Laws of the People's Republic of China
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PROVISIONS OF THE MINISTRY
OF FINANCE AND THE CUSTOMS GENERAL ADMINISTRATION
FOR THE COLLECTION AND REFUND OF PRODUCT TAX AND
VALUE ADDED TAX ON IMPORT AND EXPORT PRODUCTS
(Issued on April 17, 1985)
ISSUING-DEPT: MINISTRY OF FINANCE
LENGTH: 1135 words
The Report on the Collection and Refund of Product Tax and Value Added Tax on Import and Export Products by the Ministry of Finance and Provisions of the Ministry of Finance for the Collection and Refund of Product Tax and Value Added Tax on Import and Export Products (hereinafter referred to as the Provisions), both of which were approved by the State Council and contained in the No. 43 document (State Council document 1985), came into force on April 1, 1985. The following supplementary provisions are formulated so as to deal with some matters brought about during the implementation of the Provisions:
[Article 1] Provisions for the collection of tax on imports and refund (or exemption) of tax on exports apply only to import and export products which have been through customs entry and customs clearance.
[Article 2] That "Cereals, raw sugar, chemical fertilizer and agricultural chemicals imported with approval by the state are exempt from product tax", which is stipulated in Article 2 of the Provisions, refers to cereals, raw sugar, chemical fertilizer and agricultural chemicals listed in the import plan laid down by the State Planning Commission. Therefore, when foreign trade enterprises import these products, they must show the related documents approved by the State Planning Commission to the customs, against which the latter shall release these products duty free.
[Article 3] The following specific duty-free proportions are applicable to raw materials and spare parts imported exclusively for the manufacture of export products.
(1) The 13 products below are 95% duty-free:
a. Various tawed furs;b. Various leather skins;c. Various synthetic leather and artificial leather;d. Ivory;e. Pearls;f. Various jade, precious stones, diamond and semi-finished jade, precious stones, and diamond;g. Hawksbill turtle, coral and amber;h. Wool tops and woll yarn;j. Cotton cloth with a width of 64" and above;k. Cotton polyester cloth with a width of 64" and above;I. Garment fabrics made of pure wool, pure cotton, polyester and blend fibers; linings and artificial furs;m. Spare parts of various machinery and electric products;n. Ready-made packing wares.
(2) Other raw materials and spare parts are 85% daty-free.
[Article 4] Those provisions formulated by the State Council or the Ministry of Finance in the past for the reduction and exemption of tax on certain import products as special cases shall be implemented continuously until termination of these provisions.
[Article 5] Where spare parts are imported or exported in complete sets, product tax or value added tax shall be levied or refunded on these parts pursuant to appropriate rates applicable to complete machines.
[Article 6] When export enterprises or enterprises deputizing for export declare their products to the customs for export, they shall fill in Certificates of Export Product, in addition to customs clearance forms. Once products are exported, the customs shall affix their signature on the Certificate of Export Products, which serves as a voucher for tax refund or exemption.
The Customs shall charge export enterprises or enterprises deputizing for export 10 yuan (Renminbi) as certificate fee for each Certificate of Export Product issued.
[Article 7] When industrial enterprises directly export products which are subject to the collection of value added tax and assess their tax-exempt amount of value added tax and refundable amount of tax under "deduction items", they can adopt a "first-collection-then-refund" method in that export products shall firstly be levied as if they were products for domestic sale and then be refunded, once exported, in such a manner that the refundable amount shall be the total amount of export product multiplied by rates of value added tax.
[Article 8] It is quite difficult to ascertain which column of tax rate was applied at the factory to some export products with multi-column rates such as cigarettes, alcoholic drinks, cement and nitrogenous fertilizer, etc. once they are exported. Therefore, in order to simplify formalities and take into account both the state policy of encouraging exportation and the actual export situation of these four products, the following rates shall be applied for refunding tax on afore-mentioned products:
Cigarettes (60%): alcoholic drinks (30%); beer (20%); cement (10%); and nitrogenous fertilizer (5%).
[Article 9] With regard to the following textile products exported by foreign trade enterprises, tax shall be refunded based on rates applicable to products which are manufactured on a consecutive basis:
Artificial furs; other woolen textiles; silks and satins; other machine-made silk knit goods; pure linen cloth; fabrics of wool, pure linen and knitted silk; knitted tube-shaped cloth, thin knitted cloth and other knitwears; and textiles replicas.
[Article 10] That "export products sold by industrial enterprises to foreign trade enterprises or other enterprises are not eligible for reduction and exemption of product tax or value added tax . . .", which is contained in Article 13 of the Provisions, also provides that the taxable amount of product tax and value added tax on export products shall not be reduced or exempted for the purpose of returning loans.
[Article 11] Provisions for reduction of tax on export cosmetics, fireworks, incinerating products, and aluminum zips previously approved by the Ministry of Finance shall be implemented until December 31, 1985. Such being the case, as long as the above-mentioned four products are exported within this year, tax refund matters shall be handled on the principle that tax shall be refunded with the same amount of tax collected. Beginning on January 1, 1986, the aforementioned four products shall be levied according to appropriate rates listed under tax rate classification schedules of product tax. Once these products are exported, tax shall be refunded pursuant to the rates prescribed.
[Article 12] Certificates of Export Product (forms are herein omitted) shall be exclusively printed by the Customs General Administration, while Application Forms for Refund (or exemption) of Taxes on Export Product (forms are herein omitted) shall be printed by tax bureau under provinces, autonomous regions and municipalities directly under the State Council. Before Certificates of Export Product and Application Forms for Refund (or exemption) of Taxes on Export Product are uniformly printed and distributed, self-printed certificates or application forms pursuant to prescribed uniform forms can be used where export enterprises require customs clearnce and tax refund on export products.