(c) Method of Computation

* For tax payable by volume, the sales volume is used as the basis:

Tax payable = sales volume * tax amount per unit

* For tax payable by value, the sales value is used as the basis:

Tax payable = sales value (or import value) * tax rate

* For tax payable under the combination of by volume and by value:

Tax payable = sales volume * tax amount per unit +sales value * tax rate

(d) Tax Liability and Payment Period

In the sale of taxable consumer goods, the consumption tax liability arises on the day the taxpayer receives full payment for the transaction or obtains a payment voucher for the transaction. In the import of goods, it arises on the day of customs declaration.

The consumption tax payment period may be one day, three days, five days, ten days, fifteen days or one month, to be determined by the competent tax authorities based on the amount of consumption tax payable by the taxpayer.

3. Customs Duty

Customs duty is levied by Customs on commercial commodities or articles entering or leaving China's national boundaries or customs territories.

(a) Taxpayer

Payers of customs duty on commercial commodities are consignees of imports and consignors of exports. The former have to pay import tariffs while the latter have to pay export tariffs. Payers of customs duty on articles include: incoming passengers carrying personal luggage and articles, service attendants on different modes of transport carrying personal articles, owners of gifts and personal articles that enter China through other means, and addressees of incoming personal mail.

(b) Tariff Rates

China adopts a two-column tariff for imports: a general rate and a preferential rate. The general tariff rate applies to goods from countries and regions that have not signed reciprocal tariff agreements with China, while the preferential tariff rate applies to goods from countries and regions that have signed such agreements with China. The current average import tariff rate of China is 10.4%. For exports, tariffs range between 0% to 20%.

(c) Dutiable Value

The dutiable value of imported goods in general is their CIF price while the dutiable value of exports is their FOB price.

(d) Method of Computation

Customs duty payable is calculated by multiplying the dutiable value and quantity of the goods imported or exported by the applicable tax rate or tax amount. The formula for calculating the amount of customs duty payable is as follows:

Duty payable = quantity of taxable import or export * unit dutiable value * applicable tax rate or

Duty payable = quantity of taxable import or export * applicable standard tax amount

(e) Payment of Customs Duty

Taxpayers or their agents should make payment at designated banks within 15 days from the date of issuance of the customs duty payment notice by Customs.