State Council: 13 December 1993

Article 1 
All units and individuals engaged in the production, subcontracting for processing or the importation of consumer goods prescribed by these Regulations (hereinafter referred to as 'taxable consumer goods') within the territory of the People's Republic of China are taxpayers of Consumption Tax (hereinafter referred to as  'taxpayers') and shall pay Consumption Tax in accordance with these Regulations. 

Article 2 
The taxable items, tax rates (tax amounts) of Consumption Tax shall be determined in accordance with the  attached to these Regulations. 

Any adjustments to the Consumption Tax taxable items, tax rates (tax amounts) shall be determined by the State Council. 

Article 3 
For taxpayers dealing in taxable consumer goods with different tax rates, the sales amounts and sales volumes for the taxable consumer goods shall be accounted for separately. If the sales amounts and sales volumes have not been accounted for separately or if the taxable consumer goods with different tax rates are combined into a whole set of consumer goods for sales, the higher tax rate shall apply. 

Article 4 
Taxable consumer goods produced by the taxpayer shall be subject to tax upon sales.   For self-produced taxable consumer goods for the taxpayer's own use in the continuous production of taxable consumer goods, no tax shall be assessed; tax shall be assessed when the goods are transferred for other use. 

For taxable consumer goods sub-contracted for processing, the tax shall be collected and paid by the sub-contractor upon delivery to the contractor. For taxable consumer goods, sub-contracted for processing used by the contractor for the continuous production of taxable consumer goods, the tax paid can be credited in accordance with the regulations. 
Imported taxable consumer goods shall be subject to tax upon import declaration. 

Article 5 
The computation of tax payable for Consumption Tax shall follow either the rate on value or the amount on volume method. The formulas for computing the tax payable are as follows: 

The tax payable computed under the rate on value method  = Sales amount x Tax rate. 

The tax payable computed under the amount on volume method  = Sales volume x Tax amount per unit. 

For taxable consumer goods sold by taxpayers where the sales  amounts are computed in foreign currencies, the taxable amounts shall be converted into Renminbi according to the exchange rates prevailing  in  the  foreign exchange market. 

Article 6 
The sales amount as stipulated in Article 5 of these Regulations shall be the total consideration and other charges receivable from the buyer for the taxable consumer goods sold by the taxpayer. 

Article 7 
Self-produced taxable consumer goods for the taxpayer's own use that 
shall be subject to tax in accordance with the stipulations of the first paragraph in Article 4 of these Regulations shall be assessed according to the selling price of similar consumer goods produced by the taxpayer.  If the selling price of similar consumer goods is not available, the tax shall be assessed according to the composite assessable value.   

The formula for computing the composite assessable value is as follows:  
                                                    (Cost + profit) 
Composite assessable value = -----------------------------------
                                             (1-Consumption Tax rate) 

Article 8 
Taxable consumer goods sub-contracted for processing shall be assessed according to the selling price of similar consumer goods of the sub-contractor. If the selling price of similar consumer goods is not available, the tax shall be assessed according to the composite assessable value. 

The formula for computing the composite assessable value is as follows:  
                                               (Cost of material + Processing fee)  
 Composite assessable value = -------------------------------------------------  
                                                  (1 - Consumption Tax rate) 

Article 9 
Imported taxable consumer goods which adopt the rate on value method in computing the tax payable shall be assessed according to the composite assessable value. 

The formula for computing the composite assessable value is as follows:  
                                            (customs dutiable value + Customs Duty ) 
Composite assessable value = ------------------------------------------------------
                                                      (1 - Consumption Tax rate) 

Article 10 
Where the taxable value of the taxable consumer goods of the taxpayer is obviously low and without proper justification, the taxable value shall be determined by the competent tax authorities. 

Article 11 
For taxpayers exporting taxable consumer goods, the Consumption Tax shall be exempt, except as otherwise determined by the State Council.  The measures for exemption of exported taxable consumer goods shall be regulated by the State Administration for Taxation. 

Article 12 
Consumption Tax shall be collected by the   tax   authorities. Consumption Tax on the importation of taxable consumer goods shall be collected by the customs office on behalf of the tax authorities. 

