Request for a temporary rebate of duty for solar panels which don’t attract duty. Odd.


On Friday, 25 August 2023 ITAC initiated a new tariff investigation for the creation of a temporary rebate on “Photovoltaic cells assembled in modules or made up into panels, classifiable in tariff subheading 8541.43, in such quantities, at such times and subject to such conditions as the International Trade Administration Commission may allow by specific permit, provided the subject goods are not available in the SACU market”.

The reason given for the application is “[t]he need to consider, in light of the development of a South African Renewable Energy Masterplan, which seeks, in part, to advance strategic localisation, whether a rebate provision is necessary to assist with local renewable energy manufacturing”.

Straightforward, right? Wrong.

On 29 March 2019, ARTsolar applied for a duty increase on “Crystalline silicon photovoltaic modules or panels classifiable under tariff subheading 8541.40.10, by way of creating an 8-digit tariff subheading, from free of duty to 10% ad valorem.”

ARTsolar listed a few reasons for their application, which included:

  1. There is currently no protection for photovoltaic module manufacturers in the SACU;
  2. Protection is needed to retain the remaining local production capacity and jobs to enable the local industry to significantly grow; and
  3. A number of photovoltaic module/panel manufacturers had ceased their production operations in the SACU region due to high competition from low-priced imports.

In the meantime, 53 months have passed and this application has still not been finalised and so remains duty-free. The application is mentioned in our third Import Duty Investigations report (you can and should download the report here).

Fast forward to 1 January 2022 and the World Customs Organization (WCO) seventh edition of the Harmonised System (HS) nomenclature is implemented worldwide for the uniform classification of goods traded internationally.

The new HS2022 edition makes some major changes to the Harmonized System with a total of 351 sets of amendments. Among these amends is the replacement of HS 8541.40.10 with two new tariff codes.

HS 8541.42 – Photovoltaic cells not assembled in modules or made up onto panels; and
HS 8541.43 – Photovoltaic cells assembled in modules or made up into panels (the tariff code the rebate is proposed on).

This brings us to the critical question. If the duty increase on HS 8541.40.10 was never finalised and imposed and the “new” updated tariff code HS 8541.43 is still duty-free, why did ITAC initiate an investigation to create a temporary rebate?

Interested parties have until 8 September 2023 to submit their responses.

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