The process to have tax exempted on imported goods requires to have recommendation from line ministry. Before it required to buy exemption application form and fill it manually in order to apply for tax exemptions from ministries or other government agencies. This was done before lodging Customs declaration.
Under electronic Single Window, upon declaration customs registration lodgement, an automatic online application is generated for declarations that are requesting for tax exemptions. The clearance process continues only when the application is process and approval granted into the system. For each involved user, a system notifies him into the system, SMS and mails.
The following are step by stepe-Exemptions processing:
STEP 1: BROKER PREPARES A DECLARATION
- The 9th box of the declaration will be used to input the TIN for the line Ministry responsible for exemption approval (guarantor).
- On box 37 of the declaration (CPC), input the special addition code created for the exemption request. Normally the exemption codes starts with “E”, followed by numbers.
Validate the declaration; on validation of the declaration, the exemption request is sent to the Line Ministry.
There is two types of exemptions depending to the approval process:
(1) Decentralized exemptions: It is low risk exemptions that have simplified approval process. They are not required to pass through customs exemptions office and commissioner for Customs delegated his approval power to verification officers who are responsible to check if the exemption applied is in accordance with laws. They are using the National Procedure code started by the letter “D”.
Once the line ministry is approved the request, the declaration is assessed immediately by clearing agent.
(2) Centralized exemptions: This type of exemptions requires to be approved by both the line ministry and Commissioner for Customs Services. When the online application is processed and approved by line ministry, ReSW forward it to Customs exemptions office that will also verify it prior to the final approval of the commissioner for Customs. They are using the National Procedure code started by the letter “E”.
Comfirmation is done by clearing agent before the system generate online application in order to avoid mistakes.
Once the application is generated, the declaration cannot be assessed unless the exemption is granted, thus the declaration should only be registered to send the exemption request to the line Ministry.
If there is any change on customs declaration that affects the nature of goods of which the exemptions has been requested, they system shall prompt the user to generate a new application that will replace the previous one.
STEP 2: LINE MINISTRY PROCESSING
On registration of Customs declaration, the officer in charge of exemption processing in the Ministry receives the request on line and acts on it. On approval the file is transmitted to the PS for approval.
The officer in the Ministry receives the message and processes the exemption.
After the approval by line ministry, the system shall forward the approval to Customs exemptions office if the exemption is centralized while for decentralized ones, clearing agent receives message informing him that the exemption has been approved so that he/she can go ahead and assess the Customs declaration.
STEP 3: CUSTOMS PROCESSING
Depending to the nature of risk involved in some exemptions processing, Customs verifies exemptions approved by line ministries. This step is only applied for centralized exemptions that used national procedure code started with “E”.
STEP 4: FEED BACK TO APPLICANT
Once the application is duly approved by the Commissioner for Customs, the message is immediately sent back to the Broker who will in turn assess the declaration for the system to apply tax exemptions granted.
In any case the exemption request is rejected at any step explained above, the message will be sent back to the Broker immediately informing him/her reasons for that decision. This will terminate the process.