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Operations at Hon Gai port border gate Customs Branch. Photo: ST

The General Department of Customs received Proposal No. 2345/UBND-XD2 of the People’s Committee of QuangNinh for import duty exemption on imported 22kVsubmarine cables (threecores 3x240mm2 with 24 integrated optical fibers) insulated by Ethylene Propylene Rubber (EPR) to construct biding package No. 5 of phase two (EPC bidding package on designing drawings for construction of 22kV submarine cables) of the investment project for electricity supply for Tran Island in Co To District and CaiChien Island in Hai Ha District, QuangNinh Province, an investment project in areas with extremely difficult socio-economic conditions.

Clause 11, Article 16 of the Law on Export and Import Duties No. 107/2016 / QH13 and Article 14 of Decree 134/2016 / ND-CP of the Government stipulate the import duty exemption for import goods to create fixed assets for investment incentive projects, in which there are "Construction materials that cannot be domestically produced". The basis for identification of construction materials that cannot be domestically produced comply with the Ministry of Planning and Investment's regulations.

Pursuant to ordinal number 15, Appendix 2 issued together with the Government's Decree 108/2006 / ND-CP dated September 22, 2006, the districts of Ba Che, Binh Lieu, Co To island district and islands and isles in QuangNinh province are areas with extremely difficult socio-economic conditions.

Imported goods to create fixed assets for the investment project for national electricity supply for Tran Island in Co To District and CaiChien Island in Hai Ha District, QuangNinh Province are exempt from import duties. Of which, there are construction materials that cannot be produced domestically.

The General Department of Customs noted that the list of construction materials that can be domestically produced in Appendix 3 enclosed with Circular 01/2018 / TT-BKHDT of the Ministry of Planning and Investmentdoes not specify whether 22kV submarine cable products insulated by EPR can be domestically produced or not. No. 110, Appendix 3 issued together with Circular 01/2018 / TT-BKHDT only specifies that concealed cables - maximum voltage of 220 kV, copper core, XLPE-insulated cable, corrugated aluminum sheeting and external PVC (or HDPE) sheathing, with temperature monitoring optic fibres inside cables.

Therefore, to deal with problems in the process of import duty exemption for import goods serving investment incentive projects, the General Department of Customs requested the Ministry of Planning and Investment comment on whether the 22kV EPR insulated submarine cables be produced domestically.

After receiving the request, the Ministry of Planning and Investment issued Official Letter No. 3374 / BKHDT-KTCN. In which, the Ministry of Planning and Investment said the 22kV submarine cable product (three cores 3x240mm2 with 24 integrated optical fibres) insulated by EPR have not been produced in Vietnam and are not included in the list of domestically produced goods attached with Circular 01/2018 / TT-BKHDT. Accordingly, this imported item to create fixed assets for the project of national electricity supply for Tran Island in Co To district and Cai Chien island in Hai Ha district, Quang Ninh province is exempt from import tax in accordance with the Law on Export and Import Duties No. 107/2016/QH13 and Government’s Decree No. 134/2016/ND-CP ò the Government.

The General Department of Customs also received a proposal from the Ministry of Agriculture and Rural Development on considering applying import tax exemption for imported corn grains and soybeans as raw materials for animal and aquaculture feed.

The General Department of Customs said that Clause 13 Article 16 of the Law on Export and Import Duties No. 107/2016 / QH13 states: “Raw materials and components which cannot be domestically manufactured and are imported serving manufacturing of investment projects eligible for investment incentives or in an extremely disadvantaged area prescribed by regulations of law on investment, high technology enterprises, science and technology enterprises, science and technology organisations are exempt from import duties for five years from the commencement of manufacture. The exemption of import duties specified in this clause does not apply to mineral extraction projects; projects for manufacture of products where total value of natural resources or minerals plus energy costs makes up at least 51% of the product price; projects for manufacture or the sale of goods/services subject to special excise tax.”

Clause 1, Article 15 of Decree 134/2016 / ND-CP stipulates: “Raw materials, supplies and components that cannot be domestically manufactured and are imported for manufacturing activities of investment projects eligible for special investment incentives or in an extremely disadvantaged area described by investment laws, high-tech enterprises, science and technology enterprises and science and technology organisations are exempt from import duties for fiveyears from the commencement date of manufacture as prescribed in Clause 13 Article 16 of the Law on Export and import duties. Also, Clause 3 of Article 15 of Decree 134/2016 / ND-CP stipulatesthe basis for identification of raw materials, supplies and components that cannot be produced domestically, comply with regulations of the Ministry of Planning and Investment.

Pursuant to provisions of Clause 1, Article 40 of Decree No. 134/2016 / ND-CP“The Ministry of Planning and Investment will publish a list of goods that can be manufactured domestically as a basis for the determination of goods that cannot be manufactured domestically as mentioned in Article 14 , 15, 16, 17, 18, 19, 20, 21, 23, 24, 25 and 28 of this decree.

At ordinal number 8 and number 9 Appendix 4 enclosed with Circular 01/2018 / TT-BKHDT of the Ministry of Planning and Investment promulgating the List of machinery, spare parts and specialised vehicles, raw materials, supplies, accessories, semi-finished products which can be produced domestically, raw soybean oil (HS code 1507.10.00), refined soybean oil (HS code 15079090) are on the list of items of raw materials, supplies, components and spare parts that can be produced domestically.

Per Official Letter No. 1422 / BKH-KTCN dated March 8, 2010 and Official Letter No. 3632 / BKHDT-KTCN dated May 31, 2019 of the Ministry of Planning and Investment guide, "corn grain" is an item that can be produced domestically since March 8, 2010 (when the Ministry of Planning and Investment issued official dispatch No. 1422 / BKH-KTCN). The documents stipulate import tax exemption for five years from the date of commencement of production for raw materials, supplies and components that cannot be produced domestically and are imported for the production of investment projects eligible for investment incentives or in areas in extremely difficult socio-economic conditions according to the law on investment, high-tech enterprises, science and technology enterprises, science and technology organizstions when the imported goods are not on the list of goods that can be produced domestically according to the regulations of the Ministry of Planning and Investment, and do not stipulate import tax exemptions for goods in the list of goods that can be produced domestically but do not serve domestic production needs.

When were manufactured and assembled automobiles domestically eligible for registration fee reductions?

Therefore, the General Department of Customs requested the Ministry of Agriculture and Rural Development comply with the provisions on import and export tax policies in the Law on Export and Import Duties No. 107/2016 / QH13, Decree No. 134/2016 / ND-CP and guiding documents. For problems on criteria, annual average output, production scale and quality of goods that can be produced domestically, the Ministry of Agriculture and Rural Development was asked to work with the Ministry of Planning and Investment and other related agencies.