{"id":2586,"date":"2026-02-06T08:52:13","date_gmt":"2026-02-06T08:52:13","guid":{"rendered":"https:\/\/www.advantage.co.th\/?p=2586"},"modified":"2026-02-06T08:52:35","modified_gmt":"2026-02-06T08:52:35","slug":"how-scrap-or-waste-generated-during-production-must-be-handled","status":"publish","type":"post","link":"https:\/\/www.advantage.co.th\/en\/how-scrap-or-waste-generated-during-production-must-be-handled\/","title":{"rendered":"How Scrap or Waste Generated During Production Must Be Handled"},"content":{"rendered":"\n<p><strong>(According to BOI Thailand \u2013 Section 36(1))<\/strong><\/p>\n\n\n\n<p>Under <strong>BOI Thailand regulations<\/strong>, scrap, waste, or production loss generated from raw materials imported under <strong>Section 36(1) (duty exemption)<\/strong> <strong>cannot be handled freely<\/strong>. The handling method depends strictly on the <strong>type of loss<\/strong> and its <strong>commercial value<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">1. First Step: Classify the Scrap Correctly<\/h2>\n\n\n\n<p>All production scrap must be <strong>classified immediately<\/strong> into one of the following two categories:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">1.1 Scrap \/ Loss Included in the Production Formula<\/h3>\n\n\n\n<p>(<em>Loss in Formula<\/em>)<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Loss quantity is <strong>approved and included<\/strong> in the BOI-approved production formula<\/li>\n\n\n\n<li>Occurs <strong>regularly and predictably<\/strong><\/li>\n\n\n\n<li>Example:\n<ul class=\"wp-block-list\">\n<li>Cutting loss<\/li>\n\n\n\n<li>Machining chips<\/li>\n\n\n\n<li>Trimming waste<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">1.2 Scrap \/ Loss Outside the Production Formula<\/h3>\n\n\n\n<p>(<em>Loss out of Formula<\/em>)<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Loss quantity is <strong>not included<\/strong> in the BOI formula<\/li>\n\n\n\n<li>Occurs <strong>irregularly or abnormally<\/strong><\/li>\n\n\n\n<li>Examples:\n<ul class=\"wp-block-list\">\n<li>NG products<\/li>\n\n\n\n<li>Process defects<\/li>\n\n\n\n<li>Assembly failure<\/li>\n\n\n\n<li>Cancelled finished goods<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">2. Mandatory Physical Control of Scrap<\/h2>\n\n\n\n<p>According to BOI rules:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Scrap <strong>must be physically separated<\/strong> by category\n<ul class=\"wp-block-list\">\n<li>Loss in formula<\/li>\n\n\n\n<li>Loss out of formula<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Scrap <strong>must be traceable<\/strong> by:\n<ul class=\"wp-block-list\">\n<li>Type of material<\/li>\n\n\n\n<li>Source process<\/li>\n\n\n\n<li>Quantity<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Mixing different scrap categories is <strong>not allowed<\/strong><\/li>\n<\/ul>\n\n\n\n<p>This ensures BOI can verify that <strong>duty-free materials are not misused<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">3. Handling of Scrap Included in the Production Formula<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">3.1 Accounting Treatment<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Scrap quantity is <strong>automatically written off<\/strong><\/li>\n\n\n\n<li>Stock cut occurs <strong>together with finished goods export<\/strong> (via export declaration or Report-V)<\/li>\n\n\n\n<li><strong>No separate BOI stock cut application required<\/strong><\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">3.2 Physical Handling Options<\/h3>\n\n\n\n<p>If the scrap <strong>has no commercial value<\/strong>:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It may be discarded according to factory and environmental laws<\/li>\n<\/ul>\n\n\n\n<p>If the scrap <strong>has commercial value<\/strong>:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The company must choose <strong>one of the following<\/strong>:<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">Option A: Export the Scrap<\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Obtain BOI approval before export<\/li>\n\n\n\n<li>No import tax or VAT payable<\/li>\n\n\n\n<li>Import duty obligation is fully discharged<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">Option B: Sell Scrap Domestically<\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Apply to BOI for tax settlement<\/li>\n\n\n\n<li>Pay <strong>tax based on the scrap\u2019s physical condition<\/strong><\/li>\n\n\n\n<li><strong>Tax must be paid before sale<\/strong><\/li>\n\n\n\n<li>No destruction or inspector required<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">4. Handling of Scrap Outside the Production Formula<\/h2>\n\n\n\n<p>Scrap outside the formula is <strong>more strictly regulated<\/strong> because it is not pre-approved in BOI production norms.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">4.1 Available Handling Methods (Choose One)<\/h3>\n\n\n\n<p>According to BOI Notification No. 5\/2543:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Destruction<\/strong><\/li>\n\n\n\n<li><strong>Export<\/strong><\/li>\n\n\n\n<li><strong>Donation<\/strong><\/li>\n<\/ol>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">4.2 Destruction Method (Most Common)<\/h3>\n\n\n\n<p>If destruction is chosen, the company must:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Request BOI approval<\/strong> for the destruction method<br>(e.g., crushing, cutting, melting, incineration)<\/li>\n\n\n\n<li><strong>Use a BOI-appointed inspector<\/strong> to:\n<ul class=\"wp-block-list\">\n<li>Verify scrap type and quantity<\/li>\n\n\n\n<li>Supervise destruction<\/li>\n\n\n\n<li>Issue a destruction certificate<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Assess commercial value after destruction<\/strong>\n<ul class=\"wp-block-list\">\n<li>If valuable \u2192 tax must be paid<\/li>\n\n\n\n<li>If no value \u2192 no tax required<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Apply for BOI stock cut<\/strong>\n<ul class=\"wp-block-list\">\n<li>Submit inspector certificate<\/li>\n\n\n\n<li>Submit tax receipt (if applicable)<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Sell or dispose of scrap<\/strong>\n<ul class=\"wp-block-list\">\n<li>Only after tax payment (if required)<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">4.3 Export or Donation<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Requires <strong>prior BOI approval<\/strong><\/li>\n\n\n\n<li>Export discharges tax liability<\/li>\n\n\n\n<li>Donation must follow BOI-approved recipients and conditions<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">5. Tax Principle Applied by BOI and Customs<\/h2>\n\n\n\n<p>BOI and Customs assess tax based on:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><strong>\u201cThe condition of the scrap at the time of disposal\u201d<\/strong><\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>(According to BOI Thailand \u2013 Section 36(1)) Under BOI Thailand regulations, scrap, waste, or production loss generated from raw materials imported under Section 36(1) (duty exemption) cannot be handled freely. The handling method depends strictly on the type of loss and its commercial value 1. First Step: Classify the Scrap Correctly All production scrap must [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":2587,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[15],"tags":[54,85,88,79],"class_list":["post-2586","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-boi-scrap","tag-boi-inspection","tag-material-and-workmanship","tag-quality-control-inspections","tag-technical-and-performance-validation"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How Scrap or Waste Generated During Production Must Be Handled - Advantage<\/title>\n<meta name=\"description\" content=\"Under BOI Thailand regulations, scrap, waste, or production loss generated from raw materials imported under Section 36(1) (duty exemption) cannot be handled freely. 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