1. Spice & Allied Products Producers’ & Traders’ Association
THE TIEP SCHEME At
Ceylon Chamber Of Commerce
For
Spice & Allied Products Producers’ & Traders’ Association
THILAK ARUMAPPERUMA ARACHCHI
Superintendent of Customs
Export Facilitation Unit
Industries and Services Directorate
Sri Lanka Customs

2. TIEP SCHEME
One of the several Inward Processing Schemes (IP) offered by Sri Lanka Customs

3. IP - SCHEMES OFFERED BY CUSTOMS
TIEP-I (Temporary Import for Export Processing-I)
The Government Extraordinary Gazette No. 1053/11 of 11/11/1998
Raw materials, parts, consumables, packaging materils
TIEP-IV (Temporary Import for Export Processing-IV)
Section 22A of the Customs Ordinance
Plant, machinery, equipment and parts etc to be used in the export processing
To encourage expansion of production capacities and exports
INFAC
Apparel Industry
Fabric, accessories, ancillaries, Machinery
Entrepôt
Import of goods for re-export to a third party

4. TIEP - FACILITIES ENTERPRISES Permitted for duty exemption
Finished Goods
DEEMED EXPORT
Imported
EXPORTER AUTHORISED UNDER IP
Processing
Assembly
Manufacture
Raw materials/Consumables
/Packing materials
Plant/Machinery/Parts
DIRECT EXPORT
Local
Finished Goods
Semi Finished Goods
Packing materials
INDIRECT EXPORT
FINAL EXPORT
EXPORTER AUTHORISED UNDER IP
EXPORT ORIENTED BOI VENTURE

5. TIEP BENEFITS Reduced cost of production of the export products
Re-export with value addition
Increased competitiveness in the international market
Exploit the country’s potential in international maritime network
Enhanced trade flow between countries

6. TIEP-I FOR WHOM? Direct Exporters Indirect Exporters
Who manufactures and exports
Indirect Exporters
Who manufactures and supply for others to further process and export
Customs approved manufacute-in-bond
TIEP operator
BOI enterprise under Section 17 of BOI Act
INFAC operator
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

7. TIEP-I PROCEDURE
At IMPORT Fiscal Levies are suspended and Debited against security in the form of Bank Guarantees or Corporate Bonds to cover the unpaid (suspended) import duty.
At EXPORT, Credits granted on Security
VAT is differed at import for those registered under the VAT Deferred Payment Facility and the same is settled against exports on VAT Credit Vouchers issued by the Department of Inland Revenue.

8. PERMITTED IMPORTS OF INPUTS
Raw-materials, Components and Parts which will be incorporated in the exported product;
Parts for assembly of the product to be exported;
Consumables such as Catalysts, Accelerators, Processing Chemicals, Lab Chemicals, Research Chemicals, and Retarders of chemical reaction to be used in the product to be exported;
Packing material including labels, stickers and tags to be used for packing the export products, raw materials for the manufacture of such packaging material and export catalogues and brochures

9. APPLICATION FOR REGISTRATION
An application shall be made to the Director General of Customs
Applicant is required to justify the need for registration under the IP 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

10. DOCUMENTS REQUIRED
Duly completed prescribed form (TIEP-I) in triplicate with MIC approval
Project report
Certificate of VAT Registration
Business Registration /Certificate of Incorporation
Memorandum of Article
Data required for evaluating conversion ratio and wastage factor
Other necessary approvals (Tea Board, Coconut Development Board etc.)

11. TIEP-I APPLICATION FOR INPUTS
The operator shall apply in the Application form for Inward Processing (form TIEP-I)
The requirements of Inputs for a period not more than twelve months or for specific/single consignment;
Data required for evaluating conversion ratio;
Wastage factor, wherever applicable
A sample of the product, if required by the Director General of Customs for the processing of the application

12. CONVERSION RATIO AND WASTAGE
Determined by the Director General of Customs in consultation with the Ministry of Industry and Commerce or any other Line Authority wherever necessary.
Therefore the duly filled application forms shall be submitted to the Development Division of the MIC for approval prior to submitting the same to Customs

13. NEW APPROVAL Verification by Customs The applicant shall
Premises where the processing will be carried out
Accounting procedures used
Obligations which must be fulfilled by anyone availing of IP
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

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

15. SECURITY
Once an Approval is granted operator shall furnish Bank Guarantee equal to the value of duties and other taxes levyable on the input that may be in stock at any one time.
The validity of any Guarantee or Bond is not less than twelve months or for such period as determined by the DGC

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

17. ENTRY OF RAW 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 17

18. 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)
Examples:
 Import Control Regulations
Ministry of Defense Approvals
Department of Agriculture
National Plant Quarantine Service
Department of Animal Production and Health
Cashew Corporation etc.

19. ENTRY ON IMPORT CUSDEC Relevant Customs Office Code
CBBD1 – Customs Industries and Services Directorate
Relevant Customs Procedure Code
7700 TRD: Direct import of raw materials VAT differed
7700 TRU: Direct import of raw materials VAT paid upfront …
Relevant Warehouse Reference Code
– 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

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

21. DISCHARGE ON EXPORT CUSDEC
Relevant Customs Office Code
CBBD1 – Customs Industries and Services Directorate
Relevant Customs Procedure Code
3277 T1E: Re-Export under TIEP-1 scheme
Relevant Warehouse Reference Code
– 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

22. TRANSFER ON GRN
Supply of semi-processed, processed or finished goods to:
Other authorized exporters
Enterprises having BOI Status under Section 17 of BOI Act
for Export
For Project Related Goods (if entitled to import free of Fiscal Levies)
Recipient has to certify the receipt
Receipt of payment in LKR (NON BOI) in USD (BOI)

23. DISCHARGE OF LIABILITIES: Direct Export
Within 30 days from re-export
Final bill of lading/airway bill certified by the Shipping Agent
Parties Copy of the CusDec
Export invoice with bank confirmation on inward remittance
Customs Warehouse Keeping Unit (WHK)
Outward entries are made in the Bond Register
Issue write-off-note (THINETH)
Endorse “Cancellation Allowed” on the Export CusDec

24. DISCHARGE OF LIABILITIES: Indirect Export
Within 30 days from re-export
Duly acknowledged GRN
Invoice
Customs Warehouse Keeping Unit (WHK)
Outward entries are made in the Bond Register
Issue write-off-note (THINETH)
Endorse “Cancellation Allowed” on the GRN

25. DISCHARGE OF LIABILITIES: Deemed Export
Within 30 days from re-export
Duly acknowledged GRN
With endorsement by the BOI that goods have been duly received
If non-BOI, letter of authority for duty free import/local purchase
Invoice
Customs Warehouse Keeping Unit (WHK)
Outward entries are made in the Bond Register
Issue write-off-note (THINETH)
Endorse “Cancellation Allowed” on the GRN

26. RELEASE FOR HOME USE Not permitted Only on exceptional circumstances
Customs Duty and levies are payable
Waste is permitted on payment of Customs Duty and levies if any

27. Relaxed for PRODUCTIVITY Aimed at PROGRESS
ECONOMIC IMPACT
Offered in GOOD FAITH
Implemented in TRUST
Relaxed for PRODUCTIVITY
Aimed at PROGRESS

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