Research Paper

Final Research Report
Full Name Khanh Tran Quoc Nguyen

University Saxion University of Applied Sciences Deventer
Student Number 307495
School School of Marketing and international Management
Course IBMS
Supervisor Mr. Roel Rietberg
Saxion Hogeschool International Business and Management(IBMS)
Course Director
Company Mr. Garry van Delden
Mentor Checkpoint System Terborg Supply Chain Manager
Internship May 6, 2013-October 6,2013
Period
Report No. Report Version 2.0
Date 4/10/2013
1
Table of Contents
1. Introduction.......................................................................................................................................... 5
2. Checkpoint 2012 Shipments Overview ........................................................................................... 5
2.1. Terminology................................................................................................................................. 5
2.2. General Information ................................................................................................................... 6
2.3. China ............................................................................................................................................ 9
2.4. India ............................................................................................................................................ 10
2.5. Bangladesh ............................................................................................................................... 12
2.6. Turkey ........................................................................................................................................ 13
2.7. Conclusion ................................................................................................................................. 15
3. Research Objective A: Commodity Code (HS Code), Import Duty and Tax Charges Due
and Non-Recoverable Costs .................................................................................................................. 16
3.1. Harmonized Commodity and Coding System (HS Code) .................................................. 16
3.1.1. Terminology........................................................................................................................... 16
3.1.2. General Information ............................................................................................................. 16
3.1.3. China ...................................................................................................................................... 17
3.1.4. India ........................................................................................................................................ 18
3.1.5. Bangladesh ........................................................................................................................... 19
3.1.6. Turkey .................................................................................................................................... 20
3.1.7. Conclusion ............................................................................................................................. 21
3.2. Import Duty & Tax Charges Due ............................................................................................ 21
3.2.1. Terminology........................................................................................................................... 21
3.2.2. General Information ............................................................................................................. 22
3.2.3. China ...................................................................................................................................... 24
3.2.4 India ........................................................................................................................................ 26
3.2.5 Bangladesh ........................................................................................................................... 29
3.2.6 Turkey .................................................................................................................................... 31
3.2.7 Conclusion ............................................................................................................................. 33
3.3 Non- Recoverable Costs Associated with Duty and Taxes Charge ................................. 35
3.3.1 Terminology........................................................................................................................... 35
3.3.2 General Information ............................................................................................................. 36
3.3.3 China ...................................................................................................................................... 36
2
3.3.4 India ........................................................................................................................................ 37
3.3.5 Bangladesh ........................................................................................................................... 38
3.3.6 Turkey .................................................................................................................................... 39
3.3.7 Conclusion ............................................................................................................................. 40
4 Understanding of Transfer Pricing in Relation with Import Duties ............................................ 40
4.1 Terminology............................................................................................................................... 40
4.2 General Information ................................................................................................................. 41
4.3 China .......................................................................................................................................... 42
4.4 India ............................................................................................................................................ 43
4.5 Bangladesh ............................................................................................................................... 44
4.6 Turkey ........................................................................................................................................ 46
4.7 Conclusion ................................................................................................................................. 47
5 Research Findings and Alternatives.............................................................................................. 49
5.1 Research Findings ................................................................................................................... 49
5.1.1 Shipment Overview .......................................................................................................... 49
5.1.2 Harmonize System Commodity Code (HS code) & Import Duty and Tax Charge
Rate 50
5.1.3 Duty and Tax Charges Scenarios .................................................................................. 50
5.1.4 Transfer Price ................................................................................................................... 50
5.2 Alternatives ................................................................................................................................ 51
5.2.1 China .................................................................................................................................. 51
5.2.2 India .................................................................................................................................... 52
5.2.3 Bangladesh ....................................................................................................................... 53
5.2.4 Turkey ................................................................................................................................ 53
5.3 Recommendation ..................................................................................................................... 54
5.3.1 Import ................................................................................................................................. 54
5.3.2 Outsource .......................................................................................................................... 54
6. References& Appendices ................................................................................................................... 56
6.1 Reference ....................................................................................................................................... 56
6.2 Appendices ..................................................................................................................................... 58
Appendix 1: Alternatives of HS codes China ................................................................................... 58
3
Disclaimer
This project report/dissertation has been prepared by the author as an intern under the
Internship Program of Saxion Hogeschool and Checkpoint System Kimball B.V for academic
and Checkpoint Kimball B.V use purposes only. The views expressed in the report are personal
to the intern and do not necessarily reflect the view of Checkpoint or any of its staffs or
personnel and do not bind Checkpoint in any manner. This report is the intellectual property of
Checkpoint System Kimball B.V and the same or any part thereof may not be used in any
manner whatsoever, without express permission of Checkpoint System Kimball B.V in writing
4
1. Introduction
The final research report is one of the products associated with the internship project report.
The report is derived as solution for Checkpoint’s challenges as well as constructed based on
research objectives, where it is divided into five main parts:
Part 1: This part focuses in introducing and analyzing the Checkpoint shipment sample in
2012. In this case, it’s the data about shipments of four product types:
 Cardboard/Paper tags or tickets,

