Agriculture & Food

There are 8 categories of commodities subject to tariff quota management in 2021, of which 7 categories are tariff quota agricultural products. In order to help enterprises make good use of policies, this article will sort out relevant regulations.

01 Definition of agricultural products under tariff quota management

In the Gregorian calendar year, the annual market access quantity of agricultural products under the management of import tariff quotas shall be determined according to the quotas promised by China's entry into the WTO’s Trade in Goods Schedule. The goods imported within the tariff quota shall be subject to tariffs at the tariff rate within the quota; the goods imported under the tariff quota shall be subject to the tariff rate at the additional tariff rate.

02 Varieties of agricultural products under tariff quota management

The Ministry of Commerce and the National Development and Reform Commission issued the "Interim Measures for the Administration of Import Tariff Quotas for Agricultural Products" in 2003 (Order No. 4 of the Ministry of Commerce and the National Development and Reform Commission of 2003). Article 3 stipulates: "Agricultural products subject to import tariff quota management It is: wheat (including its flour and grains, hereinafter referred to as wheat), corn (including its flour and grains, hereinafter referred to as corn), rice (including its flour and grains, hereinafter referred to as rice), soybean oil, rapeseed oil, palm oil, sugar , Cotton, wool and wool tops."

The Ministry of Commerce issued Announcement No. 93 of 2005, and effective from January 1, 2006, the import tariff quotas of soybean oil, palm oil and rapeseed oil and the import state-owned trade management will be cancelled.

On November 30, 2019, the "Decision of the Ministry of Commerce on Abolishing and Modifying Certain Regulations" (Ministry of Commerce Order No. 1 of 2019) amended the "Interim Measures for the Administration of Import Tariff Quotas for Agricultural Products", clarifying that 7 agricultural products are subject to tariff quota management. Category: wheat, corn, rice, sugar, cotton, wool, wool tops.

On May 10, 2021, the Ministry of Commerce issued the "Decision of the Ministry of Commerce on Abolishing and Modifying Certain Regulations" (Ministry of Commerce Order No. 2 of 2021), without adjustments to the types of agricultural products.

03 Quantity of agricultural products under tariff quota management

Import tariff quotas for agricultural products are global quotas. Import tariff quotas for wheat, corn, rice, cotton, and sugar are divided into state-run trade quotas and non-state-run trade quotas. State-run trade quotas must be imported through state-run trading enterprises, and non-state-run trade quotas must be imported through enterprises with trading rights. Users can also import by themselves. Judging from the data released by the National Development and Reform Commission and the Ministry of Commerce in recent years, the total amount of agricultural product quotas has maintained a constant value. The total tariff quotas of seven agricultural products are now compared with the imports in 2020 (as shown in the table below).

04 The issuing unit of tariff quotas and the principle of distribution

Import tariff quotas for wheat, corn, rice and cotton are approved and issued by the National Development and Reform Commission. Import tariff quotas for sugar, wool and wool tops are issued by the Ministry of Commerce.

Article 16 of the "Regulations of the People's Republic of China on Administration of Import and Export of Goods" stipulates that the import quota management department shall consider the following factors when allocating quotas:

1 Applicant's import performance

2Whether the quotas allocated in the past have been fully used

3 The applicant's production capacity, business scale, and sales status

4 Application status of new import operators

5 The number of quotas applied for

6 other factors to consider

The allocation of import tariff quotas for agricultural products also takes the above factors into consideration. Wheat, corn, rice, and sugar are allocated according to the number of applications applied by the enterprise, historical import performance, and production and processing capacity; cotton is allocated according to the actual production and operation capacity of the applicant enterprise and other relevant commercial standards; wool and wool tops are first-come-first-collected according to the contract Way to allocate.

05 Enterprise conditions for applying for tariff quotas on agricultural products

The enterprise conditions required to apply for tariff quotas on wheat, corn, rice, and cotton shall be based on the annual announcement issued by the National Development and Reform Commission’s portal website; the enterprise conditions required to apply for tariff quotas on sugar, wool and wool tops shall be published annually on the portal website of the Ministry of Commerce. The announcement shall prevail.

For example, enterprises that are eligible for import tariff quotas for wheat, corn, and rice in 2021 must first meet the following conditions: be registered with the market supervision and management department before October 1, 2020; they have not violated the "Interim Measures for the Administration of Import Tariff Quotas for Agricultural Products" .

Enterprises that are eligible to receive import tariff quotas for wheat, corn, and rice in 2021 must also meet one of the conditions listed in the corresponding varieties:

Wheat: Enterprises that have obtained the 2020 wheat import tariff quota and have import performance (the import agent commissioned by the import tariff quota enterprise is not included in the import performance of the entrusted enterprise, the same below); the annual wheat processing capacity in 2019 is more than 200,000 tons Flour and food production enterprises.

Corn: companies that have obtained the 2020 corn import tariff quota and have import performance; feed manufacturers with an annual processing capacity of 200,000 tons of corn in 2019; other production companies with an annual processing capacity of more than 450,000 tons of corn in 2019.

Rice: An enterprise that has obtained the 2020 rice import tariff quota and has import performance; a food production enterprise with an annual rice processing capacity of more than 100,000 tons in 2019.

