Well done to ITAC and the Ministers of Trade and Finance in concluding an investigation in 18 months. It’s been a while and we’re smiling!
The South African Revenue Service (SARS) has announced two key customs duty amendments on 20 September 2024. First in line, because we’re so excited, is the 18 month decision.
1. Customs Duty Increase on Plate-Type Heat Exchange Elements for Air Pre-Heaters
In another amendment to Part 1 of Schedule No. 1, tariff subheading 8404.90 has been substituted, and two new subheadings—8404.90.10 and 8404.90.90—have been inserted. This change increases the general rate of customs duty on plate-type heat exchange elements for air pre-heaters from free of duty to 5%, following ITAC Report 718, signed by ITAC’s chief commissioner on November 20, 2023.
Applicant: Howden Power Pty Ltd
Justification: This duty increase was made through the creation of a new 8-digit tariff subheading and sets the rate at 5%, which aligns with the WTO world bound rate, ensuring it cannot be raised beyond this threshold. The adjustment seeks to support local manufacturing by shielding Howden Power from the growing impact of foreign imports in this specialised equipment sector.
The investigation initiated in April 2023 and took 18 months to complete, exceeding the expected timeline by 12 months.
2. Increase in Customs Duty on Sulphates and Persulphates of Copper
An amendment to Part 1 of Schedule No. 1 has been made, increasing the general rate of customs duty on sulphates; alums; peroxosulphates (persulphates) of copper, classified under tariff subheading 2833.25, from duty-free to 10%. This change is based on ITAC Report 675 and was signed by ITAC’s chief commissioner on April 29, 2024.
Applicant: Kimleigh Chemicals SA (Pty) Ltd
Justification: The duty increase was granted due to a decline in Kimleigh Chemicals’ profit margins, even as imports of these chemicals continued to rise. This measure is intended to provide relief to the local industry and to allow the applicant to remain competitive amidst an increase in imports.
The investigation initiated in July 2021 and took 39 months to complete, exceeding the expected timeline by 33 months.