01
What is the bonded maintenance policy of a comprehensive bonded zone?
Under the bonded maintenance model of the comprehensive bonded zone (hereinafter referred to as "CBZ"), an enterprise transports the goods with parts damage, functional failures, quality defects and other problems (hereinafter referred to as "goods for maintenance") from an overseas or domestic place outside the CBZ to the CBZ for maintenance in a bonded manner, and then re-transports such goods to the overseas or domestic place outside the CBZ according to their sources.
By providing bonded maintenance and other relevant services, it can help enterprises to integrate the entire industrial chain at a lower cost and form a virtuous circle that production orders drive maintenance orders which in turn promote production orders.
02
What are the advantages of the bonded maintenance policy of a CBZ?
Maintenance is an important part in the industrial chain. Choosing different maintenance methods will directly affect the operating cost and time cost. If the bonded maintenance supervision method of the CBZ is chosen, such goods will have advantages, in terms of cost and time, over the general import goods or import goods for maintenance. The procedure of bonded maintenance import is simple and easy to operate, and it is bonded, without taxation or guarantee. For general import goods, the import duties and the import link taxes levied by the customs on behalf of other authorities are to be paid when the goods are entering the country. For import goods for maintenance, the import duties and the import link taxes levied by the customs on behalf of other authorities are exempted, but a guarantee must be provided to the customs.
03
What are the conditions for providing bonded maintenance services?
(i) The CBZ Administrative Committee (or the administrative agency accredited by the local government) has taken the lead in studying and determining the maintenance supervision program, and the list of relevant programs and enterprises has been submitted to the provincial commerce department, or other departments directly under the customs for the record.
(ii) The enterprise has established a management system and a computer management system that meet the customs supervision requirements, which can track the maintenance consumption and other relevant information throughout the process and make declarations according to the requirements of customs.
(iii) The enterprise can realize computer networking with the customs and carry out data exchange according to customs supervision requirements.
(iv) The enterprise can conduct special management of the maintained goods (including the goods that cannot be repaired after inspection and maintenance, the same below), maintenance materials, damaged parts and components replaced in the maintenance process (hereinafter referred to as "bad parts and old parts"), leftover bits and pieces generated from the maintenance materials in the maintenance process (hereinafter referred to as "leftover bits and pieces"), etc.
04
What bonded maintenance services can be carried out by enterprises?
Enterprises in the CBZ may provide bonded global maintenance services for 55 categories of products such as aerospace, ship, rail transit, construction machinery, CNC machine tools, communication equipment and precision electronics. For details, please refer to the Maintenance Product Catalogue under the Announcement on Supporting Enterprises in the Comprehensive Bonded Zones to Provide Bonded Maintenance Services (Announcement No. 16 [2020] of the Ministry of Commerce, the Ministry of Ecology and Environment and the General Administration of Customs) (hereinafter referred to as "Joint Announcement"). Except as permitted by the laws, administrative regulations, the provisions of the State Council or the provisions made by relevant departments of the State Council in accordance with the authorization of the laws and administrative regulations, no enterprises shall provide bonded maintenance services for any goods whose import and export are prohibited by the state, nor shall they provide any dismantling, scrapping or other services through bonded maintenance.
05
How can the preferential bonded maintenance policy be appropriately applied?
Under the new development pattern of mutual promotion of domestic and international double cycles, enterprises in the CBZ can drive the extension of the industrial value chain through bonded maintenance, promote process improvement and enhance their corporate competitiveness.
The scope of applicable products and processes should be determined reasonably.
The enterprises should make sure that they meet the corresponding conditions: (i) Make sure that the project is a maintenance service rather than re-manufacturing, dismantling or scrapping; (ii) Check whether the goods for maintenance are listed in the Maintenance Product Catalogue under the Joint Announcement, and make sure that bonded maintenance is subject to positive list management and that the services should be provided within the applicable scope; (iii) Make sure that they comply with relevant industry management norms and technical standards.
It should be noted that except as permitted by the laws, administrative regulations, the provisions of the State Council or the provisions made by relevant departments of the State Council in accordance with the authorization of the laws and administrative regulations, no enterprises shall provide the maintenance services for any goods whose import and export are prohibited by the state.
Preferential import and export management tax policy should be applied reasonably.
Enterprises may enjoy the policy of exemption from import duties and import link taxes for infrastructure materials and production equipment at the beginning of establishment and when building the preparation workshop. During the operation of bonded maintenance projects, overseas goods may be bonded in the CBZ, water (including steam), electricity and gas purchased from outside the CBZ and used for production may be subject to a tax refund in the CBZ, and enterprises in the CBZ may be exempted from value-added tax (VAT).
