On 16 March Itac published an application for the increase in the rate of duty on and creation of a temporary rebate provision for (i) Coated paper and paper board, classifiable under tariff subheading 4810.92.90, from free of duty to 5 per cent ad valorem; and (ii) Temporary rebate of full duty on “Other paper and paperboard, coated on one or both sides with kaolin (China clay) or other inorganic substances, with or without a binder, and with no other coating, whether or not surface-coloured, surface-decorated or printed, in rolls or rectangular (including square) sheets, of any size, multiply paper and paper board classifiable in tariff subheading 4810.92.90, containing less than 50 per cent by mass of pulps of fibres derived from recovered (waste and scrap) paper or paperboard or of other fibrous cellulosic material classifiable in tariff heading 47.06, in such quantities at such times and subject to such conditions as the International Trade Administration Commission may allow by specific permit provided the Commission is satisfied that the products are not available in the Sacu region”.
Note: On 22 September 2017 the applicant’s request for an increase in the rate of customs duty was published in the Government Gazette for comment. In the course of the preliminary investigation, Itac decided to also consider the possibility that if an increase in the rate of customs duty on the abovementioned products was recommended, that a temporary rebate provision, as set out above, be considered subject to an Itac permit.
The published draft guidelines are available on request.
The application was lodged by Mpact Operations (Pty) Ltd t/a Mpact Paper’s Springs Mill who reasoned that it required the increase in the rate of duty to (i) Stimulate further development of the Southern African Customs Union (SACU) paper manufacturing sector and the associated industry/sector pipeline; (ii) Compensate industry for certain competitive disadvantages it experiences; (iii) Level the playing field vis-à-vis customs duties protection in the exporter countries by aligning the SACU customs duties on subject product/s to levels that are justifiable and comparable to those in competing/similar economies; (iv) Provide a small but critically important “buffer” against increasingly rapid fluctuations of market conditions in the global economy and foreign exchange fluctuations influencing the local economy; and (v) Protect SACU producers’ capacity and market share in the domestic market to provide an effective and stable base market to support local manufacturing and substantial on-going investment to ensure industry sustainability.
Comment is due by 13 April.
DRAFT GUIDELINES, RULES AND CONDITIONS PERTAINING TO:
Other paper and paperboard, coated on one or both sides with kaolin (china clay) or other inorganic substances, with or without a binder, and with no other coating, whether or not surface-coloured, surface-decorated or printed, in rolls or rectangular (including square) sheets, of any size, multiply paper and paper board classifiable in tariff subheading 4810.92.90, containing less than 50 per cent by mass of pulps of fibres derived from recovered (waste and scrap) paper or paperboard or of other fibrous cellulosic material classifiable in tariff heading 47.06.
Interested parties are hereby notified that all applications submitted for permits in terms of rebate item ........ will be dealt with according to the guidelines as described in this notice and must be submitted in the format as set out in the application forms where applicable. For the convenience of all interested parties, the following guidelines in respect of the abovementioned rebate item subject to publication are attached to this notice. The application forms related to the rebate item mentioned above are obtainable from Itac’s website at www.itac.org.za and from Itac, Block E: the dti Campus, 77 Meintjies Street, Sunnyside, Pretoria.
Note: In terms of section 26 (4) of the International Trade Administration Act, 71 of 2002, the Commission may, inter alia, require an applicant to provide additional information in respect of the application. The conditions attached to and the information requested below reflect the minimum requirements that Itac would apply to evaluate an application under this rebate provision.
1. Applicants must register with South African Revenue Service (Sars) as users of this rebate provision, and they must acquaint themselves with the requirements of Sars.
2. Applications for permits must be addressed to the International Trade Administration Commission (Itac), Private Bag X 753, Pretoria 0002 or delivered by hand to the DTI Campus, (Block E), 77 Meintjies Street, Sunnyside, Pretoria, 0002.
3. Applications for permits must be submitted according to the requirements as set out in the attached application form. If the space provided in the application form is insufficient, please complete additional pages using the format of the application form to submit the requested information.
4. Qualifying products under rebate item ...... are as follows: Other paper and paperboard, coated on one or both sides with kaolin (china clay) or other inorganic substances, with or without a binder, and with no other coating, whether or not surface-coloured, surface-decorated or printed, in rolls or rectangular (including square) sheets, of any size, multiply paper and paper board classifiable in tariff subheading 4810.92.90, containing less than 50 per cent by mass of pulps of fibres derived from recovered (waste and scrap) paper or paperboard or of other fibrous cellulosic material classifiable in tariff heading 47.06
5. If all the information requested in the application form is not submitted, the application will be deemed deficient. The application will not be considered, and it will be returned to the applicant.
6. At least fourteen (14) days should be allowed for the processing of applications and the issue of permits, provided that all necessary information which renders the application duly completed has been submitted to Itac.
7. Each rebate permit issued defines the period during which the goods concerned can be cleared under the rebate item. The rebate permit will only be valid for a period of twelve (12) months, commencing from the date on which the permit is issued. The permit may be issued for a shorter period as requested by the applicant, or as decided upon by Itac.
8. If an applicant intends to apply for a subsequent permit for which the period of validity should commence on the day after the expiry date of the permit issued in terms of paragraph 7, this must be clearly indicated in a new application. The application must be submitted to Itac two weeks prior to the expiry date of the previous permit as permits cannot be issued with retrospective effect.
