An official from a large Chinese steel scrap processing enterprise has stated that they have received information that the Chinese government will reintroduce a VAT refund policy for domestic steel scrap processing enterprises for 2013, with a VAT refund rate of 50 percent - as reported by Chinese media sources.
In 2009, China had implemented a VAT refund rate of 70 percent for domestic steel scrap processing enterprises, while for 2010 the VAT refund rate was reduced to 50 percent. However, from the beginning of 2011 the VAT refund for the enterprises in question was removed. China’s currently imposes 17 percent VAT on steel scrap.
The official said that the VAT refund will not be available to all domestic steel scrap processing enterprises. In March, the Chinese government is expected to release an initial list of large and medium-sized domestic steel scrap processing enterprises which will be able to avail of the VAT refund, and will subsequently issue further lists of enterprises approved for VAT refunds. The enterprises which are approved for VAT refunds will have to be in possession of licences issued by China’s Ministry of Industry and Information Technology (MIIT).
No export-linked prerequisite has been mentioned for the granting of the VAT refund.