TIEP1 is a major scheme to facilitate exporters and manufacturers to produce goods at lower costs and to compete in the global market. The scheme facilitates manufacturers to obtain their requirements of imported goods (inputs, raw materials) without placing those in a customs bonded warehouse.
- The manufacturer or indirect exporter has to submit an application for approval to Director General of Customs. The applicant has to submit the duly completed prescribed form TIEP1 in triplicate. This form can be obtained from, Customs Export Facilitation Unit, Customs House, Bristol Street, Colombo 1. (see documentation for documents needed for registration)
- Once the approval is granted it covers all the imports for a period of one year. The accumulating amount of duties and taxes on imported inputs for this period should not exceed the total value of Personal/Company/Bank Guarantees furnished. Import CusDecs should be endorsed on the face in block letters with the legend Under the Inward Processing Scheme. (see terms for Personal/Company/Bank Guarantees)
- A manufacturer and Exporter or Indirect Exporter shall maintain in respect of each export product records of,
- Quantities and value of each input imported.
- The Conversion ratio for each input.
- Quantities and values of product manufactured.
- Quantities and values of product exported.
- Quantities and values of goods supplied by a Manufacturer and Indirect exporter to Direct Exporters.
- Quantities and values of inputs given to sub-contractors and quantities and values of manufactured goods received from them.
- Such records shall be made available for inspection by officers authorized by the Director General of Customs.
- All export CusDec’s information are recorded in the Red Book of Customs when the export entry is submitted for approval.
- At the end of the period of one year, a customs officer may visit the exporter or the indirect exporter to check the remaining lots of the imported material. If there are any remaining lots, then the TIEP scheme can be extended for another year.
Procedure – 3PL Provider Point of View
- Imports can be made in the same usual import procedures.
- Import CusDec (entry) should be submitted to Bonds Division for approval. A copy of the TIEP1 approved application (see documentation)should be submitted along with the CusDec.
- A debit note should be requested from the Bonds division in order to prove that there is enough amount of bank guarantee remaining which is equal or greater than the total value of duties of the import.
- Total valve of the import is recorded in the left side of the Red Book of the Bonds division. (see terms for Security for Fiscal Levies)
- Export CusDec (entry) should be submitted to Bonds Division for approval. A copy of the TIEP1 approved application (see documentation)should be submitted with the CusDec.
- Total valve of the import is recorded in the right side of the Red Book of the Bonds division. (see terms for Security for Fiscal Levies).
- Exports can be done in the same usual export procedures on completion of the above steps.
Procedure – Wharf
- Get Customs Assessment.
- Get “Accounts Updated” Seal.
- Make Payments, get yellow receipt.
- Submit write-off (for exports only) .
- Get Debit Note from Bonds Division (for imports only) .
- Enter import/export data into book – Details of Bank Guarantee. For exports use Guarantee Cancellation.
- Approve the Debit Note at Bonds. (for imports only)
- Number the entry at Bonds.
- Assigning of Panel – DDC (Screening), Bonds on Warrant and Delivery copies.
- Give Warrant copy of entry to Customs.
- Get Master D/O.
- AT PORT: Get gate passes to enter the vehicles and arrange the transport.
Who are permitted to operate under TIEP scheme is limited. The parties who are permitted to operate are,
- Direct exporters
- Manufacturers who manufacture good for exports
- Indirect exporters
- Manufacturers who produce goods as inputs for other industries manufacturing goods for export.
Under TIEP1 scheme following items are eligible for duty and tax exemption
- Raw-materials, Components and Parts which will be incorporated in the export product.
- Parts for assembly of the products to be exported.
- Consumable such as Catalysts, Accelerators, Processing Chemicals, Lab Chemicals, Research Chemicals and Retarders of chemical reaction to be used in the product to be exported.
- Packaging material including labels, stickers and tags to be used for packing the export products, raw-materials for the manufacture of such packaging material and export catalogues and brochures.
An operator utilizing the scheme to manufacture any product for export shall not be entitled to operate under Duty Rebate scheme, Manufacturer-in-Bond scheme or any other scheme for temporary importation of inputs for manufacture and export of an identical product.
Security for Fiscal Levies
- The exporter or indirect exporter should furnish a personal, company or bank guarantee to the Customs, as determined by the Director General of Customs equal to the full (i.e. 100%) of the value of the duty and taxes payable for the period for which the approval is granted (i.e. one year) as described below.
- The Personal/Company/Bank Guarantee will be valid for a period of one year.
- New exporter or indirect exporter who import for the first time under the Scheme should furnish a 100% Bank Guarantee for the value of duty and tax payable for a period of one year.
- Existing Exporters/Indirect Exporters, who have over one year but less than 3 years of proven track record, may furnish a bank guarantee equal to 25% of the value of duty and tax payable for a period of one year and a Personal/Company guarantee for the balance 75% of the duties and taxes payable.
- An Exporter/Indirect Exporter who operates under the Scheme with a proven track record of over 3 years, may submit a Personal/Company guarantee equal to the full value of the duties and taxes payable for a period of one year.
- Where any Exporter or Indirect Exporter who operates under the Scheme or wishes to operate under the Scheme is dissatisfied with a decision of the Director General of Customs he will be entitled within 30 days of the communication of such decision to appeal to the Secretary to the Treasury or to the Appellate Body appointed for the purpose.
- Indirect Exporters can supply goods to following direct exporters:
- Customs approved bondsman.
- TIEP certificate holder.
- BOI enterprise approved under section 17 of the BOI Act who is within zones or outside zones.
- Customs approved industries that are operating under Infac (Investor Facilitation Centre) procedure.
Rules Regarding Obtaining of Inputs from Local Suppliers and Sub-Contracts
- A manufacturer or an exporter who operates under this scheme can obtain supplies from a manufacturer/indirect exporter operating under the scheme or from a manufacturer in Bond Scheme. (on GRN or on Ex-Bond Goods Declaration)
- When a manufacturer/indirect exporter who operates under the scheme supplying finished products to a manufacturer/exporter who operates under the same scheme or under the scheme for Manufacturer-in-Bond for exports is required to obtain a certified Goods Received Note from the manufacturer/exporter in order to obtain credit under the TIEP scheme.
- A manufacturer/exporter may be permitted to sub-contract with any other manufacturer for manufacturing of any product under the scheme and the manufacturer/exporter shall be liable for any duties and other charges which may occur due to loss or damage of the materials or finished products during such sub-contracting operation as at the time of importation.
Documents needed for registration:
- Duly completed prescribed TIEP1 form in triplicate.
- Project report.
- Certificate of VAT registration.
- Business registration (form 65)
- Memorandum of article (form 48)
- Data required for evaluating the conversion ratio and wastage factor. They should be recommended by the Ministry of Industries or other relevant authority.
- Other necessary approvals applicable. (Tea Board, Coconut Development Board)
- A sample of the product, if required by the Director General of Customs for the processing of the application.
The project report should also include the following details.
- The location of the manufacturing plant.
- Why exporter or the indirect exporter is requesting for TIEP, or the objectives.
- Benefits that the exporter or the indirect exporter can gain through TIEP.
All TIEP registration approvals are required to be renewed annually. (see documentation for documentation needed for registration). An exporter or an indirect exporter is required to submit the registration documents to the Director General of Customs. Once the approval is granted it is valid for a period of one year. At the end of this period a new approval should be obtained.
All TIEP registrations are free of charge.
See also: TIEP
--Gishan Chaturanga 16:56, 10 July 2012 (IST)