INSIGHTS

Difficulties Concerning the Exemption from the Safeguard Measure on Pre-Painted Steel Sheet and Strip Imports

September 26, 2017 Customs & Trade

Under Decision No.1931/QD-BCT dated May 31, 2017 of the Ministry of Industry and Trade, for the importers of high quality pre-painted steel sheet and strip products used for special purposes (including but not limited to PVDF steel products used in thermal power plants; PCM and VCM steel products used in electronics and the electrical appliance industry) with HS codes 7210.70.10 and 7212.40.20, the Ministry of Industry and Trade will issue a decision on the safeguard measure exemption based on the application of the importers of the above products.

Currently, based on the application of importers, the Ministry of Industry and Trade has issued 13 decisions on safeguard measure exemption in 2017 for 13 importers which entered into force from June 15, 2017.  However, during the implementation of Decision No.1931, as well as the decisions on safeguard measure exemption, the General Department of Vietnam Customs has faced the following difficulties:

1.   Grounds for determining high quality pre-painted steel sheet and strip products

Under the List of imports and exports promulgated in Circular No.103/2015/TT-BTC dated July 01, 2015 of the Ministry of Finance, there is no criteria for distinguishing between normal and high quality pre-painted steel sheet and strip products under the two (02) above-mentioned HS codes. This causes difficulties for the customs authorities in determining whether high quality pre-painted steel sheet and strip products are exempt from the safeguard measure.

2.  Conditions of tax refund

To be exempt from the safeguard measure and to be entitled to a refund of the paid tax, high quality pre-painted steel sheet and strip imports must be used for proper purposes provided in the decisions on safeguard measure exemption. However, according to the General Department of Vietnam Customs, there are some cases in which such products were imported before the Ministry of Industry and Trade granted the exemption from the safeguard measure. At the time of making the customs declaration for these products, the customs authorities did not have enough guidance for identifying which purpose the imports were to be used for, such as being: (i) used in thermal power plants; (ii) used in electronics and for the electrical appliance industry or (iii) used for other purposes. Therefore, the customs authorities are faced with difficulties in refunding the paid tax, when cannot identify the use purpose of imported products.

Thus, to solve the above problems, the General Department of Vietnam Customs has requested the Ministry of Industry and Trade to (i) provide guidelines or set out the technical standards for the inspection and comparison of the imports to identify whether such imports are high quality pre-painted steel sheet and strip which are exempt from the safeguard measure; (ii) consider supplementing the regulation to include the following points that customs authorities can consider when making the decision on exemption from the safeguard measure: quantity, number of customs declarations for imported goods, amount of the imports being entitled to tax refund, etc. which allows the customs authorities to easily fulfill their duties.

–  Written by LE & TRAN | Vietnam’s Premier Boutique Litigation Firm