Regulations Governing the Offsetting or Refund of Duties and Taxes on Raw Materials for Export Products Article 9

The criteria for offsetting and/or refund of customs duties and commodity taxes paid on raw materials shall be established by the Ministry of Economic Affairs, either on a special case as basis or on a generally applicable basis, in accordance with the quantity of raw materials required for the normal production of export goods. The criteria established on a special case basis shall be applicable for a period of not more than three years, while the criteria established on a generally applicable basis shall be applicable for a period of not more than five years. Upon expiry of the applicable period of such criteria, factories and/or firms concerned shall apply for reestablishment of such criteria.For the criteria for refund of duties and taxes on raw materials as mentioned in the preceding paragraph, factories or firms engaged in export sales shall, when production begins, compile a "calculation table to show the quantity of raw materials used for manufacture of finished products" and send the same together with the documents relating to export sales and information concerning the quantity of the raw materials used to the Ministry of Economic Affairs for examination and approval. The Ministry of Economic Affairs shall, within 30 days from the date following the day on which those documents were received, determine, approve and publish such criteria, or shall notify the original applicants, factories or firms, of the reason why determination and approval were not granted provided. However, that the said 30 day period may be extended as necessary, but in no event shall the extension be longer than 30 days.Where verification of the quantity of raw material consumption can not be made on account of the fact that the raw materials used for export goods are of trifling quantities or that the application for determination and approval of the criteria for refund of duties and taxes on raw materials is filed after the exportation of the products involved, establishment of the criteria for offsetting or refund of duties and taxes on such raw materials or inclusion of such raw materials in other relevant criteria may be omitted.After the criteria for refund of duties and taxes on raw materials of export products have been determined and approved, if the name and specification of the export products of factories or firms or the name, specification, or quantity of their raw materials used do not conform to the determined and approved criteria, an application shall be submitted again to the Ministry of Economic Affairs for determination and approval of the criteria. However, this shall not apply if the discrepancy between the actual quantity used and the quantity determined and approved in the criteria does not exceed 5% or if the said products are of a type for which a national standard has already been set and the difference to the criteria does not exceed the reasonable allowance for discrepancies provided in the national standard.