Flat steel products rebate: A looming showdown

The International Trade Administration Commission of South Africa (ITAC) received a policy directive from the Trade, Industry, and Competition Minister to investigate the possibility of creating a rebate facility on flat steel products. If the rebate is created, Customs duties and Safeguard duties on the products will be waived.

Flat steel is used by downstream manufacturers and they raised concerns regarding the shortage of steel in the local market. ITAC requested stakeholders to provide feedback, by February 19, 2021. ArcelorMittal South Africa (AMSA) will most likely resist this move because the existing duties were imposed at their behest. A showdown can therefore be expected.

A rebate can be a temporary rebate or an industrial rebate. Temporary rebates are subject to a permit being issued by ITAC prior to importing. This protects the local manufacturer or producer because once the temporary situation ceases to exist; ITAC may decide not to issue rebate permits.

Unlike an industrial rebate, a temporary rebate does not specify what the product imported under rebate will be used for. This is a key difference between temporary and industrial rebates. Once imported under a temporary rebate the product can be used to manufacture, produce anything, or be resold.

In contrast, an industrial rebate; specifies what the product imported under rebate will be used to manufacture or produce, specify the tariff code under which the manufactured product is classified. Traders or companies who are not manufacturers cannot benefit from an industrial rebate. Traders benefit from a temporary rebate.

Are you impacted and want to make submissions to ITAC? Contact us at infor@tradesolutions.co.za