Customs Duty Relief for Manufacturing Processes

By Janel Rodriguez

If you are a manufacturer, you can save up to 150% on your inputs – those are the things that go into making your product.  That’s right, you may qualify for concessions and waivers from customs. Orane Thompson, Supervisor of the Jamaica Customs Agency (JCA)’s Incentive Unit told us more on #MoneyMovesJa. 

Thompson explained that the amended customs legislation doesn’t apply to manufacturers specifically, but to the processes they use. This means that you do not necessarily have to be a manufacturer to qualify for import duty relief. Instead of qualifying as an entity or individual, you can qualify if you are involved in an activity that is transforming a good. 

“Where your input is concerned, your raw material, packaging, and so on…if you’re going to use those inputs and create a new or distinct product, then you should qualify,” explained Thompson.

How do you qualify for Productive Input Relief?

“First, you make an application to the Ministry of Investment, Trade and Commerce through the Industry Division”, stated Thompson. “It moves from that point to JCA, and then both teams decide if the processes qualify,” he continued. If the applicant produces all documents, the process may take between 5-15 days.

Are you planning to start a manufacturing business? Thompson explained that you can apply for Productive Input Relief even if you haven’t started your business yet. 

“We want to make sure that the playing field is as level as possible, so persons who have the intent and the interest can also benefit,” he said. “For argument’s sake, you’re starting a company, you don’t have everything in place, but you may have the location or property…. You can make a business proposal, and you give it to the agency.  In that instance, you may get six months to one year to get everything in place”

What happens if you use the Items imported through Productive Input Relief for purposes not intended under the Act? According to Thompson, you’ll be breaching the Customs Act. Section 32 of the Act outlines that goods imported under concessionary benefit must be solely for the purpose intended. Even the declaration signed by the importer will state that the items will be used to manufacture a particular thing at a particular location. 

“It’s like a contract,” Thomson emphasized. “If the Commissioner of Customs determines that you can get the items locally or within the common market [CARICOM] at a reasonable price they have the right to say that you are not able to get that item,” he added.

Applying for Productive Input Relief can reduce your customs fees significantly. “It’s a very serious benefit,” Thompson said. “Duties are compounded so there are instances when manufacturers can save over 150% based on the fact that they have concessionary benefits.”

But with these benefits come responsibilities. The importer is responsible to : 

• Keep proper books/records of concessionary items imported.
• Allow the JCA to examine books/records/stocks of the organization.
• Ensure that proper documentary evidence and approval have been ascertained before transferring concessionary items.

Items eligible for Productive Input Relief include:

All raw materials 

Items that have not been transformed.

Intermediate goods 

Goods that have been somewhat processed but are going to be further processed

Consumables

Goods that are used in the production process but are not a final part of the product

Packaging

Materials used to contain, protect, identify, preserve or display primary products or manufactured goods.

Equipment and Machinery 

All the equipment, machinery, and spare parts that you will be using

If you are transforming a good, you may qualify for Productive Input Relief for manufacturers. As a registered manufacturer, you can save up to 150% when you compound the benefits of your cost, insurance and freight. That is more than enough reason to register ASAP. Visit https://www.jacustoms.gov.jm/  to find out more. You can reach the incentives unit directly at (876)-922-5141-9 or email them at incentivesinfo@jca.gov.jm

Visit EXIM Bank’s Business Advisory Service at:
https://eximbankja.com