 Self-Adhesive/Adhesive labels,
 RF/Radio Frequency tags or labels,
 RFID/Radio Frequency Integrated Data tags or labels.
To printshops 33, 64 in China, printshops 42, 44, 48, and 65 in India, printshop 36 in
Bangladesh and printshop 63 in Turkey.
Part 2: This part focuses on resolving research objective A: Understanding up-to date
harmonized commodity code (HS code), import duty and tax charges, non-recoverable costs
and associate with shipment of each product type to each of the printshop location.
Part 3: This part targets another angle of Import/Export, research objective B: Understanding
transfer price effects on the reduction of import duty and tax charges to each of the printshop
location.
Part 4: This part focuses on summarizing the research findings, analyze the alternatives, and
draw up conclusions as well as recommendation for future shipments to those defined
location.
Part 5: This part focuses on locating the references of the information for future validation
2. Checkpoint 2012 Shipments Overview

2.1. Terminology
 Quantity Shipped: The quantity of each product type shipped to each location printshop
is expressed in figures and percentages.
 Stock Value: the value of the shipment is expressed in terms of money based on the
quantity shipped and prices applied at the custom of printshop‘s country. The prices can
be cost prices, or transfer prices or IC (inter-company) prices. Depending on the
printshop, billing method, customer, ownership of the stock, prices are applied in
accordance.
 Cost prices: product’s standard prices are applied in case of company owned stock,
indicating solely costs of unit produced. Cost price can be varied between the locations
5
depending on several printing method, material used, size of the products and etc;
henceforth cost prices are being calculated as average of each location.
 Transfer prices: product’s ZPVP prices are applied in case of transferring ownership title
to the printshop. Transfer prices are calculated based on ALS model (company’s costing
model), which includes additional import and freight charges on top of unit production
costs and any other related fees
 IC (Inter-company) prices are product’s price applied for Checkpoint’s entities, which
may include discounts as well as royals.
 Average prices are Average stock prices, which are calculated as an average of cost
prices, transfer prices and IC (Inter-company) price in order to simplify the scenario for
analysis.
2.2. General Information

Overall, the sample represents the total of 1 billion units shipped to all locations, where
cardboard products account for 42% of total 2012 quantity shipped. Along the side, Self-
adhesive products account for 32%, RF products 18% and RFID products 8%, respectively.
2012 Quantity Shipped Overviews

Million Units (000000)
200
150
100
50
BD CN IND TR BD CN IND TR BD CN BD CN IND TR

