Inward processing

The concept

 

The inward processing activity means the treatment of imported goods which have been, directly or indirectly, made available to the user of the authorization  for the processing, in accordance with the specifications and directives, and for  the account of an ordering party established in a third country, where payments usually include only the costs of processing.

 

In the Serbian customs territory the procedure of inward processing, including the use of equivalent imported goods (Article 144 of the Customs law) may be authorized:

1. under the system of postponing , which means  that on foreign goods for re-exports in a form resulting from an inward processing ( hereinafter referred to as compensating products), neither  customs duties nor trade policy measures are applicable, or
2. under the system of drawback, which means that foreign goods are released for free circulation after the duties were paid and that the holder of the authorization has the right to repayment of the customs debt, or the remission of the customs duties, providing the goods were exported from the customs territory in the form resulting from an inward processing procedure.

Compensating   products means all products obtained in an inward processing. Besides the main compensating products, for which the procedure was authorized, secondary goods, necessarily emerging during the processing, can also be obtained. They shall be enumerated in the authorization. Losses may also occur in the processing, if the goods are completely destroyed or definitively lost. 

 

The working of goods procedures

 

Within an inward processing procedure the following activities may be done:

1. the working of goods, including erecting or assembling them or fitting them to other goods,
2. the processing of goods,
3. the repair of goods, including restoring them  and  putting them in order, or
4. the use of certain goods, defined by the Government, which are not to be found in the compensating products, but which allow or facilitate the production of those products, even if they are entirely or partially used up in the process, except the following goods:

• fuel or other energy sources, other than those needed for the testing of compensating products, or for determination of errors in  the repair of specific imported goods,
• lubricants, other than those needed for the testing, adjustment and withdrawal (return) of compensating  products,
• equipment and tool.