Increase in the rate of custom duty on Stranded wire, Robes and Cables

22 Jul 2016

The rate of customs duty on stranded wire, ropes and cables have increased from 5% ad valorem to 15% ad valorem from 22 July 2016.

They were concerns regarding the lack of protection against imports of finished products that often came at an unsustainably low price. Government Gazette and Scaw Metals (Pty) Ltd (Scaw) presented statistics to the commission to persuade an increase in the rates of customs duty on stranded wire, ropes and cables classifiable under tariff subheadings 7312.10.20, 7312.10.40. The Commission took the statistics given into justification and took the following factors into account: A material increase of low priced imports was considered mostly imports from china because these imports were a disadvantage for our domestic producers, the domestic industry market dropped below its potential and increasing low cost structure combines with low cost margins.

The Commissions conclusion was that the tariff support should allow companies manufacturing stranded wire, ropes and cables to utilise its existing production capacity which will increase outputs due to operational efficiencies. The commission also mentioned that domestic industry manufacturers have a number of products classifiable under the tariff subheadings and has the capability to manufacture products which are not manufactured locally. A temporary rebate provision was created for products currently not manufactured domestically. Stranded wire, ropes, cables of iron or steel and Plaited bands, slings of iron or steel that are not electrically insulated may be allowed by a specific permit, provided the products are not available in the SACU market.

Comments objecting to the application were received from Tata Africa Steel Processor (Pty) Ltd, WireCo World Group, Anchor Industries (Pty) Ltd, Condra (Pty) Ltd and XA International trade advisor on behalf of G. Twaddle and H Engelbrecht (Pty) Ltd, Lift Quip (Pty) Ltd, Shutterlok (Pty) Ltd, NNR Trading (Pty) Ltd, Burncrete (Pty) Ltd, Engineering Supplies (Pty) Ltd, Elephant Lifting (Pty) Ltd and Rope Construction (Pty) Ltd. The objections centred on the negative impact of duty on certain ropes constructions which are currently not manufactured locally, the lack of investment done by Scaw Metals (Pty) Ltd and also the fact that there are importers of this subject metals and lastly the objection was raised because of the circumvention of duty by unscrupulous importers.

The duty structure on stranded wire, ropes and cables are to be reviewed after a period of three years from the date of Implementation. In the meantime the commission recommended that the tariff structure for certain stranded wires products and steel wire ropes plus cables are to increase from 5% to 15% ad valorem.