The process for handling losses under BOI Section 36(1) focuses on managing duty-exempt imported raw materials for export production, ensuring compliance to avoid smuggling charges. Here’s a step-by-step summary in English:
- Import and Stock Control: Request BOI approval for Max Stock (list/quantity of raw materials). Import within limits and record in controlled stock (RMTS system).
- Production Formula Approval: Submit and get BOI approval for production formulas, including in-formula losses.
- Production and Export: Produce goods, export, and submit export declarations to deduct stock per formula (automatically handles in-formula losses).
- Identify and Handle Losses (Focus on Outside-Formula):
- Separate, store, and record losses by item, cause, period, and model.
- If space limited, request external storage.
- Request BOI Approval:
- Submit letter per production period (no overlap) with details, photos, and table.
- First time: Approve destruction method (eco-friendly, turns to scraps).
- Options for losses:
- Destroy: Under BOI/authorized supervision; then dispose scraps, pay taxes on scraps, or export.
- Pay Taxes: Based on condition/value as of import (for commercial value items).
- Export: Abroad or to free zones (specify NR in declaration).
- Donate: To approved entities.
- If commercial value: Summarize for tax collection before sale.
- Deduction/Adjustment:
- For outside-formula: Request separate deduction/adjustment using BOI approval letter at IC.
- In-formula: No separate deduction needed.
- Inspection and Compliance:
- Use authorized 3rd-party inspectors (listed companies).
- Ensure evidence, no environmental issues, and re-approve method changes.