The Government Information Center

                                        Ministry of Finance
                            Sri Lanka Customs Department

Facilitation for Investors - TIEP 1
Inward Processing Scheme for Temporary Importation for Export Processing (TIEP – 1)

Inward Processing
Goods can be imported conditionally relieved from payment of import duties and taxes, on the basis that such goods are intended for manufacturing, processing or assembling and subsequent exportation.

TIEP (Temporary Importation for Export Processing – I)

• A major Scheme to facilitate exporters / manufacturers to produce goods at lower cost and compete in global market.
  
• We encourage small and medium entrepreneurs to make use of this facility to enhance productivity.
  
• The Scheme facilitates manufacturers to obtain their requirements of imported inputs without placing those in a Customs bonded warehouse.
  

Who are permitted to operate

Direct Exporters
Manufacturers who manufacture goods for exports

Indirect Exporters
Manufacturers who produce goods as inputs for other industries manufacturing goods for export.

• An operator utilizing the Scheme to manufacture any product for export shall not be entitled to operate under Duty Rebate Scheme, Manufacture-in-Bond Scheme or any other Scheme for the Temporary Importation of Inputs for manufacture and export of an identical product.

Indirect exporter can supply goods to following direct exporters

• Customs approved Bondsman.
• TIEP Certificate holder
  
• BOI enterprises approved under section 17 of the BOI Act (within zones / outside zones)
  
• Customs approved industries who are operating under infac (Investor Facilitation Centre) procedure.
  

Inputs permitted to import

• Raw materials, components and parts which will be incorporated in the export product.
• Part for assembly of the product to be exported.
  
• Consumable such as catalysts, acceleration and chemicals.
  
• Packaging materials in finished form such as labels, stickers, tags etc…..
  
• Raw materials for the manufacture of such packaging materials.
  
• Export catalogues and brochures.
  

Documents needed for registration

• Duly completed prescribed form (TIEP 1) in triplicate.
• Project report.
  
• Certificate of VAT Registration. Business Registration (form 65)
  
• Memorandum of Article (Form 48)
  
• Data required for evaluating the conversion ratio and wastage factor
  
• (They should be recommended by the Ministry of Industries or other relevant line authority)
  
• Other necessary approvals (Tea Board, Coconut Development Board etc..) wherever applicable.
  

All TIEP approvals are required to be renewed annually.
 

Security for the liabilities (duties and taxes)
In the case of an exporter with a good track record, a personal / corporate guarantee may be accepted to cover the full value of duties and taxes leviable on the imported goods that may be in stock at any given time.

However, the Director General of Customs reserves the right to call for a Bank Guarantee up to 100% as security limit in the case of any default / unsatisfactory performance etc….

Cancellation of Liability

1. Producing export Cusdec by direct exporters.
   
2. Producing following documents by indirect exporters.
   

• Goods Received Note (GRN) fir supplies to another TIEP holder and BOI enterprise located within zones.
• GRN together with VAT invoice for supplies to BOI enterprises located outside zones and INFAC operators.
• Special permission should be obtained from the Director General of Customs for disposal of unutilized inputs or finished products to the local market on payment of applicable duties and taxes.
  
  
  More About the Scheme
  
  The Scheme for Temporary Importation for Exports is governed by the Gazette Notification No. 1053/11 of 11.11.1998 published under Section 22A of the Customs Ordinance.
  
  
  General Instructions to an Operator
  Under TIEP 1 Scheme
  
  

1. This approval granted to you under TIEP 1 Scheme is valid for one year unless the period is not specifically mentioned. You should apply for the renewal of the same well in time on payment of applicable fees. The renewal will be granted on satisfactory performance based on the stock and register verifications done by Customs staff. However, if the renewal application is in respect of the same goods, you need not obtain a fresh recommendation from the line Ministry/Authority.
   
2. You are permitted to import and export only the items approved by Customs under the HS Codes declared by you. If you require to import / export any other item, a separate approval has to be obtained for same.
   
3. You are permitted to utilize the imported inputs under this scheme only for export purposes or supply to direct exporter / deemed exporter who are registered with Customs Bonds Division.
   
4. You are required to furnish a Bank / Exporter Guarantee is determined by Customs to secure Customs liabilities for a period of one year. It is your responsibility to renew above guarantee one month prior to the date of expiry.
   
5. As TIEP operator you are not permitted to operate under any other export facilitation schemes in respect of identical products or to engage in any other transaction related to this operation without prior approval of Customs.
   
6. You should provide facilities for representatives of Director General of Customs who may visit your factory or any other place of work or storage to ascertain the technical operation and / or to obtain any information required by Director General of Customs at any time.
   
7. You should mark and stack the inputs, imported under this scheme in such a manner for easy identification, checking and accounting
   
8. You shall re-export unutilized period under such terms and conditions as determined by Director General of Customs.
   

TIEP 1 – Registration

01. Register only 100% Export Items
02. Documents to be submitted to the DDC

• Duly completed prescribed form (TIEP-1) triplicate
• Project Report
  
• Certificate of VAT Registration
  
• Business Registration (form 65)
  
• Memorandum of Article (form 48)
  
• Date required for evaluating the conversion ratio and wastage factor (They should be recommended by the Ministry of Industry or other relevant line authority)
  
• Other necessary approvals (Tea Board, Coconut Development Board etc)Wherever applicable.
  
• Request Letter
  
• EDB approval
  
• Two I.D copies of Directors
  
• All TIEP approvals are required to be renewed annually.
  

03. Information Sheet has to be prepared
04. Registration Fee 3000/=
05. Send a request letter to Shroff with 2 copies to get chopped
06. Register in the TIEP-1 Book for File No
07. Agreement has to be signed out with Director/Proprietor (2 copies)
08. TIEP-1 registration book
09. 3 Applications get signed by SC
10. Validity period (for one year) has to be given
11. Original copy attached to the file and 2 copies will be given to owner
12. Update the TIEP – 1 details book

TIEP 1- RENEWAL

1. Request Letter
2. Send to DC for obtaining system audit (S/A) report
3. Renewal Charges 2000/= per year
� � � � � � � � � � � � � � � 4000/= OE per year
4. System Audit Report need to be sent to DDC (Monitoring) for Verification.
5. Get details about pending/registered cases against the Company from the Bonding Investigation Unit (BIU)
6. Inspection Report to DDC’s Approval
7. Update TIEP 1 Entry Book
8. SC Sign Out as “Valid up to ……date” (for the one year period)