TIEP-I SCHEME

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Inward Processing

THE SCHEME

TIEP-I Scheme is one of a number of Customs Relief Procedures provided for in legislation of Sri Lanka.

It permits the import, of materials as inputs, relieved from payment of fiscal levies on the condition that such materials are used for the processing of products for export.

The processing may include from simple sorting, assembly, packaging to complicated manufacturing.

OBJECTIVES


  • Lowering the cost of production of export products
  • Improve the productivity of the small and medium entrepreneurs
  • Facilitation of storage of inputs and manufactured articles in the exporters own warehouse without placing them in a Customs bonded warehouse
  • Facilitation of supporting industries
WHO IS ELIGIBLE

Direct Exporters - Manufacturers who produce goods intended for export under inward processing scheme and ship the same to another country for export.

Indirect Exporters - Manufacturers who produce goods intended for export but only supply them to another eligible party for further processing and finally exports.

Note: A Manufacturer cum Exporter/Indirect Exporter utilizing the Scheme to manufacture any products for export shall not be entitled to operate the Scheme for Customs Duty Rebate, the Scheme for Manufacture-in-Bond for Export or any other Scheme for the Temporary Importation of Inputs for manufacture and export in respect of an identical product.

PERMITED INPUTS


Raw-materials, Components and Parts which will be incorporated in the exported product; Parts for assembly of the product to be exported;

Consumables such as Catalysts, Accelerators, Processing Chemicals, Lab Chemicals, Research Chemicals, and Retarders of chemical reaction to be used in the product to be exported;

Packing material including labels, stickers and tags to be used for packing the export products, raw materials for the manufacture of such packaging material and export catalogues and brochures.

STEPS TO OBTAIN THE FACILITY
  • Compile a comprehensive report on the project.
  • Obtain a copy of the APPLICATION FORM FOR INWARD PROCESSING (TIEP-I form) and duly complete the same.
  • Obtain necessary approvals from line authorities [Tea Board, Coconut Development Board etc….] wherever applicable.
  • Obtain approval from the Ministry of Industry and Commerce on the Consumption Ratio and Wastage on the TIEP-I application form.
  • Submit following documents to Customs for registration Letter of request for registration Duly completed prescribed form [TIEP- I] in triplicate.
  • Project Report
  • Certificate of VAT registration.
  • If incorporated under the Companies Act No. 7 of 2007
  • Certificate of Incorporation (Form 2A/Form 41 - The Companies Act No. 7 of 2007)
  • Change of Director/Secretary and Particulars of Director/Secretary (Form 20 - The Companies Act No. 7 of 2007)
  • Articles of Association (First Schedule - The Companies Act No. 7 of 2007)
  • If registered under Business Names Statutes of respective provinces
  • Certificate of Registration of an Individual Business
  • Certificate of Registration of a Firm.
  • Necessary permits/ approvals Registration with Export Development Board as an Exporter.
  • Certified Copies of national identity cards of two directors Enter into agreement with Custom.
  • Collect approved copies of the TIEP-I form (two copies.
  • Furnish securities as required by Custom.
SECURITY FOR THE LIABILITIES (DUTY AND LEVIES)


In the case of an exporter with good track record, a personal/corporate guarantee may be accepted to cover the full value of duties and taxes leviable on the imported goods that may be in stock at any given time.

However, the Director General of Customs reserves the right to call for a Bank Guarantee up to 100% as security limit in the case of any default/unsatisfactory performance etc.

DISCHARGE OF LIABILITIES


Import liabilities are written off as an when exports are taken place, on the production of proof of export.

Direct Exporters are required to produce Export Customs Declaration together, shipping documents, confirmation on inward remittance together with Material Utilization Declaration (MUD).

Indirect Exporters are required to produce Goods Received Notes (GRN) duly certified by the enterprise receiving the goods, together with Invoice, in the case of supplies to another TIEP holder or BOI enterprises located within zones.

In the case of supplies to BOI enterprises located outside zones and INFAC operators, GRN and a VAT invoice have to be produced.