Import Duty Exemption on Machinery & Equipment and Raw Materials - - PowerPoint PPT Presentation

Import Duty Exemption on Machinery & Equipment and Raw Materials / Components

DATE : 26 SEPTEMBER 2016 (MONDAY) VENUE : PERDANA HALL, LEVEL 10, MIDA

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Types of Application for Import Duty Exemption Self-Declaration Mechanism for Import Duty Exemption on Machinery & Equipment (SPM1/2015) Import Duty Exemption for Raw Materials & Components (PC2) Common Mistakes by Applicant Spare Parts & Consumables

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Scope Of Exemption Eligible Applicant Form To Be Submitted

Import duty exemption on machinery and equipment excluding spare parts and consumables Exemption to be claimed through the Customs Duties (Exemption) Order 2013 Manufacturer in Principal Customs Area Application to obtain the confirmation letter as a manufacturer must be submitted online using the form SPM 1/2015 - Manufacturer in PCA Import duty exemption on raw materials and components used directly in the manufacture of finished product(s) Manufacturer in Principal Customs Area Application must be submitted to MIDA using the form PC2/PC2A (New and Extension) and PC2-1 (Additional Quantity)

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SPM1/2015

Improve business efficiency  Confirmation letter issued once by MIDA valid until 31/12/2017  Permission to claim the exemption can be obtained within a period of two (2) weeks from Customs No necessity to use the bank guarantee facilities for the clearance of goods No necessity to redeem the bank guarantee No additional costs incurred Self-declaration and self-regulated

have enjoyed the facilitation up to 15 September 2016

WHY SELF- DECLARATION MECHANISM??

Scope of Exemption & Criteria to Qualify for the Exemption

Eligible Sectors Scope of Exemption Customs Duties (Exemption) Order 2013 Qualifying Criteria

Manufacturers in Principal Customs Area (PCA) Import duty exemption on machinery and equipment excluding spare parts and consumables imported

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purchased from a Licensed Manufacturing Warehouse (LMW), Bonded Warehouse

• r Free Zone (FZ)

Under item 115 The machinery and equipment, must be new, unused and directly used in the manufacturing process of the finished product(s) at the approved manufacturers’ premise(s)

Procedure To Claim Exemption Under The Customs Duties (Exemption) Order 2013

STEP 1 : APPLICANT  Submit the following form online via https://jpc.online.mida.gov.my to obtain the confirmation letter from MIDA:

• SPM 1/2015 - Manufacturer in PCA

STEP 2 : MIDA  Accept complete application form and supporting documents  Issuance of the confirmation letter via online STEP 3 : APPLICANT  View and download the confirmation letter via https://jpc.online.mida.gov.my/midawebpki/checkStatus.jsp  Provide complete information on the machinery and equipment to be imported in Appendix I, downloaded via http://www.customs.gov.my.  Submit the following documents to the State Customs Control Station (Industrial Section) to obtain the permission to import the machinery and equipment:

• Company’s covering letter
• Confirmation letter issued by MIDA
• Appendix I (hard copy and soft copy)

STEP 4 : STATE CUSTOMS CONTROL STATION (INDUSTRIAL SECTION)  Accept complete Appendix I and supporting documents  Verify the confirmation letter issued by MIDA and other company’s document via https://jpc.online.mida.gov.my/SMPCMIDA  Issuance of the permission letter for the importation of the machinery and equipment STEP 5 : APPLICANT  Submit the permission letter to the Customs Import/Export and Border Control Branch for the clearance of goods  Notify MIDA and the related State Customs Control Station (Industrial Section) when a company ceases operation or winds up

Form, Letters & Appendices

Customs Permission Letter

Appendix B

Confirmation Letter

Appendix A Appendix I

SPM1 Form

Documents To Be Submitted For SPM1/2015

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Documents To Be Submitted For SPM1/2015

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Import Duty Exemption for Raw Materials & Components (PC2)

Year 2014 2015 2016 (Jan- Sept) Total Applications Received from Plastics and Mould & Die Industries 224 229 149 602

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Scope of Exemption Qualifying Criteria Import duty exemption on raw materials / components  Directly used in the manufacturing activity(s) at the approved premise(s) and subject to local availability  Total duty exemption applied & forgone : > RM5,000 (subject to changes)  Application must be submitted before the materials are imported

Type of Application New / Extension Additional Quantity Appeal Post Approval (Amendments on Approval) Current Form PC2 PC2-1 Company’s letter with justification & supporting documents Company’s letter with justification & supporting documents Mode of Submission

• Online
• Physical (Courier/By

hand)

• Physical (Courier / By hand)

Forms To be Submitted

Guideline & Procedures for Application

1 Import duty exemption on raw materials and components used directly in the production of finished products and imported directly can be considered for manufacturing companies. 2 As a prerequisite, manufacturing companies are required to register with the Department of Occupational Safety and Health (DOSH) 3 Only applications for total duty exemption of RM5,000.00 and above (per submission) will be considered for exemption. 4 Applications must be submitted before the raw materials or components are imported or purchased. 5 Documents to be submitted: a) Application form b) Manufacturing Licence (ML) or Letter of exemption from ML (ICA10) c) Tax incentive approval under Promotion of Investment Act 1986 (PIA) or Income Tax Act 1967 (if applicable) d) Memorandum and Articles of Association or Business Registration Certificate (new application) e) Other licences/permits/approvals from relevant approving authorities f) A copy of previous approval (extension application) 6 Applications should be submitted using Form PC2/PC2-1/PC2A in two (2) copies. 7 Online applications should be accompanied by scanned copies of documents as in para 5. Signed copies of the application forms should also be submitted to MIDA.

Form, Letters & Appendices Approval Letter

Appendix I Appendix A

PC2 Form / PC2A / PC2-1

Step 1

• Submission of application through online/physical form

Step 2

• Accept complete application and issued acknowledgement letter

Step 3

• Evaluation by the processing officer

Step 4

• Decision made in the JPC2 meeting

Step 5

• Notify company on the decision through email

Applicant MIDA MIDA JPC2 Committee MIDA

Process Workflow

No Common Mistakes for SPM1 Application 1 Incomplete documents:

• Manufacturing Licence (ML)
• Registration Certificate or Letter of Acknowledgement from DOSH
• Latest print out of SSM Company Profile

2 Project Cost / Equity Structure

• Should state the figure instead of percentage

3 Finished products and factory address different from the details stated in the Manufacturing Licence 4 Company did not apply Manufacturing Licence or ICA10 5 ROC is not the same as in the SSM Company Profile

No Common Mistakes for PC2 Application 1 Incomplete attachment for new application

• Manufacturing Licence / ICA10

2 Do not provide a copy of previous approval (for extension application) 3 Incorrect unit of measurement 4 Do not provide information on the previous importation and consumption (for extension application) 5 Maximum capacity is based on the current production 6 Incorrect application form used OR Old application form 7 Declaration page is not complete 8 Illogical input / output ratio

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Malaysian Investment Development Authority (MIDA) Tel : 603-22673539 Fax : 603-22745156 E-mail : tarif@mida.gov.my Website : www.mida.gov.my