Apply Decree 134 if the provisions are not consistent with Circular 38

The handling of scrap, waste products and excess supplies of raw materials for processing imports is comply with the provisions in Decree 134/2016 / ND-CP. Photo: T.Trang

Especially, as some reflections of most enterprises that are having problems with the processing of waste, waste products and imported superfluous raw material for process, in Paragraph 4 of Article 10 of Decree 134/2016 / ND-CP, valided from 1^st September 2016, stipulated that: "Scrap, waste and raw materials, and imported superfluous raw material for processing must not exceed 3% of the total amount of each material and actual imported material under processing contracts are exempted from import duties for domestic consumption. However, they must declare and pay VAT, special consumption tax, and environmental protection tax (if any) to the Customs agency. "

Meanwhile, according to the regulations for enterprises prescribed in Clause 5, Article 64 of Circular 38/2015 / TT-BTC: "For raw materials, imported superfluous raw material for processing and not more than 3% of all materials and actual imported material, when selling for domestic consumption, don’t need Customs procedures for conversion purposes for use. However, they must declare and pay tax to the local tax agency under the provisions of the tax law ".

According to this regulation, enterprises are very confused because they don’t know which document they should follow. In fact, two documents are valid at the same time but the guidance is different. According to Circular 38, companies have to declare tax with local tax agencies. In contrast, Decree 134 stipulates that the enterprise must declare and pay the tax to the Customs agencies.

In response to this issue, at the press conference introducing export tax law, import duty 107 by The Ministry of Finance held on 5^th October, Ms. Dao Thu Huong, Deputy Director of Export-Import Tax (General Department of Customs ) said the Decree is legally above Circular, so, in this case the companies comply with the provisions of Decree 134.

Besides that , Customs Newspaper’s correspondant had a discussion with the representative of Customs Control and Supervision Department. In this case, companies will do new declarations and declarations by following type of "transfer domestic consumption" in order to pay VAT and special consumption tax and environmental protection (if any) to Customs agencies.

However, the representative also said that if the companies have difficulties, they need to send documents to the Customs agencies for review and guidance in a specific way depending on each case.