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

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 2

Scope Of Exemption Eligible Applicant Form To Be Submitted Import duty exemption on machinery Manufacturer in Application to obtain the and equipment excluding spare parts Principal Customs confirmation letter as a and consumables Area manufacturer must be submitted online using the Exemption to be claimed through the form SPM 1/2015 - Customs Duties (Exemption) Order Manufacturer in PCA 2013 Import duty exemption on raw Manufacturer in Application must be materials and components used Principal Customs submitted to MIDA using the directly in the manufacture of finished Area form PC2/PC2A (New and product(s) Extension) and PC2-1 (Additional Quantity) 3

SPM1/2015 4

Improve business efficiency WHY SELF- DECLARATION  Confirmation letter issued once by MIDA valid until 31/12/2017 MECHANISM??  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

Scope of Exemption & Criteria to Qualify for the Exemption Customs Duties Eligible Sectors Scope of Exemption Qualifying Criteria (Exemption) Order 2013 Import duty exemption on The machinery and Manufacturers machinery and equipment equipment, must be new, in Principal excluding spare parts and unused and directly used Customs Area consumables imported or in the manufacturing Under item 115 (PCA) purchased from a Licensed process of the finished Manufacturing Warehouse product(s) at the (LMW), Bonded Warehouse approved manufacturers’ or Free Zone (FZ) 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 SPM1 Form Confirmation Letter Appendix A Appendix I Customs Permission Letter Appendix B

Documents To Be Submitted For SPM1/2015 1 2 3 4

Documents To Be Submitted For SPM1/2015 5 6 7

Import Duty Exemption for Raw Materials & Components (PC2) Year 2014 2015 2016 Total (Jan- Sept) Applications 224 229 149 602 Received from Plastics and Mould & Die Industries

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

Forms To be Submitted Type of New / Additional Appeal Post Approval Application Extension Quantity (Amendments on Approval) Current Form PC2 PC2-1 Company’s Company’s letter letter with with justification & justification & supporting supporting documents documents o o Mode of Online Physical (Courier / By hand) o Submission Physical (Courier/By hand)

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 PC2 Form / PC2A / PC2-1 Approval Letter Appendix I Appendix A

Process Workflow Applicant • Submission of application through online/physical form Step 1 Step 2 MIDA • Accept complete application and issued acknowledgement letter MIDA • Evaluation by the processing officer Step 3 JPC2 • Decision made in the JPC2 meeting Step 4 Committee Step 5 • Notify company on the decision through email MIDA

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