On 22 September 2017 ITAC initiated a duty increase on coated paper and paper board classifiable under tariff subheading 4810.92.90. The applicant, Mpact Operations (Pty) Ltd, requested that the duty be moved from free to 5% ad valorem.
Although this investigation is still ongoing, ITAC expanded the scope of the investigation to include a temporary rebate investigation through a gazette published on 16 March 2018.
What is the effect of the expanded scope?
This means the investigation no longer covers a duty increase only but now also covers a temporary rebate investigation. A temporary rebate is an instrument used to provide import duty exemption for specific products under certain circumstances to avoid unintended consequences. In this case if the duty is increased to 5%, certain specific products would be imported under rebate to avoid the new duty.
It is likely that ITAC and the applicant, Mpact, may have realised that not all products imported under tariff subheading 4810.92.90 are made locally. Alternatively, the imported products and the local products may differ in some respects and may not be entirely substitutable.
Such products will certainly need to be exempted from the duty increase and the perfect way to do so is through a temporary rebate. A temporary rebate envisages that the market situation is temporary and will change at a later stage. Once that envisaged changed occurs, the temporary rebate will be removed.
Interested parties that had submitted comments initially do not have to resubmit, however, they may submit comments specifically on the temporary rebate. Nevertheless, making additional comments on the duty increase is not prohibited. This in fact gives a good opportunity to companies that had not provided their comments at all on the investigation initiated in September 2017.
Draft rebate guidelines
The draft rebate guidelines were included in the initiation gazette of 16 March. This indicates that the temporary rebate will most certainly be created, although of course, the details of the rebate can only be finalised after comment has been received. Rebate guidelines stipulate how the temporary rebate will operate in practice i.e what products are eligible to be imported under rebate, rebate permit application requirements and conditions among others.
It is vital that the guidelines do not place an administrative burden on importers to utilise the rebate. In this regard it is therefore vital to understand the guidelines and provide comments on any areas of concern to ensure the final guidelines are not burdensome.
Deadline to submit comments
Interested parties have until the 13th of April to submit comments to ITAC.