Consumption Tax on taxable consumer goods brought or mailed into China by individuals shall be levied together with Customs Duty.  The detailed measures shall be formulated by the Tariff Policy Committee of 
the State Council together with the relevant departments. 

Article 13 
Taxpayers selling taxable consumer goods and self-producing taxable consumer goods for their own use, except otherwise as determined by the State, shall report and pay tax to the local competent tax authorities governing the taxpayers. 

For taxable consumer goods sub-contracted for processing, the Consumption Tax due shall be paid to the local competent tax authorities where the sub-contractors are located. 

For imported taxable consumer goods, the tax shall be reported and paid by the importers or their agents to the customs offices where the imports are declared. 

Article 14 
The Consumption Tax assessable period shall be one day, three days, five days, ten days, fifteen days or one month.  The actual assessable periods of the taxpayers shall be separately determined by the competent tax authorities according to the magnitude of the tax payable of the taxpayers; tax that cannot be assessed in regular periods can be assessed on a transaction-by-transaction basis. 

Taxpayers that adopt one month as an assessable period shall report and pay tax within ten days following the end of the period.  If an assessable period of one day, three days, five days, ten days or fifteen days is adopted, the tax shall be prepaid within five days following the end of the period, and a monthly return shall be filed with any balance of tax due settled within ten days from the first day of the following month. 

Article 15 
Taxpayers importing taxable consumer goods shall pay tax within seven days after the completion and issuance of the tax payment certificates by the customs office. 

Article 16 
The collection and administration of Consumption Tax shall be conducted in accordance with the relevant regulations of the (Law  of  the People's Republic of China on Tax Collection an Administration) and  these Regulations. 

Article 17 
The collection of Consumption Tax from foreign investment enterprises and foreign enterprises shall be conducted in accordance with the resolutions of the Standing Committee of the National People's Congress. 

Article 18 
The Ministry of Finance shall be responsible for the interpretation of these Regulations and for the formulation of  the  Detailed  Rules  and Regulations for the Implementation of these Regulations. 

Article 19 
These Regulations shall come into effect from January 1, 1994.  The relevant regulations of the State Council regarding the collection of Consumption Tax prior to the promulgation of these  Regulations  shall  be repealed on the same date. 

CONSUMPTION TAXABLE ITEMS AND TAX RATES (TAX AMOUNTS) TABLE 

Taxable Items    Scope of charge      Tax Unit    Tax Rate/Amount  

     Tobacco                                                            45%
1. Grade A cigarettes   Including Imported  
     cigarettes 

2. Grade B cigarettes                                                40%

3. Cigars                                                                  40%

4. Cut tobacco                                                         30% 

  Alcoholic drinks and alcohol 

1. White spirits made from cereal                              25% 

2. White spirits made from potatoes                          15%

3. Yellow spirits                                ton              240 yuan 

4. Beer                                              ton              220 yuan 

5. Other alcoholic drinks                                            10% 

6. Alcohol                                                                  5%  

  Cosmetics          Including  
                             cosmetics sets                              30% 

Skin-care and  
hair-care products                                                     17%  

  Precious jewelry  
  and precious jade  
  and stones       Including all  
                         kinds of gold,  
                         silver, jewelry,  
                         and precious  
                         stone ornaments                              10%  

  Firecrackers  
   and fire-works                                                       15% 

  Gasoline                                             litre          0.2 yuan  

  Diesel oil                                             litre         0.1 yuan  

  Motor vehicle tyres                                                 10%  

 Motorcycles                                                            10%  

  Motor cars 

1. Those with a cylinder 
  capacity (i. e. Emission                                            8% 
  capacity) of more than 
   2200ml (including 2200ml)  

   Those with a cylinder 
   capacity of between                                               5%  
   1000-2200ml 
   (including 1000ml)  

   Those with a  
   cylinder capacity                                                     3% 
   of less than 1000ml   

2. Cross-country vehicles 
   (four-wheel drive) 

Those with a cylinder
capacity of more than                                                 5%
2400ml (including 2400ml) 

Those with a cylinder 
capacity of less                                                          3% 
than 2400ml    

3. Minibuses and vans 
( less than 22 seats)  

Those with a cylinder 
capacity of more than                                                5% 
2000ml (including 2000ml) 

Those with a cylinder  
capacity of less                                                         3%