Industrial Rebates for Manufacturers

Last Updated: 14 August, 2023 - Print

The General Public is hereby reminded of the following Industrial Rebate procedures:-

INDUSTRIAL REBATE SCHEME

The general pattern of the Industrial Rebate Scheme is that various types of industries are approved for rebate, and specified materials for use in a particular industry may be imported, or delivered from an excise factory, at reduced (i.e. rebated) rates of duty.

Once an industry has been approved, manufacturers may apply for registration in that industry in order to take advantage of the rebates on the materials. The specified industries and the materials are in Appendices A (rebates of customs duties) and B rebates of excise duties) of the Eighth Schedule to the Customs and Excise Regulations.

INDUSTRIES AND MATERIALS NOT ALREADY APPROVED

Any manufacturer in an industry not already approved for rebate considers that he should be given tariff concessions in order to render the industry viable, or if any manufacturer in an industry already approved considers that there should be additions to the list of materials granted rebate of duty, the manufacturer, should apply to the Commissioner General at Private Bag 247, Blantyre. The manufacturer should comply with the procedures in the following paragraphs.

APPLICATIONS FOR APPROVAL AND/OR REGISTRATION

All applications whether for approval of an industry and registration or for registration in an industry already approved must be made on Customs Form Number 81. This form is obtainable from the local Station Manager, Customs and Excise or Head Office.

The application must be supported by a letter setting out in detail the reasons for the application. The forms must be completed and submitted in quadruplicate. When completing the forms, applicants should liaise closely with the local Station Manager who will provide assistance towards recording the particulars required.

NOTIFICATION OF DECISION

After necessary enquiries have been made by officers of the Customs and Excise Division and the Ministry of Finance, the decision will be conveyed to the applicant. If necessary, additions will be made to the Appendices of the Eighth Schedule to the Customs and Excise Regulations by Government Notice published in the Supplement to the Gazette. The Government Notice will specify the date from which the additions become operational.

BOND

Each manufacturer under rebate must enter into bond on form No.123 for due observance of the law relating to industrial rebate. The surety to the bond must be a bank or insurance company established in Malawi. The penal sum, which should be agreed with the local Station Manager, must be not less than the full duty represented by the rebated materials likely to be in stock at any one time.

REGISTRATION FEE

The annual registration fee, payable to the Commissioner General at initial registration and not later than 31st December each year in respect of the following year, is K5, 000. If the initial registration takes place after 30th June, the fee for that year is K2, 500 only. If a manufacturer is registered in more than one industry then each industry must pay a separate registration fee.

REBATE STORE

Each manufacturer registered under rebate must provide on his premises a secure store for the storage of rebated materials pending manufacture. Fastenings must be provided so that the store may be secured with a Customs lock should it ever be considered necessary. All rebated materials must be deposited directly into the store upon receipt and must not be removed there from other than for manufacture, except with the permission of the Station Manager. No goods other than rebated materials may be stored in the rebate store.

STOCK BOOK

The rebate manufacturer must provide a Stock Book in which he must maintain the records of all receipts of rebated materials, their disposals to manufacture and the final disposals of the finished articles.

ENTRY OF MATERIALS FOR INDUSTRIAL REBATES

All goods claimed to be eligible for rebate must be entered on Form No. 12 whether at direct import or from a bonded or excise warehouse.

DIVERSION OF REBATED MATERIALS

If it is desired to divert rebated materials from the purposes for which rebate was granted, the owner must apply to the Commissioner General of the Malawi Revenue Authority through the Station Manager, for permission. If the permission is granted, the owner must submit to the proper officer a post entry on Form No.12 and pay the full duty and VAT to which the goods are liable.

TRANSFER OF REBATED MATERIALS TO ANOTHER MANUFACTURER UNDER REBATE

If it is desired to transfer rebated materials to another registered manufacturer the owner should complete form No. 86 and submit to the Customs office for authorization. The Declaration on form Number 86 must be signed by the new owner and returned to Customs within 14 days from the date of authorization. The transfer should be recorded in the Rebate Stock Book, of both the old and new owners and the latter will then become accountable to the Customs for proper disposal of the materials.

WASTE MATERIALS

If it is desired to dispose of waste rebated materials (e.g. off-cuts and the like) for any purpose other than manufacturing, application should be made to the Commissioner General who, if satisfied as to the intended disposal, may allow such disposal without the payment of further duty.

OFFICERS' POWERS OF INSPECTION

An officer in the course of his duty may inspect the registered manufacturer’s premises, plant, operations and records at any reasonable time and the manufacturer must render him all necessary assistance in the performance of his duties. If the officer considers it necessary, the manufacturer must carry out any particular process or part of any process under the officer’s supervision.

COMMISSIONER GENERAL’S POWER TO REVOKE OR TO REFUSE RENEWAL OF REGISTRATION

If the Commissioner General is satisfied that the registered manufacture is not carrying out the requirements of the Customs Law and of this Notice concerning materials imported or acquired at rebated rates of duty, he (the Commissioner General) may revoke or refuse renewal of the registration. In such cases, unless the rebated materials on hand have not yet been used in manufacture the materials may be transferred to another manufacturer. The manufacturer must, within such period as the Commissioner General may direct, submit a declaration and pay the full amount of duty due. If he neglects or refuses to do this, the duty will be demanded from the surety in terms of the bond and the goods may be removed to the Customs Warehouse.

MANUFACTURER VOLUNTARILY CEASING BUSINESS

If a manufacturer registered under rebate intends to cease the manufacture of the type of goods for which rebated materials may be used, he must advise the Commissioner General and, unless rebated materials on hand are transferred to another registered manufacture, submit to the Station Manager a declaration in respect of all unused rebated materials and pay the full duty due.

If further clarification is required, you may contact our Technical Division at Msonkho House on phone numbers 01 832740 and 01 832738 or come in person.