Circular No. 656-TC/TCT regarding import tax on functional units

LETTER

OF THE MINISTRY OF FINANCE NUMBER 656 TC/TCT ON JANUARY 19, 2001
REGARDING IMPORT DUTY FOR FUNCTIONAL ASSEMBLIES

Dear: - General Department of Customs

- Hanoi Electronics Company

The Ministry of Finance has received Letter No. 08/XNK dated January 4, 2001 from the Hanoi Electronics Company and Letter No. 156/BKHCNMT-TĐC dated January 12, 2001 from the Ministry of Science, Technology, and Environment regarding the examination of a consignment of VCD disc player component kits imported by the Hanoi Electronics Company for domestic production and assembly under Contract No. 01/HN-SW/00 dated September 12, 2000, which includes individual components in accordance with specified standards and certain functional assemblies as defined in Decision No. 1194/1998/QĐ-BKHCNMT dated August 13, 1998 of the Minister of Science, Technology, and Environment.

Pursuant to Decisions No. 848 TC/QĐ-BTC dated November 1, 1997; Decision No. 383/1998/QĐ/BTC dated March 30, 1998 of the Minister of Finance; Based on the authority stipulated in Government Decree No. 94/1998/NĐ-CP dated November 17, 1998; following Letter No. 5916 TC/TCT dated November 24, 1999 of the Ministry of Finance;

The Ministry of Finance requests the General Department of Customs to direct the implementation of coding and tax rates for functional assemblies in CKD (Completely Knocked Down) and IKD (Incompletely Knocked Down) component kits for electronic items as defined in the List of Complete Functional Assemblies issued by Decision No. 1194/1998/QĐ-BKHCNMT dated August 13, 1998 of the Minister of Science, Technology, and Environment, which were imported before January 1, 2001 in accordance with Article 2 of Decision No. 383/1998/QĐ/BTC dated March 30, 1998 of the Minister of Finance.

Specifically for the Karaoke functional assembly, after reviewing the opinion of the Ministry of Science, Technology, and Environment in Letter No. 156/BKHCNMT-TĐC dated January 12, 2001, the Ministry of Finance requests the General Department of Customs to direct the Haiphong Customs Office to inspect the consignment of Hanoi Electronics Company imported under customs declaration number 12084 N/KD dated December 29, 2000 by Haiphong Customs; if: Mechanical details meet the level of disassembly as prescribed; Functional assemblies (excluding Karaoke assembly) conform with the List issued pursuant to Decision No. 1194/1998/QĐ-BKHCNMT dated August 13, 1998 of the Minister of Science, Technology, and Environment; The Karaoke functional assembly has simple technology, few components, minimal assembly work, low cost as stated in Letter No. 156/BKHCNMT-TĐC dated January 12, 2001 from the Ministry of Science, Technology, and Environment, and is a first-time import, then allow calculation of tax based on the level of disassembly of mechanical details. Require the company to commit not to continue violating.

The Ministry of Finance provides comments for the General Department of Customs to guide implementation.