Administrative Measures of the Customs of the People's Republic of China for Leftover Materials, Surplus Materials, Defective Products, By-products and Disaster-affected Bonded Goods under Processing Trade (Amended in 2024)
Administrative Measures of the Customs of the People's Republic of China for Leftover Materials, Surplus Materials, Defective Products, By-products and Disaster-affected Bonded Goods under Processing Trade (Amended in 2024)
Administrative Measures of the Customs of the People's Republic of China for Leftover Materials, Surplus Materials, Defective Products, By-products and Disaster-affected Bonded Goods under Processing Trade (Amended in 2024)
Order of the General Administration of Customs No. 273
October 28, 2024
Article 1 In order to normalize the examination and approval of domestic market sales and the customs supervision of the leftover materials, surplus materials, defective products, by-products, damaged bonded goods produced from the bonded imported materials and parts of processing trade, Administrative Measures of the Customs of the People's Republic of China for Leftover Materials, Surplus Materials, Defective Products, By-products and Disaster-affected Bonded Goods under Processing Trade (Revised in November 2018) (hereinafter referred to as the "Measures") are hereby formulated in accordance with the Customs Law of the People's Republic of China (hereinafter referred to as the "Customs Law") and other pertinent laws and administrative regulations.
Article 2 The meanings of the following terms used in the Measures are as follows:
Leftover materials refer to the reasonable quantity of waste, small and leftover materials produced by a trade processing enterprise engaged in the operation of processing for re-export in the course of processing within the unit consumption ratified by customs (hereinafter referred to as the "unit consumption"), which can no longer be used in the processing of the finished exported products under contract.
Surplus materials refer to the remaining imported materials and parts in processing trade of a trade processing enterprise during the operation for processing for re-export, which can be used in the subsequent processing of finished goods.
Defective products refer to the products (including finished and semi-finished products) produced in the operation of processing for re-export by a trade processing enterprise, which have major defects in the production process or fail to meet the requirements of the export contract and cannot be re-exported.
By-products refer to one or more than one other products, produced in the course of processing and production of the finished products (namely the main products) prescribed in the export contract by a trade processing enterprise engaged in the operation of processing for re-export, and not required to be re-exported in the export contract.
Disaster-affected bonded goods refer to the bonded imported materials and parts and finished products that cannot be re-exported due to the loss, lack, or damage caused by force majeure or other justifiable reasons examined and recognized by customs in the operation of processing for re-export by a trade processing enterprise.
Article 3 No enterprise, unit or individual may, without the permission of customs, sell or use for other purposes the leftover materials, surplus materials, defective products, by-products and disaster-affected bonded goods, which are subject to the supervision by customs, produced after the trade processing of bonded imported materials and parts.
Article 4 Where a trade processing enterprise applies to sell the leftover materials in the domestic market,
1. after classifying the status of application for inspection on the leftover materials for domestic sales made by the processing trade enterprise, the competent customs shall, according to the applicable interest rate and the determined price for the leftover materials, calculate and collect tax, and shall exempt the interest for tax delay.
2. after the classification of the status of application for inspection on the leftover materials for domestic sales made by the processing trade enterprise to the customs, if the application is subject to the administration of the import license by the State Development and Reform Commission, the Ministry of Commerce, the Ministry of Ecology and Environment and their authorized departments, the submission of import licenses shall be exempted.
Article 5 Where a trade processing enterprise declares to transfer the surplus materials for use under another trade processing contract, the transfer shall be limited to the same operating enterprise, the same processing enterprise, the same imported materials and parts and the same form of processing trade.
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Order of the General Administration of Customs No. 273
October 28, 2024
Article 1 In order to normalize the examination and approval of domestic market sales and the customs supervision of the leftover materials, surplus materials, defective products, by-products, damaged bonded goods produced from the bonded imported materials and parts of processing trade, Administrative Measures of the Customs of the People's Republic of China for Leftover Materials, Surplus Materials, Defective Products, By-products and Disaster-affected Bonded Goods under Processing Trade (Revised in November 2018) (hereinafter referred to as the "Measures") are hereby formulated in accordance with the Customs Law of the People's Republic of China (hereinafter referred to as the "Customs Law") and other pertinent laws and administrative regulations.
Article 2 The meanings of the following terms used in the Measures are as follows:
Leftover materials refer to the reasonable quantity of waste, small and leftover materials produced by a trade processing enterprise engaged in the operation of processing for re-export in the course of processing within the unit consumption ratified by customs (hereinafter referred to as the "unit consumption"), which can no longer be used in the processing of the finished exported products under contract.
Surplus materials refer to the remaining imported materials and parts in processing trade of a trade processing enterprise during the operation for processing for re-export, which can be used in the subsequent processing of finished goods.
Defective products refer to the products (including finished and semi-finished products) produced in the operation of processing for re-export by a trade processing enterprise, which have major defects in the production process or fail to meet the requirements of the export contract and cannot be re-exported.
By-products refer to one or more than one other products, produced in the course of processing and production of the finished products (namely the main products) prescribed in the export contract by a trade processing enterprise engaged in the operation of processing for re-export, and not required to be re-exported in the export contract.
Disaster-affected bonded goods refer to the bonded imported materials and parts and finished products that cannot be re-exported due to the loss, lack, or damage caused by force majeure or other justifiable reasons examined and recognized by customs in the operation of processing for re-export by a trade processing enterprise.
Article 3 No enterprise, unit or individual may, without the permission of customs, sell or use for other purposes the leftover materials, surplus materials, defective products, by-products and disaster-affected bonded goods, which are subject to the supervision by customs, produced after the trade processing of bonded imported materials and parts.
Article 4 Where a trade processing enterprise applies to sell the leftover materials in the domestic market,
1. after classifying the status of application for inspection on the leftover materials for domestic sales made by the processing trade enterprise, the competent customs shall, according to the applicable interest rate and the determined price for the leftover materials, calculate and collect tax, and shall exempt the interest for tax delay.
2. after the classification of the status of application for inspection on the leftover materials for domestic sales made by the processing trade enterprise to the customs, if the application is subject to the administration of the import license by the State Development and Reform Commission, the Ministry of Commerce, the Ministry of Ecology and Environment and their authorized departments, the submission of import licenses shall be exempted.
Article 5 Where a trade processing enterprise declares to transfer the surplus materials for use under another trade processing contract, the transfer shall be limited to the same operating enterprise, the same processing enterprise, the same imported materials and parts and the same form of processing trade.
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