I. Definition
"Unit consumption" means the materials quantity consumed for processing unit finished product by a processing trade enterprise under the normal processing conditions. Unit consumption includes net consumption and technique consumption.
Net consumption means the quantity of the materials that exist in or are converted into the unit finished product through physical change or chemical reaction after being processed;
Technique consumption means, excluding net consumption, the quantity of the materials that must be consumed in the normal processing course but may not exist in or be converted into the finished product because of processing technique, and includes tangible consumption and intangible consumption. Technique consumption rate means the proportion of technique consumption to the consumed materials.
Unit consumption = Net consumption / (1 – Technique consumption rate);
II. Administration principles for unit consumption of processing trade
The administration of unit consumption shall abide by the general principles of “truthfully declaring and truly verifying and cancelling”, that means a processing trade enterprise must declare the actual unit consumption of its finished products according to the facts and the customs shall verify and cancel according to the unit consumption declared by the enterprise or verified by the customs.
III. Declaration of unit consumption
Declaration of unit consumption means the act that processing trade enterprises report unit consumption to the customs and that processing trade enterprises declare the unit consumption to the customs according to the actual processing and production. Unit consumption data shall be true and accurate and is important for the customs for approval and handling of unit consumption declared by the enterprises.
Normal case: Before a finished product is exported, transferred for further processing or sold in domestic market, a processing trade enterprise shall truthfully declare its unit consumption to the customs. A processing trade enterprise shall declare the following contents for its unit consumption:
(I) Name, serial number, unit, specification, mode and quality of the materials and finished products under the processing trade;
(II) Unit consumption for the finished products under the processing trade;
(III) In case a same kind of materials for processing trade is composed of both bonded and non-bonded ones, the proportion, name, unit, specification, mode and quality of the non-bonded materials shall be declared.
Special case: In case a processing trade enterprise fails to declare its consumption on schedule by virtue of justified reasons, it shall retain the sample of a finished product and the related documents and file an application in written form before the export, transfer for further processing and domestic sale of the finished product, and the processing trade enterprise may, upon the approval of the competent local supervisory customs, declare its unit consumption before reporting for verification and cancellation.
A processing trade enterprise may apply to the customs for conducting the formalities for changing or revoking the unit consumption, unless:
(I) export declaration for the bonded finished product has been made;
(II) transfer for further processing of the bonded finished product has been made;
(III) domestic sale of the bonded finished product has been applied;
(IV) the Customs has verified the unit consumption; or
(V) the processing trade enterprise has been put on record by the customs for investigation.
IV. Query and consultations concerning unit consumption
In case the Customs is in doubt of the authenticity or accuracy of the unit consumption declared by a processing trade enterprise, it shall formulate and issue the Notice of the Customs of the People's Republic of China on the Query of Unit Consumption in Processing Trade (hereinafter referred to as Notice on the Query of Unit Consumption, see Appendix for its format) to notify the reasons for query to the legal representative or agent of the processing trade enterprise.
The legal representative or agent of the processing trade enterprise shall provide the related written materials to the customs within 10 working days as of the acceptance of the Notice on the Query of Unit Consumption.
In case a processing trade enterprise fails to provide the related materials within the time limit specified by the customs, the provided materials are insufficient or it is impossible to determine the unit consumption with the provided materials, the customs shall check and determine the unit consumption.
V. Recheck of unit consumption
In case any processing trade enterprise has any objection to the verification results of its unit consumption, it may file an application in written form for recheck to the superior customs.
In case of any objection to the verification results made by the local subordinate customs, a recheck application can be filed in writing to the customs directly under the GACC within five working days after receipt of the verification results; and in case of any objection to the results of the customs directly under the GACC, a recheck application can be filed in writing to the GACC within five working days after receipt of the results. The customs which accept the recheck application shall make recheck decisions within 45 days after receipt of the recheck application and inform the enterprise of the recheck results in writing.
VI. Standards for unit consumption
Standards for unit consumption means the norms on the materials quantity consumed by unit finished product, which are for general purpose or may be used repeatedly. A maximum upper value shall be set for the standards for unit consumption and a minimum lower value shall be set for the standards for the unit consumption of the export taxable finished products in addition.
For the commodities with unit consumption standard for processing trade, enterprises must truthfully declare their unit consumption. If the unit consumption declared by an processing trade enterprises is within the unit consumption standard, the customs shall verify and cancel the bonded materials consumed in accordance with the actual unit consumption declared by the enterprise; and if the consumption of bonded materials in unit finished produced declared (unit consumption x proportion of bonded materials) exceeds the standard limit, the customs shall, on the basis of the maximum upper value or minimum lower value of the unit consumption standards, verify and cancel the bonded materials. The excess shall not be bonded, and companies can carry out processing trade by ways of general trade imports, domestic procurement of part of materials, etc.
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List of issued unit consumption standards |
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October 30, 2007 |
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