Answer the question of the Ha Phong Export Garment Joint Stock Company about the tax treatment of raw materials and auxiliary materials when processing processing contracts. According to the General Department of Customs, surplus scrap and waste products when consumed domestically are exempted from import tax when sold domestically but must be declared and paid for VAT, special consumption tax and environmental protection tax. (If any) to the customs office.
Excess residue in duty free quota for domestic consumption. Illustration
Specify current regulations on tax policy for raw materials, supplies and components imported for processing of export products, the General Department of Customs said that under Clause 6, Article 16 of the Law on Export-Import Tax 107/2016 / QH13 dated 06/4/2016: "Raw materials, supplies and components imported for processing export products, finished products imported for attachment to processed products, processed products" Subject to import tax exemption.
Detailed guidance on this provision, in Clause 4, Article 10 of Decree No. 134/2016 / ND-CP dated September 1, 2004 of the Government, stipulates: "Excess scraps, faulty materials and materials For processing of not more than 3% of the weight of each raw material or material actually imported under the processing contract, they shall be exempt from import tax when selling it domestically, but must declare and pay value added tax and consumption tax. In particular, the environmental protection tax (if any) to the customs office "when declaring customs procedures.
Accordingly, Ha Phong Company should base on the above mentioned provisions, compare with the excess goods to apply appropriate tax policy. In case of any problems, Ha Phong Company is requested to contact the Customs Department where the import and export customs procedures are carried out for specific guidance.
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