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.