CB RF RFID SA
Total 186 126 70 67 18 122 29 27 13 70 75 138 71 60
Product Type/Location
Figure 1: 2012 Quantity Shipped Overviews
In addition, most of units are shipped to China, which is 43% of total quantity shipped, followed
by Bangladesh 27% and 14%-16% for Turkey and India. At the same time, Bangladesh
printshop accumulate most cardboard shipment while China printshops accumulate most of
other three product types.
6
2012 Quantity Shipped Compositions
CB BD
6% CB CN
7% 17%
CB IND
CB TR
RF BD
13%
RF CN
12% RF IND
RF TR
7% RFID BD
6% RFID CN
6% SA BD
6% SA CN
1% 3% SA IND
3% 11%
2% SA TR
Figure 2: 2012 Quantity Shipped Compositions
In terms of stock value, the total stock values imported to the four locations generate the figures
between by 10-15 million Euros. In other words, it’s 12 million Euros in average. In short, the
highest stock value products are belonged to RFID and RF products shipped to China, which
accounts for 20-27% of total 2012 stock value. Also, cardboard products shipped to Bangladesh
are seen as high as 8%. The rest of the stock value portions are divided in between location
printshops as shown below,
7
2012 Stock Value Overviews
4000
3500
Thousand Euros(000)
3000
2500
2000
1500
1000
500

CB RF RFID SA
Stock Value(Cost price) 513 419 251 259 381 2314 738 667 559 3248 151 298 174 203
Stock Value(Transfer Price) 1609 1070 667 480 504 2755 753 831 720 3675 385 952 707 303
Stock Value (Average) 1061 745 459 370 442 2535 746 749 639 3462 268 625 441 253
Figure 3: 2012 Stock Value Overviews
2012 Stock Value Compositions

2% CB BD
3% 8% CB CN
2% 5%
6% CB IND
CB TR
4%
RF BD
3%
RF CN
3%
RF IND
27% RF TR
RFID BD
RFID CN
20%
SA BD
SA CN
5%
6% 6% SA IND
SA TR
Figure 4: 2012 Stock Value Compositions
8
2.3. China
At the moment, the two printshops analyzed in China are printshop no.33 (Maxim Shanghai)
and printshop no.64 (Ziangjigang). Whereas PS64 ZJG is Checkpoint’s entity, PS33 belongs to
the company’s partner-Maxim Shanghai.
2012 China Stock Value Overviews

4000
3500
3000
Thousand Euros(000)
2500
2000
1500
1000
500
PS33 PS64 PS33 PS64 PS64 PS33 PS64

CB RF RFID SA
Total 653 92 1388 1147 3462 548 77
Product Type/ Location
Figure 5: 2012 China Stock Value Overviews
According to 2012 database, there are 456 million units shipped to China, which results the
average stock value of 7.3 million Euros. The composition of stock value shows that RFID stock
value shipped to PS64 accounts for 47% of overall stock value in China, the highest value
shipped due to high cost price. Meanwhile, RF products are the second highest with stock value
ranged between 16-19% among the two printshops in China. Cardboard products and self-
adhesives chronologically followed by 9% and 7%. Remarkably, the stock value of cardboard,
self-adhesive and RF product imported to PS33 is generally higher than occurrence in PS64.
On the flip side, PS64 is seen as hub of RFID product shipments to China.
9
2012 China Stock Value Compositions
1%
7% 9% 1%
CB PS33
CB PS64
19%
RF PS33
RF PS64
RFID PS64
SA PS33
47%
SA PS64
16%
Figure 6: 2012 China Stock Value Compositions
2.4. India
Printshops are being analyzed in India are printshop no.42 (India-Mumbai), printshop no.44
(India-South), printshop no.48 (India-Chennai) and printshop no.65 (India-New Delhi).
10
2012 India Stock Value Overviews
700
600
500
Thousand Euros(000)
400
300
200
100
PS42 PS44 PS48 PS65 PS42 PS44 PS48 PS65 PS42 PS44 PS48 PS65
CB RF SA
Total 88 292 18 61 75 45 15 610 22 311 4 103
Figure 7: 2012 India Stock Value Overviews
With the total unit shipped of 169 million units, India provokes the average stock value of 1.6
million Euros. As per printshop, PS65 is known as a hub of RF products shipments in India
accounted for 610 thousand Euros in 2012, which accounted approximately 37% of India’s stock
value. Meanwhile, PS44 has the highest records of stock value over 2 product types: cardboard
and self-adhesive, which is 18-19%. The rests are divided as followed,
11
2012 India Stock Value Compositions
0%
6% 5% CB PS42
CB PS44
18% CB PS48
19%
CB PS65
RF PS42
1% RF PS44
1% 4% RF PS48
RF PS65
5%
SA PS42
3%
SA PS44
1% SA PS48
37% SA PS65
Figure 8: 2012 India Stock Value Compositions
2.5. Bangladesh
For the location Bangladesh, printshop no.36 (Chittagong)) is the only printshop being analyzed
for this location.
2012 Bangladesh Stock Value Overviews

