On April 26, 2021, the Ministry of Finance and the State Administration of Taxation jointly issued Announcement No. 16 of 2021. It involves steel pipe products, and the export tax rebate for steel pipes included in a total of 49 commodity codes under tariff lines 7304, 7305 and 7306 is abolished.
On July 28, 2021, the Ministry of Finance and the State Administration of Taxation jointly issued Announcement No. 25 [2021], which involves steel pipe products, and cancels the export tax rebate for steel pipes included in the three commodity codes under tariff heading 7304.
The policy effect of the above two announcements is superimposed, which means that from August 1, 2021, all steel pipe products in China will no longer enjoy export tax rebates.
1
The policy signal released by the export tax rebate of steel pipe products is completely cancelled
From the export rebate rate setting, the mechanism of effect on optimizing the structure of export products and promoting the upgrading of domestic industries is analyzed. The export rebate rate of upstream products should be lower than the export rebate rate of downstream products. As a result, enterprises are less willing to export upstream products directly, and are more willing to export downstream products with higher added value after deep processing in China to obtain higher export tax rebates. Driven by economic interests, production factors are concentrated in the downstream field, production profits are transferred to deep-processed products, and the guiding effect of the export tax rebate policy on the adjustment and upgrading of the domestic industrial structure has thus emerged.
Steel products are a collective term for metal products based on the composition of the iron element (Fe). The "Interpretation of the Indicators of China's Iron and Steel Industry Statistical Indicator System" defines that steel products specifically include three major categories of products, such as pig iron, crude steel and steel.
As a complete industrial production system, the steel products manufacturing industry includes mining, mineral processing, sintering pellets, ironmaking, steelmaking, steel processing and other major production departments and auxiliary production departments.
Steel product production process
Steel pipe belongs to the downstream products in the production process of steel products, and the state has completely cancelled the export tax rebate of steel pipes, and the policy signal released is obvious. That is, the export of steel products will no longer be encouraged, and the production of steel products in China will be mainly to meet domestic demand in the future.
If further in-depth analysis is done, the purpose of this move is to implement the "carbon peak and carbon neutrality" goal proposed by the central government. The steel products manufacturing industry has the largest carbon emissions among the 31 manufacturing sectors, and the reduction of steel production and production scale has played a significant role in reducing carbon emissions. Compared with developed countries in Europe and the United States, China's declaration of carbon neutrality is 10 years late. However, the promised time between carbon peaking and carbon neutrality in developed countries in Europe and the United States is mostly between 40 and 60 years, while China has only promised 30 years. Time is running out and the task is arduous! Curbing the capacity of the steel products manufacturing industry by eliminating export tax rebates is a better way for the industry to serve the needs of the national strategy.
2
The commodity code is the import and export of goods and trade policy
A bridge between them to build connections
It should be emphasized that the direct direction of the formulation of import and export trade policies by the competent department of the State Council is not specific import and export goods, but the tariff number column (also known as: commodity code and commodity code) in the Import and Export Tariff of the People's Republic of China.
Import and export goods first determine the commodity code to be included through commodity classification; then import and export goods are implemented for the trade policy formulated for the commodity code. This is the coded management mode of import and export goods. It can be figuratively compared to: the commodity code is the bridge between the import and export of goods and trade policy.
Commodity codes are a bridge between import and export goods and trade policies
Take the national policy of canceling the export tax rebate for a variety of steel products, including steel pipes, as an example:
The competent department of the State Council has formulated a policy to abolish the export tax rebate for several commodity codes, such as 73041110, 73041120, 73041130, 73041190, etc.
When an enterprise actually exports a specific steel product, it is not immediately clear what the export rebate rate should be implemented for the steel product. Instead, the export steel products are first classified through commodity classification, and the export steel products are classified into the corresponding commodity code; and then the export rebate rate that steel products should be implemented is determined through the commodity code. If the commodity code that is included in the list of commodity codes that cancel the export tax rebate this time, the export steel product will not be able to receive the export tax rebate. On the contrary, it is not subject to the restrictions of the cancellation of the export tax rebate policy.
