dumping Regulations, any definitive anti-dumping duty shall be terminated on a date not later than five years from its imposition, unless the authorities determine, in a review initiated before that date on their own initiative or upon a duly substantiated request made by or on behalf of the domestic industry that the expiry of the duty would be likely to lead to continuation and/or recurrence of dumping and material injury.

On 29 June 2012, the International Trade Administration Commission of South Africa (ITAC) notified the interested parties that unless a substantiated request is made indicating that the expiry of the anti-dumping duties on imports of tall oil fatty acid originating in or imported from Sweden would likely lead to the continuation and/or recurrence of dumping and injury, the anti-dumping duties on tall oil fatty acid originating in or imported from Sweden will expire on 11 December 2013.

On 22 November 2013, ITAC initiated the Sunset Review. All interested parties have 30 days from this date to respond to ITAC’s investigation.

Dumping of Graphite Electrodes

On 22 November 2013, the International Trade Administration Commission of South Africa ("ITAC”) initiated an investigation into the alleged dumping of graphite electrodes for use in furnaces originating in or imported from the People's Republic of China ("China”) and India.

According to the applicant, Graf Tech South Africa (Pty) Ltd, the product is being dumped on the South African market at dumping margins of 338.57% from China, and 16.28% from India.

All interested parties, importers and exporters have 30 days from 22 November 2013 to respond to ITAC’s investigation.

Rebate item for plates, sheet, film, foil and strips of poly (methyl methacrylate) for the manufacture of plastic sanitary ware

ITAC is investigating the creation of a rebate of full duty on other plates, sheet, film, foil and strips of poly (methyl methacrylate) non-cellular and not reinforced, laminated supported or similar combined with other materials, classifiable in tariff subheading 3920.51 for the manufacture of sanitary ware, of plastics classifiable in tariff heading 39.22.

The applicant, Libra Bathrooms (Pty) Ltd, stated as reasons for their application that:

  1. there are no local manufacturers of the subject products, since the sole manufacturer Perspex SA (Pty) Ltd stopped production in 2012;
  2. Libra Bathrooms has made annual losses for the past years;
  3. the current import duty of 10% ad valorem on the main raw materials makes it difficult to compete with low priced imports from eastern countries which are also gaining substantial market share each year; and
  4. huge investment and jobs are at risk if Libra Bathrooms cannot become profitable.

All interested parties and importers have four weeks from 22 November 2013 to respond to ITAC’s investigation.

Amendment of the Duty Structure for Certain New Pneumatic Tyres 

ITAC is investigating imposing formula based customs duties in place of the current ad valorem customs duties on tyres for motor cars (including station wagons and racing cars), buses and lorries, irrespective of the load index or rim size. The alternative specific duty will range from R28.84 per kilogram to R30.83 per kilogram.

The applicant, Apollo South Africa (Pty) Ltd, has stated as reasons:

  1. There has been a massive influx of low-priced and under invoiced imported tyres mainly from China. Since 2009, Chinese tyre exports continued to climb by 35% and 40% in 2010 and 2011, respectively.
  2. China operates a complete upstream and downstream tyre industry value chain accompanied with relatively cheap energy and low labour costs which make South African Tyre Manufacturers unable to compete.
  3. During the period 2004 to 2012, SACU production volume for passenger and commercial tyres declined from 12.4 to 10.1 million units.
  4. The intention of the introduction of a reference price into the duty structure is to counter under-invoicing.
  5. The reference price is based on material content and direct labour.

All interested parties and importers have four weeks from 22 November 2013 to respond to ITAC’s investigation.

Proposed amendments to the rebate item applicable to Customs Controlled Areas within Industrial Development Zones 

Rebate item 498 of Schedule 4 to the Customs and Excise Act provides for imported goods to be admitted under rebate of duty for use in specified activities in the customs controlled areas ("CCA") of Industrial Development Zones ("IDZ”).

Note 1 to rebate item 498 ("Note 1”) provides that all goods may be entered under rebate item 498.01: Goods of any description imported by a registered CCA enterprise into the CCA, as long as it is imported and entered by a registered CCA enterprise.

On 22 November 2013, The International Trade Administration Commission of South Africa ("ITAC”) initiated an investigation into the possible amendment of Note 1 to exclude goods required to be entered in terms of any other item of Schedules 4 or 3 of the Customs and Excise Act.

ITAC is further considering inserting a Note 9 into Schedule 3 to the Customs and Excise Act that would read as follows: Goods may be entered under any rebate item of this Schedule by a CCA enterprise as contemplated in rule 21A.01 and registered in terms of such item, provided -
(a) The CCA enterprise complies with any notes to that item and this Schedule, and section 75; and
(b) The VAT is paid on goods imported by the CCA enterprise under any item in this Schedule.

The applicant is the Department of Trade and Industry which gave as reasons for the application:

  1. Companies locating within a CCA, intending to import manufacturing inputs are currently at a disadvantage in terms of customs duty which has to be paid on the imported content at the time the manufactured goods are declared for domestic use in terms of rebate item 498.
  2. Under Schedule No.3 which applies outside the CCA, a manufacturer qualifies for a rebate of customs duty but pays the Value Added Tax (VAT), if they choose to supply their finished products into the domestic market.

An enterprise located in a CCA of an IDZ and registered under the Customs and Excise Act as a CCA enterprise will therefore be able to import any goods under rebate item 498, unless it is required to enter such goods under Schedules 3 or another Schedule 4 rebate item to qualify for any other related rebates.  

Goods imported under rebate item 498 and most Schedule  rebate items are exempt from value-added tax ("VAT”) in terms of section 13(1) of the VAT Act. Section 13(1) of the VAT Act and Schedule 1 thereto does not allow for any VAT exemptions on goods imported under any Schedule 3 rebate item and import VAT therefore remains payable on goods imported under Schedule 3. The requirement of the proposed Note 9 (b) to Schedule 3 that the VAT is paid on goods imported by the CCA enterprise under any item in this Schedule, therefore seems superfluous.

This is nevertheless a welcome amendment for IDZ Operators that now have additional benefits it can offer CCA enterprises in that the CCA enterprise has more flexibility in terms of which rebate item to use depending on its own structure. 

This article first appeared on ensafrcia.com.


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