By Donald MacKay | May 27, 2021
On 21 May 2021, ITAC published an investigation for the amendment and creation rebate facilities under rebate item 311.42. The products covered include other woven fabrics of cotton; woven fabrics of flax; woven fabric of synthetic staple fibres; woven fabrics of artificial staple fibres; textile fabrics impregnated, coated, covered or laminated with polyvinyl chloride; other textile fabrics impregnated coated, covered or laminated with plastics; woven fabrics of synthetic fibres; woven fabrics of synthetic staple fibres; and textile fabrics impregnated, coated, covered or laminated with polyurethane.
The creation of rebate facilities applies to the following tariff subheadings: 5212.1, 5212.2, 53.09, 5512.12, 55.16, 5903.10.90, and 5903.90.90. While the rebate amendments apply to following tariff subheadings: 55.13, 55.14 and 5903.20.90.
The applicant, Sheraton Textiles Holdings (Pty) Ltd, submitted the following reasons as motivation:
- Home textile finished goods may be imported into South Africa at a 30% duty rate, whilst the fabrics incur at a 22% duty rate. This gap does not allow South African textile manufacturers to compete with manufacturers from countries in the East.
- All major home textile manufacturing countries such as China India and Pakistan, give significant export incentives to their manufacturers. This means that in many cases that the fully duty paid, end products can land in South Africa at a price almost equivalent to the duty paid price of the fabric used to make the products.
- Furthermore, the 22% duty applied to fabric serves no purpose other than revenue generation, as the wide width fabrics used by the home textile sector are not manufactured in South Africa. In respect of the current application, none of the fabrics are manufactured in South Africa.
- This rebate provision has been credited by the home textile sector and its retail customers as the largest single positive factor in ensuring increased localization over the past 10 years. It has not only resulted in the prevention of job losses but has also contributed to the creation of new ones.
- The applicant also seeks to update the list of fabrics covered by the rebate to cover new products that emerged since the inception of the 311.42 rebate and allow for the broadening of the rebate to include blackout curtaining (from coated fabrics). This will ensure that local home textile manufacturers are able to meet the needs of their retail, customers, hospitality, and institutions, and will create jobs needed to make these products in the process.
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