One of the main goals is to increase exports due to inland processing customs procedure
Bakhtiyar Aliyev, head of the Industry Department of the Ministry of Economy, gave an interview to the media about the special customs procedure for internal processing.
Mr. Bakhtiyar, what is the special customs procedure for inward processing and what does this procedure give to entrepreneurs?
Inward processing special customs procedure consists of bringing certain goods to the territory of our country without paying customs duties and taxes, including VAT, for the purpose of export after processing operations. The placement of goods under a special customs procedure is carried out for the purpose of repair and processing in Azerbaijan. This, in turn, creates conditions for the development of the processing and service sector, stimulation of export activity.
The application of the "Rules for placement of goods under special customs procedure for inward processing" has many benefits for entrepreneurs. One of the main goals of the state here is to increase exports at the expense of domestic processing customs procedure. The procedure significantly increases the export possibilities of business subjects. Entrepreneurs can import raw materials from different countries based on their free choice without paying VAT and customs duty. They export their processed products at the next stage to other countries at competitive prices. Entrepreneurs also get the opportunity to perform more competitively in international tenders with the application of the procedure.
We know that certain changes were made in 2022 and last year to the rules for placing goods under the special customs procedure for internal processing. What positive changes has this in turn led to?
The changes you mentioned were made in order to make the procedure more effective and facilitate the business activities of entrepreneurs. As a result of the changes, the owner of the procedure gets the opportunity to bring raw materials or materials from any country to the country and export them to any buyer in any country by processing them within the time frame stipulated by the legislation, as well as on the basis of the purchase and sale agreement. In addition, the provision of mandatory security for the payment of customs debt has been eliminated, and the documentation process for obtaining a permit to use the procedure has been simplified.
The positive effects of the changes made to the rules are also manifested in the fact that the procedure was started to be used more actively in May 2022, after the oblivion of the guarantee requirement was removed. At the same time, new enterprises that could not use the internal processing regime in the previous periods joined the process in April 2023, after the creation of the opportunity to use the procedure on the basis of the purchase agreement. And this is an important factor in the expansion of export activity in general.
What increase has occurred in the value of goods placed under the inward processing customs procedure?
Calculations show that the value of goods placed under the inward processing customs procedure has increased year by year. There was an 85% increase in 2023, compared to 2022, in the value of goods imported for domestic processing for export, and a 77% increase in the number of companies using the procedure.
Entrepreneurs can apply to the State Customs Committee directly or to local customs authorities to use the procedure.