1200
Thousand Euros(000)
1000
800
600
400
200
PS36 PS36 PS36 PS36

CB RF RFID SA
Total 1061 442 639 268
Product Type Location
Figure 9: 2012 Bangladesh Stock Value Overviews
12
With 291 million units shipped to the printshop location, it shows the average of 2.4 million
Euros stock value. Cardboard products accounts for 44% of overall Bangladesh’s stock value,
the highest. Following by RFID products, 27% of the stack represents 639 thousand Euros. The
rest of the location’s stock value portions are divided as 18% for RF products and 11% for self-
adhesive products.
2012 Bangladesh Stock Value Compositions
11%
44% CB PS36
RF PS36
27%
RFID PS36
SA PS36
18%
Figure 10: 2012 Bangladesh Stock Value Compositions
2.6. Turkey
Printshop no.63 (Istanbul) is only one printshop being analyzed in Turkey. With 154 million units
shipped, the stock value is set at an average of 1.3 million Euros. RF products shipped appear
as the most stock value with 55%. The other less than half of the stock value portion is divided
as 27% for cardboard products and 18% for self-adhesive products.
13
2012 Turkey Stock Value Overviews
800
700
600
Thousand Euros(000)
500
400
300
200
100
PS63 PS63 PS63

CB RF SA
Total 370 749 253
Figure 11: 2012 Turkey Stock Value Overviews
14
2012 Turkey Stock Value Compositions
18%
27%
CB PS63
RF PS63
SA PS63
55%
Figure 12: 2012 Turkey Stock Value Compositions
2.7. Conclusion
Though higher cost price would slightly affect these demand, seeing the overall RF demand of
18% and RFID demand of 8% promise potential. Therefore, it’s worth for Checkpoint to give
attention over sourcing these two product types at the least costs. High value stock at least
costs would mean yielding the profit even more than mark up margin 40%.
In terms of China, since this location accounts for most of shipments quantity as well as
shipments value amongst the locations, especially with most located RF and RFID products.
This means the production costs are cheap or higher demand in China or location closed to
China, which makes China becomes visibly for not only printshop located but in the near future
manufacturing hub for Checkpoint’s Asia Pacific.
In terms of India, there are 4 printshops, but not much of shipments are located to these
locations. With that in mind, it’s costly to keep operating 4 printshops, instead of 2 or even 1.
In terms of Bangladesh, the location has the most shipments of cardboard products and it’s one
of the two locations besides China has RFID shipments. So, the location can perform as a
trade-offs to China when comes to demand of cardboard and RFID products, taken into
accounts other influence factors like import costs, customer location, and ….
With Turkey, the location has least shipments and stock value; however, it’s clear to see the
conflict of quantity shipped and stock value of RF products. The question should be whether the
15
profit would outweigh the import costs of RF products, which will be further discussed in later
chapter. (1)(2)(3)(4)(5)(6)(7)
3. Research Objective A: Commodity Code (HS Code), Import Duty

and Tax Charges Due and Non-Recoverable Costs
3.1. Harmonized Commodity and Coding System (HS Code)
3.1.1. Terminology
 Harmonized Commodity Description and Coding System (HS Code): when trading
between countries, at the point of import/export, the coding system is applied as an
internationally standardized system of names and numbers developed and maintained
by the World Customs Organization (WCO). In addition, the code system has been
applied in 170 countries and performing as indicator for tariff classification and charges
with 21 sections and 96 chapters’ coverage most of products’ finished goods as well as
raw material and several other forms.
 HS code digits: depend on the countries where goods are imported/exported, the HS
code of the goods would be varied. In general, a complete standard HS code would
have 10 digits. In specific, it’s mostly unified over the first 4 digits level across the
countries, which stands for general description of headings. 6 digits level is set as
international nomenclature and the last 4 digits of the code are distinct between
countries for reporting purpose.
 Harmonized System nomenclature (HS nomenclature): is harmonized system

commodity code, where seeing the first 6 digits of the codes address to the same
classification chapters and sub-headings.
3.1.2. General Information

