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Can Bonded Materials under Processing Trade Complete Export Customs Clearance via General Trade?
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TRACKING NO. 20260422 / GLOBAL Zhongshen Trade · 23+ Years of Expert Trade Agency
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I am the foreign trade supervisor of a garment processing trade enterprise in Shanghai, and I recently encountered an urgent tricky issue: Our long-term overseas client who has cooperated with us for 5 years originally ordered 10,000 processed finished products, but suddenly modified the order last week, requesting to directly purchase a batch of bonded cotton materials we hold, export via general trade, and requires delivery within 10 days. I am extremely anxious now. This batch of cotton is bonded material filed under our previous processing trade manual. If we directly declare export under general trade, will the goods be detained by customs and trigger an audit? Besides, for general trade export, do we need to pay supplementary customs duty and value-added tax first? Will the tax payment affect the subsequent verification of our processing trade manual? The client is pressing for delivery very hard. If the process is too complicated and we miss the shipment date, we need to pay a penalty of nearly 100,000 RMB. I am really worried and want to ask: Can this batch of bonded materials be exported under general trade, and what is the specific operation process?
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
First，pre-document verification must be completed，with focus on checking the filing information of the processing trade manual，the entry customs declaration of bonded materials，and the material inventory ledger，to ensure that the name，specification and quantity of the materials fully match the records in the manual，Mixed declaration of materials not filed in the manual is strictly prohibited.
The core node requires two connected key operations: The first step is to apply to the competent customs for the domestic sales taxation procedure of bonded materials，submit the Application Form for Taxation of Processing Trade Bonded Materials for Domestic Sales，pay the full amount of supplementary customs duty，value-added tax and interest on deferred tax，and obtain the Tax Payment Certificate and Domestic Sales Taxation Connection Note issued by the customs，The second step is to convert the materials to general trade supervision status by virtue of the above documents，then declare export under general trade，and add a remark on the customs declaration that "converted to general trade export after domestic sales taxation".
An abnormal contingency plan shall be formulated in advance: If the shipment date is tight after tax payment，you can apply for the customs "advance declaration" mode，complete the pre-entry of customs declaration 3 days before the goods arrive at the port，to avoid port congestion，If the manual verification is affected，you can submit the Application for Extension of Manual Verification to the customs after taxation，with a maximum extension of 30 days.
To achieve final compliance，it is necessary to ensure the consistency of document flow，goods flow and capital flow: The foreign exchange collection amount on the export customs declaration must match the domestic sales taxation amount and the payment amount from the client. All documents shall be kept for 2 years for future reference，to avoid subsequent customs audit risks.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
In the customs declaration link of converting bonded materials to general trade export, two core compliance points shall be noted: First, the domestic sales taxation procedure must be completed first. The customs system will automatically compare the manual filing data with the taxation declaration data. If there is a quantity discrepancy, it will directly trigger manual document review, and even initiate an audit; Second, the "nature of levy/exemption" column of the export customs declaration shall be filled with "general taxation", the "supervision mode" column shall be filled with "general trade (0110)", and the number of the Tax Payment Certificate for domestic sales taxation shall be associated. Missing filling will lead to the customs declaration being put on hold and the goods cannot be released.
Cindy ChenYears of service：3Customer Rating：5.0
Key Account ManagerStart a Chat
From the perspective of logistics operation, it is necessary to coordinate with the warehouse and freight forwarder in advance: First, bonded materials are originally stored in customs supervised warehouses. After completing domestic sales taxation, you need to go through the warehouse departure procedure for transferring from supervised warehouse to ordinary warehouse, avoid direct shipment via general trade from the supervised warehouse, otherwise it will be deemed as an illegal operation; Second, if the shipment date is tight, you can choose the integrated customs clearance mode of "local customs declaration + port inspection and release", complete the customs declaration review at the enterprise's local customs, and the port directly inspects and releases the goods. This mode can save up to 3-5 days of customs clearance time and avoid the risk of port storage fees and shipment delay.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
Two key matters need attention at the tax level: First, the supplementary customs duty and value-added tax can be deducted before corporate income tax by virtue of the Tax Payment Certificate issued by the customs, and the input VAT can be deducted normally; Second, after general trade export, if the export tax refund conditions are met, you can apply for export tax refund with export customs declaration, foreign exchange collection certificate and other documents. It should be noted that the tax base for tax refund is the domestic sales taxation price of the materials, not the bonded entry price. The tax refund base shall be calculated accurately to avoid abnormal tax refund declaration data.
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
Compliance shall be ensured in the foreign exchange receipt and payment link: First, the tax for domestic sales shall be paid from the enterprise's general settlement account to the special customs tax account, and offshore accounts or other illegal accounts shall not be used; Second, the foreign exchange for general trade export shall be directly remitted to the enterprise's account to be verified. After completing foreign exchange settlement or transfer, the foreign exchange collection declaration shall be made in the foreign exchange monitoring system, to ensure that the received foreign exchange amount is consistent with the FOB amount on the export customs declaration. If there is any discrepancy, a discrepancy explanation shall be submitted in the system to avoid being listed as a key monitoring object by the State Administration of Foreign Exchange.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
From the perspective of legal risk avoidance, the trade contract shall be revised with the client in a timely manner, clearly stating that the goods are "original bonded materials with all taxes paid", to avoid subsequent disputes over the nature of the goods; At the same time, all documents related to this business, including the order modification letter, customs taxation certificate, customs declaration, logistics documents, etc., shall be retained, which can be used as legal evidence if there is a subsequent customs audit or client claim; In addition, if there is a possibility of paying penalty due to process delay, it shall be clearly stated in the contract that "delay caused by customs compliance procedures is eligible for liability exemption", so as to reduce the enterprise's compensation risk.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
Three preparations shall be made for on-site inspection: First, submit copies of the domestic sales taxation certificate of bonded materials and the manual filing list to the port inspection department in advance, to facilitate inspectors to check the nature of the goods; Second, the outer packaging of the goods shall be clearly marked with name, specification and quantity, which are consistent with the declaration information on the customs declaration, to avoid unpacking inspection caused by unclear marking; Third, if the inspector raises a question about the nature of the goods, the Domestic Sales Taxation Connection Note issued by the customs shall be presented in a timely manner to prove that the materials have completed the taxation procedures, so as to avoid being misjudged as illegal bonded goods.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
At the export tax refund audit level, the consistency of four flows shall be ensured: First, for goods flow, the warehouse departure slip, logistics transportation slip and export packing list for the transfer of bonded materials from supervised warehouse to ordinary warehouse shall be provided to prove the flow track of the goods; Second, for document flow, the domestic sales taxation certificate, export customs declaration and foreign exchange collection certificate shall be bound and retained for future reference; Third, for capital flow, the tax payment certificate and client payment certificate shall be provided to prove that the capital flow matches the business; Fourth, for invoice flow, if the enterprise issues a domestic sales invoice for the materials, it shall ensure that the invoice information is consistent with the customs declaration information, to avoid the risk of tax correspondence investigation.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
From the perspective of supply chain planning, a flexible scheduling mechanism for bonded materials shall be established: First, when filing the processing trade manual, a certain proportion of materials can be reserved as "flexible inventory" to facilitate responding to temporary order modification requirements from clients; Second, you can cooperate with third-party bonded logistics enterprises to establish a partitioned storage mechanism for bonded and non-bonded goods. Once you need to convert the materials to general trade export, you can complete the warehouse transfer procedure quickly; Third, calculate the cost of converting bonded materials to general trade export in advance, including supplementary tax, logistics cost, time cost, etc., negotiate with the client to share part of the cost, so as to reduce the profit loss of the enterprise.