For tax-exempt export goods, the taxpayer shall, within three (3) months from the day following their release from the factory, submit the tax exemption certificate and a copy of the export declaration to the competent tax authority where the manufacturer is located for case closing. If the aforesaid filing is late, commodity tax shall be levied.

For taxed export goods, the taxpayer shall, after the goods are exported, submit a tax payment certificate and a copy of the export declaration to the competent tax authority where the manufacturer is located for tax refund.

If tax-exempt export goods cannot be exported or are returned for sale in the domestic market, the taxpayer shall submit a self-prepared tax payment certificate to the competent tax authority where the manufacturer is located before selling, unless the goods are shipped and returned to the factory.

Matters with regard to the account keeping, account offset, and tax return for taxable materials that are used in the production of export goods shall follow the Measures for Offset and Refund of Material Tax for Export Goods.

For taxable goods used as raw materials for the manufacture of another kind of taxable goods, the manufacturer shall fill out a Material Computation Form for the said taxable goods and apply to the competent tax authority for inspection. After an inspection agency spot checks the quantity of said material under the instruction of the competent tax authority, the competent tax authority will determine the standards for calculating the commodity tax exemption. If there is a need to prescribe uniform standards for the use of said materials, the competent tax authority should submit the proposal to the Ministry of Finance for approval.
A taxable material may be exempted only if it constitutes an ingredient of the taxable goods; the fuel supply, testing or packaging materials for the manufacture of taxable goods are not exempted from commodity tax.

When a manufacturer produces taxable goods and purchases another taxable good as raw material for production, they can apply for exemption from commodity tax by filling out a Tax Exemption Application for Purchased Materials in triplicate; the first copy is the application, and the other two copies are approval document. After approval by the competent tax authority and retention of the first copy and two copies by the manufacturer, they should be processed according to the following provisions:
(1)If the taxable materials are purchased directly from a local supplier, the manufacturer will give the two copies to the supplier who shall keep the second copy, and submit the third copy to the local tax authority after affixing its own chop; the supplier should produce a tax exemption certificate.
(2)If the taxable materials are imported, the manufacturer will give two copies to Customs for exempting the collection of commodity tax. Customs will save the second copy and return the third copy, which has affixed the Customs chop, to the manufacturer after the exemption is approved. The manufacturer will then submit the third copy to the unit-in-charge of Customs in exchange for a tax exemption certificate.
(3)If the taxable materials are supplied by the manufacturer itself, the manufacturer will save the second copy of the application and submit the third copy to the local tax authority after affixing its own chop; the manufacturer will produce a tax exemption certificate itself.

If the tax-exempt material purchased by the manufacturer according to Item (1) of the foregoing article needs to be delivered to another manufacturer for processing and then returned to the factory for assembly into taxable goods, the following provisions shall be observed:
(1)If the purchased tax-exempt materials are delivered by the manufacturer to a contractor for processing, the manufacturer should fill out a provisional transport certificate each time the said materials are shipped out of the factory.
(2)If the purchased tax-exempt materials are to be directly delivered by the supplier to the contractor for processing, it should be noted so in the Tax Exemption Application for Purchased Materials. At the time of delivery, the contractor will check the goods received and return the tax exemption certificate to the supplier after affixing its chop thereon. The supplier will then submit the aforesaid tax exemption certificate to the local tax authority.

For tax-exempt materials purchased, the manufacturer should conduct a receiving inspection upon receipt, affix its chop and note the date of receipt on the original tax exemption certificate, and then submit it to the local tax authority for examination. After the local tax authority approves of the tax exemption status, a reply letter should be send to the manufacturer. Where the tax-exempt materials are produced domestically, the tax exemption certificate should be forward to the competent tax authority where the supplier is located.

A manufacturer may not supply tax-exempt materials it has purchased for use by another factory without the prior approval of the competent tax authority.

If a manufacturer did not go through the tax exemption formalities according to Article 75 herein in the purchase of taxable materials for use in the manufacture of another kind of taxable goods, and instead, purchased taxed goods in the market for use as raw material, the manufacturer may submit related documents and apply to the local tax authority or the Customs house for refund of commodity tax paid.

For taxable goods produced by a manufacturer that will be put on exhibition and are not for sale, the manufacturer shall submit the information on the nature of the exhibition, organizer, exhibition site, exhibition period, and quantity needed, as well the supporting documents issued by the exhibition organizer, to the competent tax authority for approval, and fill out a provisional transport certificate after receiving approval.
If the aforesaid goods are to be sold at the exhibition site, the manufacturer shall fill out a tax payment certificate or a tax exemption certificate and pay commodity tax to the same competent tax authority.
For the goods for exhibition in the first paragraph hereof, the taxpayer shall, within one month from the conclusion of exhibition, submit the related return shipment documents to the competent tax authority where the manufacturer is located for case closure. If the aforesaid filing is late, commodity tax shall be levied.

For taxable goods that will be donated to the military for troop entertainment, the manufacturer shall apply to the competent tax authority for approval by submitting the supporting document issued by the organizer, and fill out a tax exemption certificate after receiving approval. After delivering the goods to the designated location, the manufacturer should obtain a receipt from the recipient and submit it together with the tax exemption certificate to the tax authority for approval.

For ex-factory taxed goods that are returned due to slow sale or other reasons, the manufacturer may process the goods as return by presenting a return delivery notice, and should handle such goods according to the following provisions:
(1)Re-sorting: If the returned goods after re-sorting have the same quality, appearance, shape and selling price, they may be released from the factory again without a tax payment certificate.
(2)Repacking/reprocessing: If the returned goods are to be repacked or reprocessed, the manufacturer shall request the on-site inspection of the competent tax authority and seek tax refund or offset accordingly; after the returned goods are repacked or reprocessed, the manufacturer shall file a commodity tax return for such goods along with the taxable goods released from the factory in the same month.
Taxed goods that did not go through the formalities as specified in Item (2) of the preceding paragraph shall be treated as new ex-factory goods and subject to commodity tax.

For taxable goods that are returned to the factory for reprocessing due to poor quality or damage and where losses are incurred in the process, the manufacturer must obtain the approval of the competent tax authority before writing off the damaged goods.

If taxed goods become unsaleable due to deterioration of quality or damage, the manufacturer should provide information on the location of storage and method and date of disposition, and request the competent tax authority where the goods are located to dispatch an officer to witness the disposal or melting down of the said goods. After the goods are disposed of, the manufacturer may apply to the local tax authority or customs house for refund of commodity tax paid.

Taxed goods that are sold, used, and then returned in exchange for a replacement shall still be subject to commodity tax.

For taxable goods that are made from refining taxed goods of similar kind, the taxpayer may use the original tax payment certificate to offset the commodity tax due for the refined goods and make up the shortfall thereof.

If taxable goods are physically destroyed in a fire, lost at sea, or destroyed in other force majeure events, the manufacturer or importer may apply to the competent tax authority or customs office for a tax refund or case closing by presenting a checklist of losses and certification papers within 30 days after the disaster happens.

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