China Tax & Investment Consultants Ltd

TURNOVER TAX

CONSUMPTION TAX (CT)

Legal authority

Decision of the Standing Committee of the National People's Congress on the Application of VAT, Consumption Tax, and Business Tax Tentative Regulations to foreign investment enterprises and foreign enterprises passed and announced on 29th December 1993
The PRC Consumption Tax Tentative Regulations, promulgated by the State Council on December 13, 1993 effective from January 1, 1994
Detailed Implementation Rules of the PRC Consumption Tax Tentative Regulation, issued by the Ministry of Finance on December 25, 1993 effective from January 1, 1994
The PRC Consumption Tax Tentative Regulations, promulgated by the State Council on November 10, 2009 effective from January 1, 2009 (Chinese)

Scope of activities subject to consumption tax

Anyone or work unit produces specified goods within the mainland China;
Anyone or work unit commission others with processing specified goods within the mainland China;
Anyone or work unit import specified consumer goods into Mainland China.

For that purpose, specified goods are listed in the table "Tax items and tax rates" below.
Tax items and tax rates

	Tax items	Scope of levy	Unit	Tax rate
1	Tobacco	Grade A cigarettes, including all kinds of imported cigarettes; Grade B cigarettes; Cigars; Cut tobacco		45% 40% 40% 30%
2	Alcohols and ethyl alcohol	Spirit distilled from grain Spirit distilled from potatoes; Yellow rice or millet wine; Beer; Other alcoholic beverages; Ethyl alcohol	Ton Ton	25% 15% RMB240 RMB220 10% 5%
3	Cosmetics, including sets of cosmetics			30%
4	Skin and hair care products			17%
5	Precious ornaments and precious stones including all sorts of gold, silver, jewellery			10%
6	Firecrackers and fireworks			15%
7	Gasoline Litre			RMB0.2
8	Diesel oil Litre			RMB0.1
9	Automobile tyres			10%
10	Motorcycles			10%
11	Small automobiles	Sedans; All-terrain vehicles; Mini-buses ** depending on cylinder capacity		10% 3% to 8% **