GACC Announcement No.68, 2016 on Commissioned Processing in Customs Special Control Areas

In order to regulate commissioned processing business undertaken inside Customs special control areas (hereinafter as the control areas), relevant matters are hereby announced:

1. The commissioned processing business herein means that the enterprises located inside Customs special control areas are commissioned by those outside the control areas to process the goods supplied from the outside and, after the processing, transit products out of the control areas so as to earn processing fees, along with tax payment to the Customs; the goods to process include non-bonded and bonded materials, parts, finished products, defective products, wastes, by-products and leftovers.

2. This Announcement is applicable to the enterprises located inside Customs special control areas such as export processing zones, bonded port areas, free trade zones, Zhuhai-Macao Cross-Border Industrial Zone (Zhuhai Park) and China-Kazakhstan Khorgos Border Cooperation Center (on China side) and undertaking the commissioned processing business upon any of the conditions below:

(1) Permitted by China laws and regulations;
(2) Approved by the State Council of China;
(3) Approved by other government agencies of China

Bonded testing and repair business inside the control areas shall be subject to GACC Announcement No. 59 of 2015.

3. Where the enterprises inside undertake the commissioned processing, they shall set up relevant electronic account (i.e. H Account) and the commissioned goods shall be placed separately from other bonded goods.

4. The materials used for the commissioned processing shall be supplied from the outside in principle; if it is necessary to use the bonded materials inside the control areas, the enterprises inside shall apply to the Customs in advance.

5. When the materials enter the control areas from outside, relevant enterprises outside shall submit Export Declaration Form under the control mode “Export Materials for Processing” (code 1427), meanwhile corresponding enterprises inside shall submit Inbound Goods Registration Form under the control mode “Materials Into & Out of Areas” (code 5000).

6. Where the materials entering the control areas are subject to export duties, relevant enterprises shall make guarantee as required to the Customs.

7. When finished products on the commission exit from the control areas, relevant enterprises outside shall submit Import Declaration Form under the control code “Export Materials for Processing” (code 1427), describing the finished products and processing fees. If finished product quantity is declared as actual exit quantity, the taxation mode will be “all exempted”; if value-added processing fee quantity is declared as 0.1, the taxation mode will be “taxed by rule”; commodity name and HS code shall be declared as the actual name and HS code of certain finished product.

Meanwhile, corresponding enterprises inside shall submit Outbound Goods Registration Form under the control mode “Finished Products Into & Out of Areas” (code 5100) with the actual names of finished products.

Duty-paid price of value-added processing fee shall be based on the processing fee and bonded material fee occurring inside the control areas; therein, bonded material fee refers to the value of the consumed materials such as finished products, defective products, wastes, by-products, and leftovers.

8. When residual materials are returned out of the control areas, relevant enterprises outside shall submit Import Declaration Form under the control mode “Export Materials for Processing” (code 1427), meanwhile corresponding enterprises inside shall submit Outbound Goods Registration Form under the control mode “Materials Into & Out of Areas” (code 5000).

9. In order to use the bonded materials placed inside the control areas, relevant enterprises inside shall submit Inbound Goods Registration Form under the control mode “Materials Into & Out of Areas” (code 5000) and submit relevant accounts to the Customs for addition; regarding the bonded materials inside that are already consumed in processing, relevant enterprises inside shall submit Outbound Goods Registration Form under the control mode “Materials Into & Out of Areas” (code 5000) and submit relevant accounts to the Customs for deletion.

10. When declaring domestic entry to or exit from the control areas, enterprises shall fill in the “Transport Means” column in Import/Export Declaration Form and Inbound/Outbound Goods Registration Form as per GACC Announcement No. 20 of 2016.

11. The processing-made leftovers, defective products, wastes and by-products shall be transited out of the control areas. Solid wastes resulting from bonded materials shall be subject to China’s “Administrative Measures on Import of Solid Wastes” for their exit from the control areas.

12. The enterprises inside the control areas shall, upon electronic original account and declaration data, regularly undertake their account write-offs with local Customs authority.

This Announcement shall enter into force upon its issuance.




General Administration of Customs of China (GACC)
November 25, 2016