3
After the implementation of the new policy, the pipeline export is wrong
Classification according to steel pipes will cause significant tax refund losses
Enterprises export pipelines, the error according to the classification of steel pipes has actually always existed. However, before the comprehensive cancellation of the export tax rebate policy for steel pipes, due to the reasons from both exporting enterprises and customs, this classification error has not received enough attention.
From the perspective of export enterprises, before the introduction of the comprehensive cancellation of the steel pipe export tax rebate policy, the steel pipe export can get a full tax refund of 13%, and the correct export tax rebate rate for pipeline export is also 13%. In this case, even if the pipeline is incorrectly classified according to the steel pipe when exporting, it will not cause the export tax rebate loss to the enterprise, and it will not cause differences in other aspects such as regulatory documents. Therefore, it has not been paid attention to by export enterprises, and it has not been corrected in time.
From the perspective of customs supervision, before the comprehensive cancellation of the steel pipe export tax rebate policy, the enterprise's export pipeline is incorrectly classified according to the steel pipe, which will only cause the product code declaration error. In strict accordance with the provisions of the law, in accordance with the provisions of Article 15 (1) of the Regulations of the People's Republic of China on the Implementation of Customs Administrative Penalties, if the accuracy of customs statistics is affected by the error in the declaration of commodity coding, a warning shall be given or a fine of between 1,000 and 10,000 yuan shall be imposed. Due to the enterprise's misclassification of pipelines according to steel pipes, the actual harm caused and the corresponding penalties are very minor, subject to the constraints of the customs limited administrative law enforcement resources, as well as from the aspects of administrative costs and social benefits. It has not been paid attention to by the customs, and it has not been regulated in time.
When the implementation of the steel pipe export tax rebate policy is fully cancelled, the pipeline export error is classified according to the steel pipe, which will cause "policy error injury". As a result, pipelines that were supposed to enjoy a full export tax rebate of 13% could not obtain an export tax rebate due to the wrong classification of steel pipes. It will not only cause major export tax rebate losses of up to 13% to export enterprises; it will also affect the guiding role of export tax rebate policies in optimizing the structure of export products and promoting domestic industrial upgrading; it is also not conducive to the realization of national macro intentions and strategic goals such as "carbon peaking and carbon neutrality".
At present, it should be the best time to study the classification of pipelines in depth and promote the long-term problem of pipe export errors in accordance with steel pipe classification!
4
Commodity classification of pipes and steel pipes
According to Article 2 of the Provisions of the People's Republic of China on the Administration of the Classification of Import and Export Goods of customs (Order No. 158 of the General Administration of Customs), commodity classification refers to the activity of determining the commodity code of import and export goods in accordance with the basis of commodity classification in the Coordination System.
To ensure the accuracy of the classification conclusions, two points must be achieved: first, the facts of the goods are clear; second, the classification basis is sufficient. For the classification and analysis of pipelines and steel pipes, the research and analysis are also carried out from the two aspects of commodity facts and classification basis.
01 Research on commodity facts
Pipes and steel pipes are two completely different commodities, and the main factual characteristics are as follows:
(1) Different definitions of products:
Pipelines, the national standard of the People's Republic of China GB 50316-2000 "Industrial Metal Pipeline Design Code" definition, is composed of pipeline components, pipeline hangers, etc., used to transport, distribute, mix, separate, discharge, meter or control fluid flow.
Natural gas transmission pipelines
concentrate:
Pipe components: Components used to connect or assemble into pipes, including pipes, pipe fittings, flanges, gaskets, robust parts, valves and pipe special parts.
Pipe components example (partial)
Pipe support hanger: A general term for various structures used to support pipes or constrain pipe displacement, but excluding civil structures.
Pipe support hanger example (partial)
Steel pipe, the National Standard of the People's Republic of China GB/T 30062-2013 "Steel Pipe Terminology" definition, is a steel with two ends open and hollow closed sections, and the length and section circumference usually have a larger proportion.
