The South African government has published Notice 93 of 2021 on the guidelines, rules and conditions for 100% rebates on a range of imported textiles and yarns. The notice is aimed at bolstering garment manufacturing in small, medium and micro sized enterprises (SMMEs), and to save jobs in the textile and garments industry by reducing the costs of input materials.
According to the notice, the rebate applies to product code item group 311.40/00.00/01.04 which is textile yarns and textile fabrics, classifiable in Section XI of the Customs Tariff and approved by the International Trade Administration Commission (ITAC). These are yarns and fabrics imported for the manufacture of apparel and clothing accessories classifiable in Chapters 61 and 62, in such quantities, at such times, and subject to such conditions as the ITAC may allow by specific permit.
The rebate applies to all member states of the Southern African Customs Union (SACU) which includes Botswana, Lesotho, Namibia and Swaziland. Rebates are conditional on the issuance of a permit by the ITAC or other appropriate SACU government body. For permit issuance proof is required that the finished products will subsequently be supplied to and sold by retailers in SACU member states. Yarns and fabrics that are specifically covered by other rebate provisions will be exempt.
Rebate applicants must register with the South African Revenue Service (SARS) before applying for a rebate permit and need to submit a SARS letter of approval for registration as a rebate user. The rebates were announced after four months of dialogue between the government and industry stakeholders including the National Clothing Retail Federation, the Apparel and Textile Association of South Africa, the South African Apparel Association, the Apparel Manufacturers of South Africa and the Textile Federation.