Regulations Governing Customs Bonded Factories Article 21

In case the actual quantity of any bonded item inventoried by a Bonded Factory in accordance with the preceding Article is not consistent with the booked balance-in-stock for that inventory year, the case shall be handled in accordance with the following provisions:1. If the quantity actually inventoried is less than the booked balance-in-stock by a rate within the inventory discrepancy tolerance, the factory shall be exempted from making supplementary payment of import duty dues therefore, If the imports fall in the category approval, the inventory discrepancy shall be reported to the Customs for supplementary payment of tax within a month beginning from the second day after the submission of the settlement report. The Customs may examine by sampling and ask for supplementary payment of tax or order a refund of payment according to the actual situational.2. If the quantity actually inventoried exceeds the booked balance-in-stock by a rate beyond the inventory discrepancy tolerance, the factory shall report, with reasons, the case to the supervising Customs for identification of the cause of such amount exceeding the booked balance-in-stock. If the cause thereof is the result of a relatively high consumption forecast of raw material per unit of product, the schedule of raw materials used per unit of product shall be revised for use in the stock accounting process in the following year.If the raw materials of same category or interchangeable with each other are partly of bonded items and partly of non-bonded items, they shall all be included in the inventory in the annual closing process, and the quantities of bonded and non-bonded raw materials actually used shall be separately offset against their corresponding booked quantities. For raw materials of which the quantities actually used can not be identified, account offsetting shall be made preferentially for quantities of bonded raw materials. Inventory discrepancies found in the portion of non-bonded raw materials shall be exempted from additional duties and taxes.The inventory discrepancy tolerance rates applicable to the raw materials of Bonded Factories shall be formulated by trades and classes announced by Customs authority and published on the Executive Yuan Gazette.Upon occurrence of shortage of bonded articles the Bonded Factory shall, within 15 days beginning from the second day of occurrence of the event, disclose the case to the Customs authority and make supplementary payment of import duties and dues levy on such short fall.