Many governments use Special Procedures to suspend or reduce customs taxes to boost economic activity. These cost-saving customs and excise authorisations are universal, although their names vary by country. Customs or Bonded Warehousing, Inward Processing (IP), and Outward Processing are the primary global Special Procedures (OP).
In this essay, we'll discuss inward processing's advantages and operation.
The inward processing method allows firms to process goods imported from outside a customs area before determining whether to sell them inside or outside the country or region. IP pertains to items that need regular treatment to maintain, increase marketability, or prepare for delivery.
IP imports are exempt from the following:
VAT and excises on imports
IP allows the firm to pay duty at the rate and customs value of the imported products at the moment of customs declaration acceptance. Otherwise, the duty and import VAT will be computed using the rate and customs value of the processed items when they are released for free circulation, which is usually much higher.
After processing, items might be re-exported, released into free circulation, or kept in customs warehousing or a free zone.
This particular approach requires customs authorization for IP-using businesses. This authorization specifies the items and discharge period. After each discharge period, customs must receive a Bill of Discharge for all IP-imported items.
Under the EU's Inward Processing, commodities from the EU Customs Union, dubbed "equivalent goods," like sugar, may be processed instead of non-Union items under the IP method. Under certain conditions, economic operators may export processed commodities like biscuits before or after importing the non-Union items they replace.
IP has apparent advantages, so "what's the catch"?
As said, enterprises need permission to utilise IP. IP also requires considerable management of special-procedure items. From putting products under unique processes to discharging them, the firm must preserve records. Storage, processing, and transport are examples. Each discharge period must finish with a Bill of Discharge to customs.
Many customs brokers lack competence with particular processes, forcing enterprises to outsource the information.
Running IP: How good is your track and trace?
Customs reporting relies on stock records for stock balance and customs debt calculation. We will design a system that looks at all customs movement transactions for goods at any time, including transfers, scrapping, and stock changes. The IP experts at Customs Manager Ltd will engage you in conversations about write-offs and how to file customs declarations. Where necessary, you will jointly design a system for recording stock movements at the storage. Once implemented, we will run a customs audit and controls depending on stock records.
Easy IP Exploitation
Customs Manager Ltd's clients can easily benefit from Inward Processing Relief. We offer specialist training and guide you step by step through the application process. We help you design a manual process or select an automated solution to operating it. With our support, you can manage everything from establishing stock records from the incoming declaration to tracking all movements later. We will show you how to generate a Bill of Discharge when a discharge period is due easily and quickly.