According to information gathered from Custom Department in China, India, Bangladesh and
Turkey, the HS codes have been using and being recorded in the company database for
Checkpoint’s products, are also applicable in 2012- 2013. In fact, there are no major changes in
terms of the number of digits as well as the codes. Yet, between the countries, the codes would
vary in terms of number of digits, the descriptions and the tariff charges.
1
Checkpoint Terborg, Transaction File 2012-2013, 2013
2
Checkpoint Terborg, CMC&CMJ shipments 2012-2013,2013
3
Checkpoint Terborg, Additional RFID shipments 2012-2013, 2013
4
Checkpoint Terborg, Standard price list 2013,2013
5
Checkpoint Terborg, Printshop template 2013, 2013
6
Checkpoint Terborg, ALS Calculation Model 2013,2013
7
Checkpoint Terborg, RF components list 2013, 2013
16
Printshop
Harmonized Commodity Code Digits Validity
Location
10 digits
China Explanation: First 6 digits stand for Harmonized System 31/12/2013
nomenclature and the last 4 digits for national nomenclature
8 digits
India Explanation: First 6 digits stand for Harmonized System 31/12/2013
8 digits
Bangladesh Explanation: First 6 digits stand for Harmonized System 31/12/2013
12 digits
Explanation: First 6 digits stand for Harmonized System
Turkey 31/12/2013
nomenclature and the last 6 digits for national nomenclature.
Table 1: General Rules of Harmonized System Commodity Code Overviews
3.1.3. China
China custom used different commodity codes for classification of Checkpoint’s four product
types. In particular, cardboard and self-adhesive products are classified under heading 4821.
However, the sub-heading for these two items is distinguished between sub 10 and 90. And
there is no specification in terms of the last digits as stated as 0s.
Overall, for cardboard and self adhesive products imported to China, the products are classified
based on its form and specification. In other words, the products are classified as final product
paper tags/labels of all kinds, and then followed classification based the form of the product
such as printed/other. In terms of RF and RFID products, they are classified as main component
function, which are radio frequency and radio frequency integrated data devices. The detail will
be shown as below table,
17
Harmonized
Checkpoint Product
System Commodity HS Code Description
Classification
Code(HS Code)
Paper or paperboard labels of all kinds, Cardboard/Paper tag/ Paper
4821.10.00.00
whether or not printed: Printed price ticket
Self adhesive/Self adhesive
Paper or paperboard labels of all kinds,
4821.90.00.00 label/Paper label attached
whether or not printed: Other
self adhesive piece
Electric sound or visual signaling
apparatus (for example, bells, sirens,
Radio Frequency(RF) tag or
indicator panels, burglar or fire alarms),
8531.90.10.00 label/tag or label attached a
other than those of heading-Nos.85.12 or
piece of RF device
85.30:Parts-Of burglar or fire alarms and
similar apparatus
apparatus (for example, bells, sirens, Radio Frequency Integrated
indicator panels, burglar or fire alarms), Data (RFID) tag or label/tag
8531.90.10.00
other than those of heading-Nos.85.12 or or label attached a piece of
85.30:Parts-Of burglar or fire alarms and RFID device
similar apparatus
Table 2:2012 China Harmonized System Commodity Code Classifications
3.1.4. India
As for India, the classification of cardboard and self adhesive products are addressed to
heading 4821 – paper tags/labels of all kind, sub-heading 10: Printed form and specific
descriptions of whether the product is tag or label will be addressed to the last 2 digits of the
codes. As addressed for RF and RFID tags/ labels, the products are classified by the main
component description and function, which is “Electric sound or visual signaling apparatus –
Parts and function as burglar, fire alarm and similar apparatus”. The detail will be shown as
below table,
18
Harmonized
System Checkpoint Product
HS Code Description
Commodity Classification
Code(HS Code)
