China´s Ministry of Finance, General Administration of Customs and the State Administration of Taxation jointly released the Notification Regarding the Interim Provisions about the Adjustment of Major Technological Equipment Import Tax (the Notification), modifying the preferential scale and magnitude about the import tax of some specific major technological equipment. Automatic winders (excluding Spinning - Winding Unit) and air-jet loom were listed in the Equipment and Product Catalogue Relieved of Import Tax Free Privilege (2010 amendment) and will not enjoy preferential policies of free import tax and free VAT generated during the import.

According to the Notification, the Nationally Encouraged Major Technological Equipment and Product Catalogue (2010 amendment) and the Import of Major Technological Equipment Key Parts and Raw Material List (2010 amendment) have taken effect on April 25, 2010. Qualified products will enjoy import tax and VAT free privilege. The product range of novel textile machinery types was not adjusted. The import of automatic winder key parts viz. electronic yarn clearer, air splicer, mechanical splicer, grooved drum and high-speed air-jet loom key parts viz. electronic dobby device, positive cam open device, electronic jacquard device, heald frame, reeds and the key parts and materials of polyester staple fiber machines, high-speed continuous viscose filament machines, high-efficiency cotton spinning machines and electromechanically integrated rapier loom will still enjoy import tax and VAT free privilege.

The Equipment and Product Catalogue Relieved of Import-Tax- Free Privilege (2010 amendment) have taken effect since April 26, 2010. All equipments and components, accessories listed will be levied import tax. Automatic winders (excluding Spinning - Winding Unit) and air-jet loom were listed and will no longer enjoy the import tax free and VAT free privileges.

Professionals believe that imported automatic winders and air-jet looms could be partially replaced by domestic products and therefore necessary to abrogate the import tax free policy. Many key parts of the aforementioned two machine types, however, are not localized and remain dependent on import therefore still enjoy tax free policies.

Source: China Textile Leader