Customs Investor Facilitation Center's INFAC Scheme Details

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The INFAC Scheme, offered by the Customs Investor Facilitation Center, aims to implement import duty concessions for the textile and garment industry in Sri Lanka. Registered manufacturers, exporters, and service providers in the industry can benefit from this scheme by availing duty concessions on project-related machinery, equipment, parts, raw materials, and accessories. The application process requires justification of the registration need along with specific business details. Import duties are suspended at importation with VAT deferred and settled against exports on VAT credit vouchers issued by the Department of Inland Revenue.

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INFAC SCHEME INFAC SCHEME THE SCHEME OFFERRED BY CUSTOMS INVESTOR FACILITATION CENTER Thilak Arumapperuma Arachchi Superintendent of Customs Export Facilitation Unit Industries and Services Directorate Sri Lanka Customs

OBJECTIVE OBJECTIVE Implementation of import duty concessions announced in the Budget speech for 1998 (Gazette Extraordinary No. 1000/11 of 05/11/1997) by the Ministry of Industrial Development For the facilitation of textile and garment industry By providing import duty concessions for Project related machinery, equipment, parts Inputs including raw materials and accessories Packaging materials Subject to conditions laid down by the Secretary to the Treasury

FOR WHOM? FOR WHOM? Registered Manufacturers cum Exporters Registered exporters who uses imports to manufactures for export by a registered manufacturer Registered textile fabric/yarn/thread manufacturers/processors Providers of services such as washing plants, embroidery services, screen printing A Manufacturer in the Scheme is not entitled to operate under Customs Duty Rebate, Manufacture-in- Bond or any other such scheme in respect of an identical product

INFAC PROCEDURE INFAC PROCEDURE The import duties payable are suspended at importation on Bank/Personal guarantee being furnished VAT is differed at import and the same is settled against exports on VAT Credit Vouchers issued by the Department of Inland Revenue.

APPLICATION FOR APPLICATION FOR REGISTRATION REGISTRATION An application shall be made to the Director General of Customs Applicant is required to justify the need for registration under the scheme giving particulars: About the applicant Nature of business Kinds of inputs intended of import for manufacture of the export product(s) With documents in support of the same

DOCUMENTS DOCUMENTS REQUIRED REQUIRED Project Report Business Registration Certificate TIN & VAT Certificates from the IRD EDB Registration Certificate NIC & Passports of Signatory holders of CDP-1 Project approval from the SME & Apparel Export Division of the Ministry of Industry and Commerce, with warehouse code Application for registration under Customs Deferred Payment (CDP-1) in triplicate {VAT Act No. 14 of 2002} Power of Attorney (CDP-2) in duplicate Company Guarantee (CDP-3) (value > VAT for 6 month imports)

CONDITIONS OF APPROVAL (MIC) CONDITIONS OF APPROVAL (MIC) Confinement to the approved product Subject to approval from CEA Machinery to be new and modern Agreed annual production capacity Effective steps to use local materials All records on import/export to be maintained Summary of Export Declarations to MIC every month Subcontracting allowed with other INFAC/BOI operators Transfers on GRN Local disposal of rejects on approval of MIC and duty payable Progress report to MIC whenever required

NEW APPROVAL NEW APPROVAL Verification by Customs Premises where the processing will be carried out Accounting procedures used Obligations which must be fulfilled by the applicant The applicant shall Provide facilities for representatives of Director General o f Customs and/or Ministry of Industrial Development and/or Line Authority who may visit the factory or any other place of work or storage to ascertain the technical operations and/or obtain any information required by the Director General of Customs/Line Authority

GRANTING GRANTING APPROVAL APPROVAL If the application is acceptable to the Director General of Customs, a determination will be made as to the value of security required for the inputs to be imported (BG/PG) The application is then registered, with a Customs Registration number Approval is valid for one year

RENEWAL OF AN APPROVAL RENEWAL OF AN APPROVAL Renewal at the end of the year Process and stock verifications Performance verifications

ENTRY OF RAW ENTRY OF RAW MATERIALS MATERIALS Import Declaration (CUSDEC) Authenticated by Director/ Partner/ Proprietor/ any other persons duly authorized for the purpose and whose name and specimen signature are furnished

PROHIBITIONS AND RESTRICTIONS PROHIBITIONS AND RESTRICTIONS Imports subject to the prohibitions and restrictions Operators must ensure that necessary import licenses, approvals and permits are obtained prior to arrival of the goods (inputs)

ENTRY ON ENTRY ON IMPORT CUSDEC IMPORT CUSDEC Relevant Customs Office Code CBIF1 Customs INFAC Office Relevant Customs Procedure Code 7700 IMD: Direct import of raw materials VAT differed 7700 IMU: Direct import of raw materials VAT paid upfront Relevant Warehouse Reference Code XXXXXXXXX E.g. For exporter ABC Authenticated by Director/ Partner/ Proprietor/ any other persons duly authorized for the purpose and whose name and specimen signature are furnished

DISCHARGE DISCHARGE OF GOODS OF GOODS Export Declaration (CUSDEC) Goods Transfer Note (GRN) Authenticated by Director/ Partner/ Proprietor/ any other persons duly authorized for the purpose and whose name and specimen signature are furnished

DISCHARGE ON EXPORT CUSDEC DISCHARGE ON EXPORT CUSDEC Relevant Customs Office Code CBIF1 Customs INFAC office Relevant Customs Procedure Code 3277 INF: Re-Export under INFAC scheme Relevant Warehouse Reference Code XXXXXXXXX E.g. For exporter ABC Authenticated by Director/ Partner/ Proprietor/ any other persons duly authorized for the purpose and whose name and specimen signature are furnished

TRANSFER BETWEEN OPERATORS TRANSFER BETWEEN OPERATORS Transfer of semi-processed, processed or finished goods between authorized operators under Inward Processing Schemes Liability transfers from issuer to receiver An Indirect Export for the issuer An Import for the receiver Goods Received Note (GRN) prescribed form Receiver to certify the receipt on the form Payment in LKR (NON BOI) or in USD (BOI)