On 25 April 2014 Sars announced an increase in “General” rate of customs duty on heat exchange units, classifiable in tariff heading 8419.50, from “free” to the World Trade Organisation (WTO) bound rate of 15% ad valorem.
The application was published in the Government Gazette of 23 August 2013 heat exchange units, classifiable under tariff subheading 8419.40. The applicant reasoned that (i) raw materials required for the manufacture of the subject product are subject to customs duty, whereas the imports of the final product are currently duty free; (ii) engineering project contractors are increasingly sourcing the product from Asian countries which offer bargain prices because of government subsidies, funding packages etc; (iii) tariff support will enable the domestic manufacturer to be competitive against low-priced imports and subsequently assist in job retention and job creation in the domestic industry; and (iv) other countries apply tariffs on heat exchanges and this affects South African exports destined for these countries.