Besides, there is also a general taxpayer qualification pilot tax policy in the comprehensive bonded zone for enterprises to choose from. Enterprises engaged in bonded maintenance services in the comprehensive bonded zone may also choose the general VAT taxpayer qualification pilot program in the customs special supervision zone, and the pilot enterprises will be included in the domestic VAT chain for the input tax deduction, thereby effectively connecting the domestic and international markets.
The core role and position of bonded maintenance should be defined reasonably.
Enterprises can drive the focus on technology, capital and industrial markets through bonded maintenance, and quickly promote the transformation and upgrading of simple and low value-added bonded maintenance to high-tech, high value-added and environment-friendly bonded maintenance. By promoting the coordinated development of surrounding supporting industries, enterprises can drive the development of a regional industrial chain that integrates bonded R&D, precision manufacturing and sales, stimulate the development vitality of the comprehensive bonded zone (CBZ), and effectively improve the influence rate and market share of enterprises and products in the CBZ in the international market.
06
How should bonded maintenance goods be declared?
(1) Goods for maintenance
For goods from overseas, enterprises in the CBZ shall declare the import and export according to the bonded maintenance (1371) provisions.
For goods from a domestic place outside the CBZ, the enterprises outside the CBZ shall declare the goods for maintenance (1300), and the enterprises inside the CBZ shall declare the bonded maintenance (1371). If the maintained goods are to be shipped back to the domestic place outside the CBZ, the maintenance costs incurred from the bonded maintenance services shall be taxed according to the regulations, and the corresponding duty-paid value shall be reviewed and determined based on the costs of the bonded materials consumed and the maintenance costs. The maintained goods and maintenance costs should be filled in separately by commodity items. The number of maintained goods is the actual quantity transported out of the CBZ, and such goods are subject to 100% tax exemption. The number of maintenance cost is 0.1, and it is subject to taxation according to the regulations, and the goods number column is to be filled in according to the code of the maintained goods. The tax rate and exchange rate on the day when the customs accepts the declaration of transportation of the maintained goods back to a domestic place (outside the CBZ) shall apply.
(2) Maintenance materials:
Maintenance materials shall be managed according to the bonded goods, and declaration of entry and exit of the country, entry and exit of the CBZ, carry-over of such materials, etc. shall be made according to the provisions on the supervision method and other matters in the Instructions for Completing the Customs Declaration Forms for the Import and Export of Goods and the Filing List of Entry and Exit Goods in Customs Special Supervision Zones and the Instructions of the Customs of the People's Republic of China for Completing the Customs Declaration Forms for the Import and Export of Goods.
If the materials are imported from overseas, the supervision method is subject to the corresponding import processing (5015) in the CBZ or incoming material processing (5014) in the CBZ. If the materials need to be re-shipped out of the country, the supervision method is subject to the return of imported materials (0664) or the return of incoming materials (0265). If the materials need to be returned overseas for replacement, the supervision method is subject to the return and replacement of imported materials (0700) or the return and replacement of incoming materials (0300). If the materials enter/exit the CBZ from/to a domestic place (outside the CBZ) and are returned or returned for replacement for some reason, the supervision method is subject to the material entry and exit zone (5000).
(3) Disposal of old parts, bad parts and leftover bits and pieces:
In principle, leftover bits and pieces, old parts and bad parts produced or replaced in the maintenance process should be re-shipped out of the country, and the supervision method is subject to the return of imported leftover bits and pieces (0865) or incoming leftover bits and pieces (0864). If such parts and bits and pieces cannot be re-shipped out of the country, they shall not be sold domestically, and shall be disposed of according to the Announcement of the General Administration of Customs on Issues Concerning the Destruction and Disposal of Processing Trade Goods (Announcement No. 33 [2014] of the General Administration of Customs) as well as other relevant regulations.
The leftover bits and pieces, old parts and bad parts produced or replaced in the maintenance process shall be disposed of according to the supervision plan formulated jointly by the CBZ Administrative Committee and other relevant departments. If they are not disposed of according to the supervision plan, the bonded maintenance services shall be terminated.
If the maintenance leftover bits and pieces, old parts and bad parts belong to solid wastes, the enterprises shall handle them according to the relevant provisions of the Administrative Measures for the Import of Solid Wastes (Order No. 12 of the Ministry of Environmental Protection, the Ministry of Commerce, the National Development and Reform Commission, the General Administration of Customs and the General Administration of Quality Supervision, Inspection and Quarantine).
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