The Pilot Reform of the Parametric Management Mode of Unit Consumption in Processing Trade Launched

In order to establish a consumption - based management model that is more in line with the actual production of enterprises, effectively reduce the operating costs of processing trade enterprises, and promote the upgrading of processing trade, Huangpu Customs has launched a pilot reform of the parameter - based consumption - based management model since May 2023.

I. Scope of Application of the Reform Pilot

This reform pilot applies to all processing trade enterprises within the jurisdiction of Huangpu Customs.

II. Start Time of the Reform Pilot

The reform pilot started on May 20, 2023.

III. Content of the Reform

The main content of the reform is to reform the current supervision mode of unit consumption standards, cancel the rigid management requirements of unit consumption standards, transform unit consumption standards into unit consumption risk parameters, implement the unit consumption parameter - based management mode, and optimize the application of unit consumption parameters in customs supervision.

IV. Embodiment of the Advantages of the Reform

(1) Changes in the Declaration Stage

Under the previous regulations, processing trade enterprises were required to declare their unit consumption to the customs within the set unit consumption standard range. However, under the new reform, processing trade enterprises only need to truthfully declare their unit consumption to the customs without being subject to the rigid constraints of the unit consumption standard.

(2) Changes in the Write - off Stage

Before the reform, if the amount of bonded materials consumed per unit of finished product declared by an enterprise exceeded the standard limit, the customs would write off the bonded materials based on the upper or lower limit of the standard, and the excess part would not be granted bonded treatment. However, after the new reform, the customs will review the unit consumption declared by the enterprise, and for the part that is reasonably reviewed, bonded write - off will be carried out.

Take a printing company in Dongguan as an example. In the actual production process, 1.22 kg of art paper is needed to produce 1 kg of childrens books, including a net consumption of 0.94 kg and a loss rate of 23%. Before the reform, the company needed to set the upper limit of the process loss rate of art paper at 21% according to the Unit Consumption Standard for Book Processing Trade (HDB/CY005 - 2009) and then make the declaration. At the time of write - off, the enterprise could write off 1.22 kg of art paper for bonded treatment for every 1 kg of childrens books produced.

Under the new reform, the enterprise enjoys certain advantages. The company can truthfully declare the unit consumption to the customs without being restricted by the rigid unit consumption standard.
When the enterprise makes the manual declaration, it can declare as follows:

However, two points need to be noted at the same time: First, the unit consumption needs to be truthfully declared; second, it is necessary to accurately understand the definitions of net consumption and process loss in the Measures of the Customs of the Peoples Republic of China for the Administration of Unit Consumption in Processing Trade (Order No. 155 of the General Administration of Customs), and especially pay attention not to confuse the concepts of defective products and process loss, and defective products should not be included in the process loss declaration.

The advantages of the reform are mainly reflected in the following aspects:

Cost - saving: Effectively reduce the operating costs of processing trade enterprises.

Worry - free: The unit consumption management mode is more in line with the actual production of enterprises.

Keeping pace with the times: Collaborate with industry associations to dynamically adjust and improve unit consumption parameters.

Generally speaking, the launch of this reform pilot will help better meet the actual production needs of enterprises, reduce their operating costs, and promote the upgrading of processing trade.