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Bach, Bach, Bach!

15th March 2024

By: Riaan de Lange

     

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It has been a full 147 days since I last wrote about Gallus Domesticus. But then, who is counting? For context, or a refresher, you might want to reread two past instalments of this column. The first, titled ‘Egg-spectations’, was published on October 20, 2023, and the second, titled ‘Fowl play’, was published on August 18, 2023.

If you have more than a fleeting interest in the subject, you should consider rereading the following instalments as well: ‘No spring chicken’ (November 25, 2022), ‘Root cause of food inflation’ (September 2, 2022) and ‘Chickenomics’ (August 19, 2022). Or you could chicken out (just joking), if it is all too painful. As I have said before, what would a year be without the Southern African Customs Union’s (Sacu’s) protracted ‘drumstick wars’?

March 1 was a clucking good day for chicken importers – but perhaps not so for the Sacu producers, given the publication of not one, but three, Government Gazette notices. One was from the Department of Agriculture, Land Reform and Rural Development (DALRRD) and the other two from the South African Revenue Service (Sars). From this you can deduct that the first is for import permits, or import quota permits. The latter two are for tariff amendments and could either be for an amendment in the ‘general’ rate of customs duty or for a rebate item, also known as a rebate provision.

The notices for rebate provisions, or rather temporary rebate provisions in terms of Schedule No 4 of the Customs and Excise Act, 1964, are for the “general rebates of customs duties”. These provisions are introduced by Sars following their conceptualisation and formulation by the International Trade Administration Commission of South Africa (Itac). According to Itac’s own guidance, the “customs duty relief (rebate provision) will allow for a temporary waiver of the full customs duty arising from the import of the subject product, while the customs duty will remain in place and serve as an incentive for potential manufacturers to commence with the manufacturing of the subject product in the Sacu (region).”

The first provision, for boneless chicken cuts, was introduced with retrospective effect from January 26, and saw a reduction of the extent of the rebate from “full duty less 30%”, to “full duty less 12%”. The provision is for the importation of meat and edible offal of boneless chicken, for which the ’general’ rate of customs duty is 42% ad valorem.

To use the rebate provision, a specific permit is required, which Itac will issue, on application, after it has consulted with the DALRRD and both are satisfied that two conditions have been met: that the chicken pieces are only for consumption or manufacture of products for consumption in the country of import, and that the chicken pieces imported in terms of the provision are not re-exported to any other Sacu member State. The permit system will remain in use for the duration of a shortage of chicken pieces as a result of an outbreak of highly pathogenic avian influenza in South Africa.

The second provision, for other boneless chicken cuts, was introduced effective on the day and saw an increase in the extent of the rebate from “full duty less 25%” to “full duty less 37%”. The ’general’ rate of customs duty is 62% ad valorem. The requirements are the same as for the first provision.

As for the DALRRD Government Gazette notice, it is an “invitation to submit applications for a DALRRD quota import permit in terms of Rebate Item 460.03/0207.14.9/01.07 for the rebate of the full antidumping duty on bone-in cuts of the species Gallus Domesticus, frozen, classifiable in tariff subheading 0207.14.9 imported from or originating in the US”.

The permit will be allocated on a quarterly basis, and in equal amounts. In their submissions, applicants must provide bills of entry for the quantity imported over the past three calendar years: 2021, 2022 and 2023.

Should the title of this article intrigue you, it is the punchline to the children’s joke, “Why did Mozart get rid of his chickens?”, the answer to which is: “All they ever said was, ‘Bach Bach Bach!’”

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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