1. Eligibility

• Factories which are qualified for LMW status.
• Criteria used .

2. Import  duties exemption; sales tax @ 0% on import and sales tax @ 0% on local purchase on raw materials, components, machinery & equipments

• How to apply for duties exemption;
• Formats used for application & relevant section of the laws pertaining to claim of duties exemption and new sales tax @ 0%

3. Manufacturing aids

• To explain types of manufacturing aids which are qualified for duties exemption/new sales tax @ 0 %

4. Non-exemption of customs duty on selected goods listed by MOF

• To explain goods which are not qualified for customs duties exemption

5. Responsibilities of a licensee

• Record keeping, payments of customs duties/sales tax for local sales, scraps.
• Submission of monthly returns on usage of raw materials, sales of finished products, Are zero rated raw materials/components be recorded in M2 report?
• Yearly report on sale and purchase.

6. Subcontract work

• Procedures & types of subcontract work allowed. Format used to apply for subcontract work. Sales tax on sub-contract work ( in and out):
• Exemption of import duty under: Customs duties ( Exemption) Order 2017. Exemption of Sales Tax under: Sales Tax ( Person Exempted from Payment of Tax ) Order 2018 on subcontract work performed by:
  • PCA—-PCA/LMW/FIZ
  • LMW—-PCA/LMW/FIZ
  • LMW—NRM ( Non registered manufacturer)
  • Oversea—-LMW/FIZ

7. Movements of finished goods

• Movements of goods . Documents used for movements of goods & new sales tax impact on sale to:
  • LMW to LMW
  • export
  • Public warehouse
  • domestic sales ( SST manufacturer, non SST manufacturer, trader)
  • LMW to FIZ
  • duty free shop
  • Drop-shipment sale & its import duty & sales tax on:
    • LMW—-PCA/LMW/FIZ
    • FIZ—-PCA/LMW/FIZ
    • PCA—-PCA/LMW/FIZ

8. Tax policy on local sales

• Consumer goods & Intermediate goods.
• Payment of tax based on ATIGA rate. How to apply for ATIGA rate
• The latest Government policy on local sale to include Product Specific Rule PSR)
• Pay import duty @ ATIGA rate & sales tax @ 10% (unless exempted) for local sale

9. Reimport, re-export ( exemption & sales tax )

• Reimport of finished goods;
• Customs policy on export of unused raw materials packaging materials by LMW manufacturers
  • Movement of goods which can be treated as export .
  • Class of raw materials and packaging materials under duties
  • exemption which are eligible for export without payment of taxes.
  • Raw materials and packaging materials which are not allowed export.
  • How to apply?
    • Format used.
    • Supporting documents.
    • Period approved for export

10. Remission ( import duty & sales tax )

• Fire, theft & Loss

11. Disposal

• Licence holder responsibilities on disposal of wastes, rejected finished goods, defective raw materials, machinery & equipment.
  • Imposition of sales tax @  0 % on sale of scrap.
  • Time of import/date of purchase to determine payment of import duty & sales tax on sale of used machinery & equipment

12. Export of finished goods through a third party

• Procedures to apply for export through a third party & format used. Sales tax implication.

13. Offences (Customs Act 1967and Sales Tax Act 2018)

• Types of offences commonly committed by licensed holder

14. Penalties for non-compliance (Customs Act 1067 and Sales tax Act 2018)

• Types of penalties. Sections of the laws pertaining to penalties.

15. Q & A

16. Conclusion

• Pros & Cons of LMW as compared to manufacturers having tax exemption under sec.14.2, Customs Act 1967 &Sales Tax Act Act 2018