Article 1 All institutions and individuals producing consumer goods, or processing consumer goods on consignments or importing consumer goods (hereinafter referred to as "taxable consumer goods") shall be liable to consumption tax (hereinafter referred to as "taxpayers") and shall pay consumption tax in accordance with these Regulations.

Article 2 Taxable items and rates (tax amount) of consumption tax shall be enforced in accordance with the "Table of Taxable Items and Rates (Tax Amounts) of Consumption Tax" attached to these Regulations, and readjustments thereof shall be determined by the State Council.

Article 3 A taxpayer simultaneously dealing in consumer goods taxable at different rates shall make separate assessments of the volume and quantity of the sales of different consumer goods taxable at different rates. If no such separate assessments are made or if different taxable consumer goods taxable at different tax rates are marketed in packages, the highest rate shall apply.

Article 4 A taxpayer shall pay tax while marketing the taxable consumer goods he makes. A taxpayer shall pay no consumption tax on the taxable consumer goods he produces for use in continued production of taxable consumer goods and shall pay consumption tax on taxable consumer goods to be used for other uses and pay tax at the time of delivery thereof.

Consumption tax on taxable consumer goods processed on consignment shall be withheld from the consigner and paid to the state by the consignee at the time of delivery. The consumption tax already paid on the processed consumer goods on consignment to be used in continued production shall be deducted in accordance with relevant regulations.

Consumption tax on imported taxable consumer goods shall be paid at the time of customs declaration.

Article 5 Consumption tax shall be assessed under the rate on value method or the amount on volume method. The formula for assessing the tax amount is:

The amount of tax under the rate on value method = volumes of sales X tax rate

The amount of tax under the amount on volume method = volume of sales X unit tax amount

Consumption tax shall be levied on taxable consumer goods sold by a taxpayer in a foreign currency on the basis of the volume of the sales converted into RMB at the official exchange rate.

Article 6 The volume of sales prescribed in Article 5 of these Regulations includes all of the sales proceeds and other charges the taxpayer receives from the buyer of the taxable consumer goods.

Article 7 A taxpayer shall pay consumption tax on the taxable consumer goods it produces for its own use which are taxable in accordance with the provisions of Clause 1, Article 4 of these Regulations, the tax to be computed on the basis of the price of the consumer goods of the same kind the taxpayer produces for sale, or, if there is no marketing price thereof, to be computed on the basis of taxable composite price. The formula of computing taxable price is:

The taxable composite price = (cost + profit) ÷ (1 - consumption tax rate)

Article 8 Consumption tax on the taxable consumer goods processed on consignment shall be computed on the basis of marketing price of the consumer goods of the same category of the consignee, and if there is no such marketing price, to be computed on the basis of the composition of the marketing price thereof. The formula for the composite taxable price is:

Composite price for taxable goods = (Costs of materials + processing fees) ÷ (1 - rate of consumption tax)