06Applicable tariff quotas for agricultural products

According to the "Notice of the Tariff Regulations Committee of the State Council on the Tariff Adjustment Program for 2021", tariff quota management will continue to be implemented on seven types of agricultural products such as wheat, with tariff quota rates ranging from 1% to 15%.

Cotton tariff quota rate

Within the annual cotton tariff quota quantity, the tariff quota tax rate is applicable, and the tax rate is 1%.

The National Development and Reform Commission determines a certain amount of cotton every year according to market needs, and applies additional tentative tariff rates (5% to 40%), also known as sliding tariffs. The specific regulations are as follows: First, when the duty-paid price of imported cotton is higher than or equal to 14 yuan/kg, the specific tax will be levied at 0.280 yuan/kg; The price tax rate is calculated as follows: Ri=9.0/Pi+2.69%×Pi-1, where Ri is the provisional ad valorem tax rate and Pi is the customs duty-paid price in yuan/kg.

In addition to the number of tariff quotas and the number of additional tariff quotas for tariff allocation, the additional tariff rate for tariff allocation is applicable. The current tariff rate is 40%.

Country-specific tariff quota rate

According to the Free Trade Agreement between the Government of the People’s Republic of China and the Government of the Republic of Mauritius, the Free Trade Agreement between the Government of the People’s Republic of China and the Government of New Zealand, the Free Trade Agreement between the Government of the People’s Republic of China and the Government of Australia, the Implement country-specific tariff quota policies, and apply agreed tax rates within country-specific tariff quotas.

For example, the Ministry of Commerce and the General Administration of Customs issued Joint Announcement No. 70 of 2020. The total quotas for wool tops in 2021 are 36936 tons of New Zealand wool, 665 tons of New Zealand wool, and 38,288 tons of Australian wool, which are within the scope of country-specific tariff quotas. Zero tariffs apply.

Domestic sales tax rate for processing trade

Imported agricultural products for processing trade need to go through the domestic sales procedures in the supervision method of “domestic sales of imported materials and parts”. If the enterprise can submit a general trade quota certificate, the tariff quota tax rate or the additional temporary preferential tariff rate for the tariff allocation will be calculated and taxed and the tax deferred interest will be calculated; If an enterprise is unable to submit a general trade quota certificate, the tax and deferred interest will be calculated and levied at the additional tariff rate.

Smuggled import tax rate

If an enterprise smuggles imported tariff quota agricultural products, the anti-smuggling department calculates the amount of tax evasion according to the tax rate applicable to the additional import of the tariff quota.

07 Precautions for customs clearance of tariff quota agricultural products

Regulatory documents

In addition to the automatic import license (code 7), entry inspection and quarantine (code A) and other regulatory documents involved in the import of tariff quota agricultural products, the special regulatory documents involved are as follows:

The tariff quota certificate, code t, is applicable to the situation of holding the "Agricultural Import Tariff Quota Certificate" to import tariff quota agricultural products, except for the uncombed cotton with the import commodity number 5201000080, except for the import of the country-specific tariff quota certificate.

Tariff and additional preferential tariff rate import cotton quota certificate, code is e, applicable to the import of uncombed cotton with the commodity code of 5201000080.

The country-specific tariff quota certificate, code q, is applicable to the situation of importing New Zealand and Australia wool, New Zealand wool tops, and Mauritius sugar with the "Agricultural Import Tariff Quota Certificate" (in the remarks column marked ××country ×× commodity country quota).

Supervision method

The "Agricultural Product Import Tariff Quota Certificate" and the "Agricultural Product Tariff Distribution Additional Preferential Tariff Quota Certificate" are applicable to general trade, processing trade, barter trade, border small trade, aid, donation and other regulatory imports.

The tariff quota agricultural products that enter bonded supervision sites and special customs supervision areas from abroad do not need to submit a quota certificate, and the customs shall inspect and release them and implement supervision in accordance with current regulations.

For tariff-quota agricultural products that are exported from or imported from bonded supervision sites and special customs supervision areas, the customs shall handle the import procedures in accordance with the relevant provisions of the management of imported goods on the strength of the "Agricultural Import Tariff Quota Certificate".

Overfilled quantity

The overfill volume of each batch of imported bulk cargo shall not exceed 5% of the batch.

One certificate, multiple batches

The "Agricultural Import Tariff Quota Certificate" implements a multi-batch system, that is, if the end user needs to import in multiple batches, the "Agricultural Import Tariff Quota Certificate" can go through customs clearance procedures for multiple times. The number of domestic sales. After the end user completes the last batch of import declarations indicating the quota amount in the "Agricultural Import Tariff Quota Certificate", within 20 working days, the first copy of the "Agricultural Import Tariff Quota Certificate" signed by the customs shall be processed (the consignee shall go through the customs procedures Coupon) The original is delivered to the original issuing agency.

Imported cotton for processing trade

To carry out the import business of cotton processing trade, enterprises must hold a cotton import tariff quota certificate (commodity number 5201000001) that states "This quota certificate applies to imports by processing trade" and an import cotton quota certificate with additional preferential tariff rates (commodity number 5201000080) ; Cotton import tariff quota certificate (commodity number 5201000001) that does not indicate "this quota certificate applies to imports by processing trade" and imported cotton with additional tax rate (commodity number 5201000090) are not allowed to carry out cotton processing trade imports.