Flow Process for Customs Declaration Formalities for Processing with Imported Ma

Flow Process for Customs Declaration Formalities for Processing with Imported Materials

June 25, 2008 14:48:06, Source: Qnr.cn, Author: Qnr.cn

(1) In case of actual import and export of goods processed with imported materials, the following documents shall be submitted to the customs for the import and export declaration: ① Import and export goods customs declaration form (pink, in quadruplicate); ② Registration manual; ③ Goods shipping document, invoice and packing list; ④ Other documents deemed as necessary by the customs.

(2) Accept inspection.

(3) Go through tax collection and exemption formalities.

(4) Customs supervision and control on processing with imported materials. For import and export goods processed with imported materials, the customs shall supervise and control as per the following provisions in light of differentiated conditions:

① Bonded factory and materials bonded warehouse. Factories, workshops or operating units specialized in processing exported products in the enterprises where the processing unit belongs to have their specialized warehouse for storage of imported materials and parts and processed products, and establish specialized accounts and special person management system, and if conditions are available for strict supervision of the customs, the customs may approve their establishment of bonded factory or materials processing bonded warehouse, of which the materials import is firstly bonded, and after processing, the imported materials and parts consumed for actual export are exempted from tax, but taxes will be levied on those consumed for non-export. 

② Counter-purchase contact. With regard to the inward processing under counter-purchase-contracts (including the counter-purchase-contracts with different clients) concerning import of materials and export of finished products, the imported materials and parts shall be placed in bond, and finished products obtained therefrom for export shall be exempted from duties and taxes.

③ Tax collection by proportion. For imported materials and pieces not meeting the conditions for processing with imported materials in the said items ① and ②, the customs grants partial tax exemption in accordance with the Table of Scales for Exemptions from Import Duties and Taxes on Imported Materials under Inward Processing, 85% or 95% of the imports are duty free as they would be re-exported, and 15% of 5% of the imports are dutiable as they would not be re-exported. In case the non-exported parts exceed or are less than the proportion to levy taxes, relevant taxes shall be made up or refunded after the customs examines the same and confirms to be true and correct.

④ Full tax collection and tax refund. In case processing firms and producers have been found to act contrary to the Customs rules and regulations, import duties and taxes shall be levied on the imported materials and parts at the time of importation. And some of the taxes shall be refunded according to the imported materials and parts actually used up in the production at the time of re-exportation of finished products after processing.

⑤ The customs shall grant tax exemption to a small number of imported auxiliary materials and packaging materials necessary for the commodities processed with imported materials to re-export, and small consumable production tools such as slotting tools and tagging gun in reasonable numbers and directly used in clothing production workshops, which are provided by foreign customers free of charge or at certain prices. To simplify the procedures, the customs shall handle the tax exemption registration procedures for the foregoing materials based on the copies of the signed contracts, and no Registration Manual will be issued.

⑥ For imported materials and parts under the item of processing with imported materials, the finished products shall be re-exported within 1 year upon the date of import. If, under special circumstances, there is a need to extend the time limit, an application shall be filed with the Customs for an extension, which shall in no way exceed one year. In the event that the goods are not re-exported within the extended time limit, the Customs shall handle the import formalities for general trade.

⑦ In case any change, transfer, suspension, extension or cancellation occur to the contract already registered and filed with the customs, the processing unit shall handle the change or cancellation formalities truthfully to the local customs before import of materials and parts.

⑧ If the raw materials, auxiliary materials and other materials provided by foreign customers free of charge or at a certain price as specified in the export contract are left surplus upon processing into finished products, with the application made by the operating unit and consent by the customs, the surpluses can be transferred into other export contracts for further processing and export, or otherwise if sold on domestic market, the customs duty and import taxes shall be made up in time.

⑨ The finished products under the item of processing with imported materials are principally not suitable for export in the mode of barter trade. In the event that the products are sold to CIS and East European countries by barter trade due to inability to export as planned, the relevant foreign trade company is required to report to the competent authority for foreign economy and trade, and the competent authority for foreign economy and trade needs to report to the relevant department of MOFTEC, and then the customs examine and release the products based on the approval documents of the department.   

⑩The finished products under the items of processing with imported materials shall be shipped and exported out of the territory upon conclusion of transaction with external units and settlement of exchange, and foreign traders are not permitted to entrust processing enterprises or foreign trade operating units within the territory of China to ship the finished products directly from inside the territory to CIS and East European countries.  

⑾ The imported materials and parts exempted from taxes under the contract for processing with imported materials must strictly follow the principle of Specified Materials for Specified Use, and may not exchanged for use with domestic materials and parts. In the event that the raw materials of the same variety, same specification and same quantity are used in replacement of imported materials for urgent need of processing finished products for export under special circumstances and there is no problem with disposal gain and earning differential price, such circumstance shall be reported to the local customs for review and approval in advance
    ⑿ The customs has made the following stipulations on processing with imported materials for non-ferrous metal, ferrous metal and cotton spinning industries when imported materials and parts must be exchanged with other domestic materials and parts due to production technology:  

Firstly, for the internal exchange of technology materials and parts, the operating unit shall report to the local customs for review and approval, and meet the conditions for supervision and control of bonded factory;

Secondly, the factory shall perfect its management system, and establish accounts, record material input and output for future reference as required by the customs. Export and then import or domestic acquisitions of products for export without processing are prohibited. Resale of imported materials and parts is not permitted. 

Thirdly, for the portion of export products processed in collaboration with domestic raw materials among the exported finished products, the portion of products due to be levied with export tax can be exempted from taxes.

Fourthly, for export products processed with imported materials, the export enterprise must, before applying to the customs for tax exemption for importing materials, hold the approval document from the competent department for foreign economy and trade and submit to the competent authority for export tax refund for reviewing and stamping, and keep the copy of approval document for future reference. For export of products, the enterprise shall additionally complete a Special Customs Declaration Form for Export Tax Refund of Goods. For products applied for export by export enterprise but actually not leaving the territory, tax refund is not handled
Fifthly, when gold and silver needs to be imported, the enterprise engaged in processing gold and silver products with imported materials shall submit the approval documents from PBOC headquarters or its authorized branch to the customs, or otherwise the customs will not release the same.

Sixthly, according to stipulations of MOFTEC, the processing of the following commodities with imported materials shall be subject to review and approval of MOFTEC, and the customs shall go through the registration and filing formalities based on the MOFTEC approval documents and other documents;

a. Commodities banned for export

b. Chemicals for both military and civil use

c. Chemicals liable to be turned into poisonous products

d. Heavy water

e. The processing of overseas-supplied sugar needs to be reviewed and approved by MOFTEC, excluding the business for re-export of processed food and grain products with imported white sugar as part of the raw materials.

For re-export of processed food and grain products with imported white sugar (including granulated sugar and soft sugar) as part of the raw materials, and in case of transaction with batch import of 500T or higher or annual import exceeding 1000T, the relevant foreign trade corporation, industry and trade company or local foreign economy and trade commissions shall report to the MOFTEC for review and approval.  

For transaction within the quota, the relevant formalities shall be handled as per original administration measures. The operating unit shall sign the import-export counter-purchase contract, and the processing and re-export period upon import of raw materials may not exceed half a year. 

f. Conduct review and approval management based on the approval documents of MOFTEC for processing transactions of imported materials e.g. copper, copper alloy, sugar, newsprint paper, raw oil (product oil), steel, pig iron, zinc ingot, aluminum and aluminum alloy.