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Announcement of the State Administration of Taxation on Relevant Issues Concerning the Administration of Assessing the Taxable Value for Cigarette Consumption Tax Purpose

Document No.:Announcement No.32, 2017 of the State Administration of Taxation

Taxes:Consumption Tax

Date of Promulgation:

IssueDepartment:State Administration of Taxation

Date of Implementatio:2017-08-29


In order to further standardize the administration of the check and ratification of taxable value of cigarette consumption tax (hereinafter referred to as the “taxable value”), the relevant issues are hereby announced as follows:

I. With regard to cigarettes with new brands and specifications whose information has not been reported as required under the “Administrative Measures for the Collection and Assessment of Taxable Value Information about Cigarette Consumption Tax” (Issued by Order No.26 of the State Administration of Taxation, hereafter referred to as the "Measures"), the cigarette manufacturer, as a consumption taxpayer (hereinafter referred to as the “taxpayer”), may apply to the in-charge taxation authority for adjustments to the taxable value, after it has paid the consumption tax for one year in the amount computed on the basis of SAT-assessed taxable value. The in-charge taxation authority shall, within 15 days after receiving the application, submit the document for adjusting the taxable value to the State Administration of Taxation level by level. Within 30 days after the receipt of the document, the SAT shall adjust and issue the taxable value according to the sales price of the sales volume of the brand of cigarettes, which has been collected in the current period for six consecutive months.

II. Where any wrong information about the sales price specified in the “Detailed List of Monthly Sales by Cigarette Wholesale Enterprises” reported by a cigarette wholesaler results in the taxpayer's objection to the assessed taxable value, the taxpayer may apply to the in-charge taxation authority for adjustments to the taxable value from the date when such taxable value is applied. After receiving the application, the in-charge taxation authority shall verify the production and operation of the taxpayer's cigarette in the specification of the brand, calculate the weighted average selling price of cigarette in the specification of this brand since it was officially put into operation; for those who do need to adjust the taxable value, the in-charge taxation authority shall, within 25 days after receipt of the application, submit the document for adjustment of the taxable value to the State Administration of Taxation level by level. After receiving the document, the SAT shall re-collect the sales price of the cigarette in the specification of the brand at the stage of wholesale, the collection period shall be 6 months after the date of the implementation of the approved taxable value; the taxable value shall be adjusted and issued after the expiration of the collection.

III. If the taxpayer applies taxable value of cigarettes of other brands, specifications, which results in less payment of consumption tax, the in-charge taxation authority shall, while adjusting the taxable income of a taxpayer in according with provisions of Article 18 of the “Measures”, determine the taxable value based on both the retail price collected at which cigarettes of the said brands and specifications are sold in the market and the minimum wholesale gross profit rate, in order to pursue the unpaid consumption tax from the taxpayer.

IV. The announcement shall come into force on October 1, 2017.

The announcement is hereby notified as above.

State Administration of Taxation
August 29, 2017

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