Materials

Materials (料件) is a core term in processing trade, referring to raw materials, parts, components, packaging materials, etc. that enterprises import from abroad to process into finished products for export. Its core feature is that customs duties and import taxes are temporarily exempted upon import, but the materials must be used to produce re-exported finished products and must not be sold domestically or diverted for other uses without authorization. Usage scenarios mainly involve processing trade manuals, electronic account book management, bonded supervision, etc. Notes: Enterprises must truthfully declare the name, specifications, quantity, and value of materials and accept customs verification; if finished products cannot be exported, taxes and deferred tax interest must be paid retroactively. Difference from other terms: Materials are different from 'general trade imported goods' (which require normal tax payment), and also different from 'domestic materials' (non-bonded, tax already included). Materials correspond to 'finished products' and form the logistics closed loop of 'import processing' or 'contract processing' in processing trade. In addition, materials can be subdivided into 'bonded materials' and 'non-bonded materials'; the former is subject to customs supervision, while the latter has no supervision restrictions. Understanding materials helps enterprises operate compliantly and avoid risks of smuggling or violations.