Regulations Governing the Offsetting or Refund of Duties and Taxes on Raw Materials for Export Products Article 11

Where the FOB price of an exported product is below the CIF price of raw materials used in that product, customs duties and commodity taxes on such raw materials shall be refunded in accordance with the ratio of the FOB price to the CIF price. However, under any of the following circumstances, the duties and taxes on the raw materials used may be offset or refunded in accordance with the provisions of the preceding Article:1. Where the FOB price of an exported product is not below the CIF price of the raw materials used within three months prior to the date of customs release of the said exported product.2. Where it is certified by the authority in charge of trading that an addition of the income from other sales price(s) has made the actual FOB price higher than the CIF price of the raw materials used.3. Where, owing to defects found in the exported product(s) of a previous shipment, an agreement has been reached between the buyer and the seller either to sell similar product(s) in a subsequent export shipment at a lower (discount) price or to deduct the selling price of the defective product(s) from the FOB price of the current shipment, whereby the FOB price of the current shipment becomes lower than the CIF price of the raw materials used therein, and special approval has been granted by the authority in charge of trading.Where exported products are processed domestically with semi-finished or finished products from abroad and such products are determined Customs values under the provisions of Articles 29 to 35 of the Customs Act, the duties and taxes on semi-finished or finished products used may be offset or refunded in accordance with the provisions of the preceding Article.