According to the manufacturing method, steel pipes include seamless steel pipes and welded steel pipes.
Seamless steel pipe
(2) The production raw materials are different:
Pipeline manufacturing, the production of raw materials mainly include: pipes (seamless steel pipes, welded steel pipes), pipe accessories (joints, elbows, tube sleeves, etc.), valves, installation buffer pipes (pressure gauges, flow meters, etc. for installation), orifice plates and other devices, support hangers and bolts, U-shaped cards and other fasteners.
Steel pipe manufacturing, the raw materials required include round pipe blanks and strips. Round tube blanks are used to make seamless steel pipes, and strip steel is used to make welded steel pipes.
(3) The processing technology is different:
The processing technology of the pipeline is: pipe unloading, bending, groove, thread, etc. machining, welding (flange welding, reducer joint welding, pipe section welding, etc.), post-treatment (heat treatment, chemical cleaning, defect disposal, etc.), as well as the installation of venturi pipes, orifice plates, hangers and other devices.
The processing technology of steel pipe, the processing and production of seamless steel pipe includes both hot rolling and cold drawing; the processing and production of welded steel pipe has only one process, which is divided into two steps: bending and forming and welding.
The comparison of the three aspects fully shows that pipes and steel pipes are two completely different commodities. Although steel pipes are an important raw material used to make pipes, they should never be equated with steel pipes.
02 About the use of classification basis
The Annotations on Import and Export Tariff Commodities and Items (hereinafter referred to as the Annotations on Tariff Rules), which are compiled simultaneously by China's customs, are the most authoritative interpretation of the scope of commodities and items listed in the Harmonized System, and are one of the important legal bases for determining the classification of imported and exported goods.
In the Commentary on Tariff Rules, the contents that belong to the basis of classification include: class notes, chapter (chapter) notes, item provisions, subheading provisions, pin heading notes and subheading notes.
According to statistical collation, the commodity name "pipeline" appears 67 times in the textual expression of the classification basis in the "Tariff Notes". The details are as follows:
According to the different meanings expressed, the above 67 textual expressions can be divided into two categories:
Category I: The goods explained, whose function or use are related to the pipeline.
For example:
(1) Item 4504 Annotation: "Pressing cork ... For insulation or protection of hot water pipes or steam pipes,".
(2) Chapter Seventy-Five, General Note II: "Nickel-Chromium and Nickel-Chromium Ferroalloys." ...... Or used as a pipe material in high-temperature chemical or petrochemical processing industries. ”。
(3) Chapter 90, General Note IV (ii): "Various devices at the receiving end: ... Remote sensing systems are mainly used in oil and gas production, various production pipelines, water pipes, gas pipes, etc. ”。
The second category: the goods explained, including pipes in their composition.
(1) Item 8401 Notes: "Nuclear reactors usually consist of the following parts: (ii) mechanical structural parts [e.g., ,...... Coolant delivery pipes...]. ”。
(2) Item 8411 Comment: "The turbojet engine consists of a compressor, a combustion system, a turbine and a nozzle. A nozzle is an astringent pipe that is housed in an exhaust pipe. ”。
(3) Item 8428 Comment: "II. Machinery for Continuous Transport (IV) Pneumatic hoists and conveyors (e.g., air duct conveyors), which use air flow to transport small containers through pipes ... or bulk cargo..., including similar machines for transporting and purifying grain. ”。
Although the Tariff Notes explain a large number of goods and items, they involve a large number of industries and fields. However, as an independent and complete set of knowledge systems, it must always follow the same commodity attribute cognition and classification standards, and there can never be logical inconsistencies.
Summarizing all 67 textual expressions in the Tariff Notes where the name "pipeline" appears can summarize a clear fact about the use of "pipeline".
That is, the "pipe" is installed as a constituent part and used separately in different mechanical or electrical equipment.
(1) Item 8401, nuclear reactor structure with coolant delivery pipeline.