9. Rebate permits issued will be subject to the following conditions:
9.1. Permits will only be issued after it has been established that the Sacu paper and paperboard production cannot meet the demand for paper and paper board, classifiable in tariff subheading 4810.92.90 and containing less than 50 per cent by mass of pulps of fibres derived from recovered (waste and scrap) paper or paperboard or of other fibrous cellulosic material classifiable in tariff heading 47.06, by downstream users of paper and paper board-based products.
9.2. The applicant(s) must first consult with industry associations (PAMSA etc.) and known local manufacturers of paper and paper board (Mpact Operations (Pty) Ltd t/a Mpact Paper). Additionally, a sample of the product to be imported should also be provided to these parties. The relevant stakeholders should then provide confirmation with regard to the extent of local availability of the paper and paperboard to be imported under rebate.
9.3. The application must be accompanied by the letter referred to in paragraph
9.2, with a date not older than 30 days from the date of the application, as proof that the SACU manufacturer(s) cannot supply the product in question.
9.4. Should, after receipt of the SACU paper and paperboard manufacturer’s response, or in absence of such, information be available that the downstream users of paper and paperboard based products are unable to source the required quantity of paper and paper board classifiable in tariff subheading 4810.92.90, containing less than 50 per cent by mass of pulps of fibres derived from recovered (waste and scrap) paper or paperboard or of other fibrous cellulosic material classifiable in tariff heading 47.06, the quantity of the product in question required should be submitted by the applicant for ease of verification purposes by ITAC. ITAC may issue a permit with or despite the required agreement within the SACU paper and paperboard manufacture(s).
9.5. The applicant must provide a formal letter on the applicant’s business letter head confirming that the applicant complies with labour laws, regulations and agreements gazetted by the Minister of Labour.
9.6. The applicant must submit a Sars PIN to enable Itac to verify the Applicant’s tax clearance status on the Sars Tax Clearance System. Should challenges exist in providing this information, give detailed reason/s for the absence thereof. Thereafter, applicants will be requested to submit a valid tax clearance certificate.
9.7. The applicant must submit a letter of consent agreeing to transparency in that the following information may be shared with industry and government stakeholders [PAMSA, Mpact Operations (Pty) Ltd and the Department of Trade and Industry (the dti) (Agro-processing directorate) etc.]. The stakeholders should treat the following data supplied, as confidential and should not release it to a third party:
• Name of applicant;
• Contact details of applicant;
• Technical description of paper and paperboard; and
• Volume applied for.
9.8. In the event that the applicant’s request to import the required paper and paperboard is not supported, the applicant should consult with the relevant dti sector desk (Agro-processing directorate). The dti directorate will thereafter provide proposals in this regard.
9.9. Firm commitments in the form of signed contracts and/or proof of purchasing (i.e. purchase orders) of locally manufactured fabrics must be included in the application to ITAC.
9.10. As a rebate provision is considered for the purpose of providing relief to domestic users that may experience injurious import pressures against similar imported end products, the benefit of the rebate provision will be tied to conditions related to economic performance over time and may be reviewed after a specified period. Reciprocity commitments as set out in the application form must be addressed in each application submitted.
9.11. The applicant must commit, inter alia, to the creation of employment and provide in each permit the number of jobs it expects to create annually as a result of the rebate permit granted. The applicant must submit to Itac an annual report on its job creation performance.
9.12. Rebate permits may not be transferred in any manner by the holder thereof to any other person, or be used to the benefit of any person, not named in the permits.
9.13. Permits in relation to this rebate provision should be applied for and received before the goods concerned are shipped.
9.14. Any request for an amendment to a rebate permit must be forwarded to Itac for consideration. Amendments will only be considered in the following instances:
a) Error by ITAC on permit;
b) Error by applicant regarding the product description or tariff subheading. This will only be processed if the request is accompanied by a confirmation from SARS in this regard.
9.15. Should any party misplace a permit, the applicant should submit an affidavit on a company letterhead endorsed by a Commissioner of Oath, stating that the permit was lost and the circumstances surrounding loss of such permit. Itac may, on the facts furnished, exercise its discretion to issue a new permit that replaces the lost permit. Should the lost permit be found the applicant must return such permit to Itac.
9.16. Extension of the period for which the permit is valid may be granted. Extensions will only be granted where the relevant permit has not expired, and in the view of Itac, good cause warrants extension of such permit. Such discretion shall lie solely with Itac. Extensions will only be permitted for a period up to 3 months and the party applying for the extension must submit a letter and supporting documents to Itac, furnishing reasons and good cause for the extension.
9.17. The permits are issued at the discretion of Itac. Should the application be rejected; the applicant will be informed in writing of the decision and the reasons therefore. Non-compliance to the conditions of permits:
10.If a prima facie case is established that any condition of a permit issued, in terms of this rebate provision, has not been complied with, the consignment in terms of which the rebate was used can be seized by Itac and the rebate permit temporarily suspended while Itac conducts an investigation. If it is established that non-compliance occurred, appropriate steps will be take. These steps will be taken in terms of the International Trade Administration Act, Act 71 of 2002 and the Customs and Excise Act of 1964 that can include, criminal charges, withdrawal of the permit or permits concerned and/or the rejection of future applications for permits.