General Administration of Customs, National Development and Reform Commission, Ministry of Finance and Ministry of Commerce, Administration of the Import of Automobile Parts and Components that Constitute the Characteristics of a Whole Vehicle Procedures

Promulgated: February 28 2005
Effective: April 1 2005
Applicability: The Procedures apply to the regulation of the import of automobile parts and components that constitutes the characteristics of a whole vehicle required for the production and assembly of vehicles by automobile manufacturers that have been verified or filed for the record by the relevant state departments. Where automobile manufacturers importing complete knock-downs (CKD) or semi knock-downs (SKD) may handle customs clearance with, and pay customs duties to, customs in the locality of the manufacturer, the Procedures do not apply (Article 2). The change to domestic sale of automobiles produced under processing trade is governed by the Procedures (Article 30).
For the purposes of the Procedures, the term "automobiles" means motor vehicles of Class-M or Class-N as specified in the Classification of Motor Vehicles and Trailers (PRC state standard GB/T 15089¡ª2001). Motor vehicles of Class-M means motor vehicles that have at least four wheels and are used for the carriage of passengers; motor vehicles of Class-N means motor vehicles that have at least four wheels and are used for the carriage of goods (Article 3). For the purposes of the Procedures, the phrase "constituting the characteristics of a whole vehicle" and "constituting the characteristics of an assembly (system)" means that imported automobile parts and components used by automobile manufacturers during the state of vehicle assembling has constituted the characteristics of a whole vehicle, or during the state of attachment has constituted the characteristics of an assembly (system) (Article 5).

Main contents: Where it is evaluated by self-testing that its automobile parts and components constitute the characteristics of a whole vehicle, the automobile manufacturer shall, prior to their importation, report the vehicle models to the General Administration of Customs for the record. Where self-testing determines that such parts and components do not constitute the characteristics of a whole vehicle, the automobile manufacturer shall apply to the General Administration of Customs for review. If the parts and components are found to constitute the characteristics of a whole vehicle after review, the automobile manufacturer shall make up the record filing (Article 7). Part Three concerns administration of customs clearance. Imported automobile parts and components shall constitute a characteristic of a whole vehicle under any of the following circumstances:
(1) vehicles assembled from imported complete knock-downs (CKD) or semi knock-downs (SKD);
(2) within the scope of determination defined in Article 4:
1. vehicles assembled from the two large assemblies, i.e. imported bodies (including driver's cabin) and engines;
2. vehicles assembled from one of the two large assemblies, i.e. imported bodies (including driver's cabin) or engines, and three or more of the other assemblies (systems); or
3. vehicles assembled from five or more imported assemblies (systems) other than the two large assemblies, i.e., bodies (including driver's cabin) and engines; or
(3) the aggregate price of imported parts and components amounts to 60% or more of the total price of a whole vehicle of a particular vehicle model. (This criterion shall be effective as of July 1 2006) (Article 21).
Imported automobile parts and components shall constitute a characteristic of a vehicle assembly (system) under any of the following circumstances:
(1) assemblies (systems) assembled from individual parts imported as a whole;
(2) assemblies (systems) assembled from imported key parts and components or sub-assemblies and the number imported reaches or exceeds the prescribed quantity limit; or
(3) the aggregate price of the imported parts and components amounts to 60% or more of the total price of a particular assembly (system) (Article 22).
Imported parts and components used for assemblies (systems) manufactured by domestic automobile assembly (system) manufacturers that do not constitute characteristics of an assembly (system) will be deemed as domestically produced assemblies (systems) (Article 23). Where imported parts and components (excluding assemblies and sub-assemblies), and semi-finished components used for the production of parts and components, are subject to substantial processing by domestic automobile and parts and components manufacturers, the ancillary parts and components manufactured will be deemed as domestically produced components (Article 24).
Part Five concerns taxation principles and calculation and collection of tax. For imported parts and components that are determined by assessment centres as constituting characteristics of a whole vehicle, customs shall classify them in the whole vehicle category, and calculate and levy customs duty and import section value-added tax in accordance with the tariff rate for a whole vehicle (Article 28).
Related legislation: Automotive Industry Development Policy, May 21 2004, CLP 2004 No.8 p47; Classification of Motor Vehicles and Trailers; Road Motor Vehicles Manufacturers and Products Notice; PRC Origin of Imports and Exports Regulations, Sep 3 2004, CLP 2004 No10 p31; PRC Customs Law (Revised), July 8 2000, CLP 2000 No.7 p10; PRC Import and Export Customs Duty Regulations, Nov 23 2003, CLP 2003 No.10 p7; and PRC Import and Export Tariff Rules