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Tax Policy for destroyed products, waste products, scrap materials complying with provisions of Decree 134/2016/NĐ-CP

09:54 | 21/07/2018

VCN- Facing reflection by some enterprises about different provisions between Decree 134/2016/ND-CP and Circular 39/2018/TT-BTC on Tax policy for destroyed products, waste products, scrap materials of goods that are manufactured for exports, the reporter of Customs Newspaper  discussed with the representative of Tax Policy Division under the Import and Export Duty Department. Accordingly, the representative said that in the short term, enterprises shall comply with provisions of the Law on import and export, and Decree 134/2016/ND-CP.

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Customs operation at Yen Phong Customs Branh, Bac Ninh Customs Department. Photo: T.TR

According to some enterprises, the Law on Import and Export Duty, Decree 134/2016/ND-CP, specifically Clause 2, Article 12 Decree 134/2016/ND-CP stipulates that the basis for determination of eligibility for duty exemption for imported raw materials, supplies and components for export production, the value or quantity of imported raw materials, supplies and components exempt from duty is the actual value or quantity of raw materials, supplies and components used for manufacture of the products that are exported in reality and is determined when making a statement of raw materials, supplies and components imported for manufacture of exports in accordance with Customs law.

This means that only raw materials, supplies and components imported for export production are exempted from import duty. Other items such as waste products, scrap materials, raw materials, supplies, components which are not exported will be subject to import duty, including the destroyed products. This is detailed in Official Document 8127/TCHQ-TXNK dated 13rd December 2017.

As per regulations in Clause 49 Article 1 of Circular 39/2018/TT-BTC, ‘waste products, scrap materials obtained in the process of export production when they are sold or domestically consumed are subject to import duty exemption but must be declared and subject to Value Added Tax, Special Consumption Tax (if any) and Environmental Protection Tax’ (if any).

Hence, enterprises said that there is difference between the two documents. As per Decree 134, when waste products, scrap materials that are domestically consumed or destroyed, will be subject to import duty; but as per Circular 39, they are exempted from import duty. Enterprises said that as per Decree 134 the destroyed redundant raw materials are subject to import duty, why as per Circular 39 when they are domestically sold, are they subject to import duty exemption?

According to the representative of Tax Policy Division under the Import and Export Duty Department, Clause 7 Article 16 of the Law on Import and Export Duty stipulates that imported raw materials, supplies and components for export production are subject to import duty exemption.

According to Article 12, Decree 134/2016/ND-CP, raw materials, supplies, components, semi-finished products and finish products imported for export production shall be exempted from import duty. The basis for determination of eligibility of goods for duty exemption complies with provisions in Clause 2, Article 12 of Decree 134/2016/ND-CP.

tax policy for destroyed products waste products scrap materials complying with provisions of decree 1342016nd cp Tax exemptions under the new Law on export and import Duties

VCN- The Government has issued Decree 134/2016 / ND-CP detailing a number of articles and measures to ...

Under these regulations, goods as raw materials, supplies and components imported for export production but no longer used, which must be destroyed and raw materials, supplies and components imported for export production, which are used to manufacture semi-products and finished products but are damaged and enforced to be destroyed must be declared and subject to import duty.

According to the regulations on the implementation of legal documents, the higher-level documents shall be applied. Therefore, in the short term, enterprises comply with the provisions of the Law on Import and Export Duty, and Decree 134/2016/ND-CP.

Also the representative said that the Import and Export Duty Department realized shortcomings and would propose to amend Decree 134/2016/ND-CP to be in line with reality.

By Thu Trang/Ngoc Loan