(2) Item 8402, there are many pipes running through the furnace body of the fire tube boiler, and the flue gas passes through it.
(3) Item 8411, turbojet engine structure with pipes (nozzles).
(4) Item 8418, the evaporator consists of a set of piping systems.
(5) Item 8428, airflow pipe conveyor, which uses airflow to transport small containers or bulk goods through pipes, including similar machines for transporting and purifying grain.
(6) Item 8514, Low Frequency Induction Furnace (certain types) melt flows from the main crucible through a vertical ring pipe.
Then, with regard to the classification of goods in pipelines, it may be determined according to the provisions of The General Rule I of Classification, using Note II of the sixteenth category:
First, the pipe is not a product otherwise specified in Notes I, 84 and 85.
Second, the pipeline is not a commodity listed in chapters eighty-four or eighty-five.
Finally, the installation and use of each pipeline product is very specific, and its specificity and specificity of its use are obvious.
Therefore, the idea that pipe classification should follow is to classify the parts of the machine or equipment installed and used according to the actual use.
5
The actual state of the inspection at the time of the pipeline exit
The actual inspection status is the actual state of the goods when the enterprise declares to the customs. Article 5 of the Provisions of the People's Republic of China on the Administration of the Classification of Import and Export Goods and Commodities of the Customs (Order No. 158 of the General Administration of Customs) stipulates that the classification of imported and exported goods shall be determined according to the actual inspection.
The enterprise declares to the customs that the pipeline is complete, and the whole manufacturing process is completed in the domestic factory in a prefabricated manner, and it has been assembled and tested. Due to the complex structure of the pipe, the installation and integration occupy a larger footprint. Limited by means of transport, as well as the need for safety protection during transportation, the cargo delivery specification requires the factory to make the maximum combination of pipeline components under the premise of meeting the transportation conditions, and deliver them in the form of several pipe segments or components.
At the time of export, according to the sea loading requirements, these pipe segments or components are packaged and bundled into a single piece of cargo, and declared to the customs at one time.
At this time, the actual inspection status of the complete product of the export pipeline of the enterprise is, "the unassembled part of the complete product of the pipeline". According to General Rule II (A) of Classification, all export goods shall be regarded as complete pipeline products and shall be included in the corresponding commodity code.
The mistakes that are prone to occur in work practice are due to the lack of mastery of the legal provisions of "determining the classification of goods according to the actual inspection status" of customs personnel, and the failure to do in-depth study and study of the structure of the pipeline in advance. What led to the delivery of the factory was the unassembled parts of the complete pipeline, but the customs personnel did not correctly apply the general rule of classification ii (I), declaring all export goods as "complete pipeline products" to the customs to ensure that the cargo owner obtained the legal export tax rebate benefits; instead, the unassembled pipe constituent parts were mistakenly classified and classified one by one, and declared to the customs one by one.
This is the main reason for the problem of misclassifying pipes according to steel pipes at the outlet of the pipeline!
6
summary
This article is only based on the commodity facts of the pipeline, based on the "Tariff Notes", the analysis and demonstration of the pipeline should be classified according to the use of parts.
However, in the implementation of the work, it is not easy to apply this classification idea to each specific export pipeline product! It is also necessary to conduct in-depth research and understanding of the background of the export project, the industry areas involved (such as thermal power, oil and gas, salt and halogen chemicals), the functions and working principles of the machinery and equipment installed and used in the export pipeline, and the function, structure, manufacturing process, installation and use mode of the export pipeline itself. In order to classify the export pipeline into the correct commodity code, it is necessary to ensure that the legitimate export tax rebate income of the cargo owner is not lost.
Accurate commodity classification is the basis for ensuring the effective implementation of trade policies such as national export tax rebates. Whether it is an export enterprise or a customs department, it should work hard for it!
Text/Wang Tingxuan
(Shanghai Customs)
Editor: Chang Xiangjing
Reviewer: Lu Xiangyu
Producer: China Customs Media Center
Submission email: [email protected]
(Xiumi contribution account with the same email)