Page 191 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Indirect Tax Laws

Notes undergone production, mixing, assembling, or packing and then exported to a foreign port or as
stores for use on board a ship proceeding to a foreign port within one (1) year from the date of
importation.

Eligibility for Duty Drawback

If the exports meet the criteria listed below, the import duty already paid or the guarantee
placed on such imports shall be repaid or returned as drawback to the importer.
1. The drawback on such imports is not prohibited by the Ministerial Regulations.

2. The quantity of the imports used in producing, mixing, assembling, or packing exports is
in accordance with the rules approved or specified by Customs.
3. The goods are exported through a port or place of exit designated for a drawback scheme.

4. The goods are exported within one (1) year from the date of importation of the goods used
in producing, mixing, assembling or packing exported goods. In case where there is a
force majeure event that causes the delay of such exportation, Customs may extend the
aforementioned period by six (6) months.
5. A claim for drawback must be made within six (6) months from the date of exportation of
the goods. However, Customs may extend this time limit on a case by case basis.

Eligible Goods for Duty Drawback

1. Raw materials which are obviously seen in the exports e.g. fabrics, buttons, zippers and
thread in garments, plastic sheeting in plastic products, etc.

2. Raw materials used directly in the manufacturing process and contained in the exports but
not obviously seen e.g. preservatives in canned food, stiffening agents in garments, solvents
for glue in cellophane and anti-rust agents in electronic circuits, etc.
3. Raw materials required in the manufacturing process e.g. sizing materials and bleaching
agents used in textile products, sand paper, scouring powder, varnish, velvet, scouring
agents, chalk, carbon paper and pattern.

Non Eligible Goods for Duty Drawback

1. Machinery, tools, moulds and various appliances e.g. grinding ball for ores, tools and
appliances made from tungsten carbide used in the manufacturing of watches, etc.

2. Fuels for manufacturing e.g. fuel oil, firewood, coal, etc.

Drawback Procedures

1. Request for approval
2. Importation of raw materials
3. Submission of production formula
4. Submission of "right transferred table"

5. Exportation of Goods
6. Claiming for duty drawback
7. Duty payment on raw materials not exported

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