Paper or paperboard labels of all kind, Cardboard/Paper tag/ Paper
4821.10.10
whether or not printed: Printed-Paper tags price ticket
Paper or paperboard labels of all kind,
4821.10.20 label/Paper label attached
whether or not printed: Printed-Labels
self adhesive piece
Electric sound or visual signaling apparatus
(for example, bells, sirens, indicator panels, Radio Frequency(RF) tag or
8531.90.10 burglar or fire alarms), other than those of label/tag or label attached a
heading-Nos.85.12 or 85.30:Parts-Of piece of RF device
burglar or fire alarms and similar apparatus
Radio Frequency Integrated
(for example, bells, sirens, indicator panels,
Data (RFID) tag or label/tag
8531.90.10 burglar or fire alarms), other than those of
or label attached a piece of
heading-Nos.85.12 or 85.30:Parts-Of
RFID device
burglar or fire alarms and similar apparatus
Table 3:2012 India Harmonized System Commodity Code Classifications
3.1.5. Bangladesh
As for Bangladesh shipments, cardboard and self adhesive products are classified based on its
paper material. HS 4810.19 is unified HS code addressed to cardboard paper with certain
characteristic of as described below and uncoated/not printed. Meanwhile HS 4811.41 is unified
used for self-adhesive paper classification regardless of the function of the material.
On the other hand, the HS code used for RF and RFID tags/labels are classified based on
products main component description and function. In this case, it’s obvious to determine that
RF or RFID devices are parts of the tags/labels with function to detect/signaling and can be
viewed as burglar alarm.
19
Harmonized
System Checkpoint Product
HS Code Description
Commodity Classification
Code(HS Code)
Paper and paperboard of a kind used for
writing, printing or other graphic purposes,
not containing fibers obtained by a
Cardboard/Paper tag/ Paper
4810.19.00 mechanical or chemi- mechanical process or
price ticket
of which not more than 10% by weight of the
total fiber content consists of such fibers
:Other
4811.41.00 Self adhesive paper or paperboard label/Paper label attached
self adhesive piece
(for example, bells, sirens, indicator panels,
8531.90.00 label/tag or label attached a
burglar or fire alarms), other than those of
piece of RF device
heading 85.12 or 85.30: Parts
Electric sound or visual signaling apparatus Radio Frequency Integrated
(for example, bells, sirens, indicator panels, Data (RFID) tag or label/tag
8531.90.00
burglar or fire alarms), other than those of or label attached a piece of
heading 85.12 or 85.30: Parts RFID device
Table 4: 2012 Bangladesh Harmonized System Commodity Code Classifications
3.1.6. Turkey
Based on the up-to-date commodity code applied for Checkpoint products shipped to Turkey,
cardboard and self adhesive are numbered under same chapter and heading 4821
paper/paperboard labels of all kinds and with sub-heading 10 for printed form and 90 for other
form. And followed by the 7th and 8th digits, they are used as national nomenclature to indicate
specific description of the products. In this case, 90 stand for tags and labels. In term of RF and
RFID products, they are classified based on the main component’s characteristics and function
as mentioned below,
20
Harmonized System
Checkpoint Product
Commodity HS Code Description
Classification
Code(HS Code)
Paper or paperboard labels of all
4821.10.90.00 kinds, whether or not printed: Printed-
price ticket
Other
Paper or paperboard labels of all Self adhesive/Self adhesive
4821.90.90.00 kinds, whether or not printed: Other- label/Paper label attached self
Self-adhesive adhesive piece
apparatus (for example, bells, sirens, Radio Frequency(RF) tag or
8531.90.10.00 indicator panels, burglar or fire label/tag or label attached a
alarms), other than those of heading piece of RF device
8512 or 8530:Parts-Other
apparatus (for example, bells, sirens,
Data (RFID) tag or label/tag or
8531.90.10.00 indicator panels, burglar or fire
label attached a piece of RFID
alarms), other than those of heading
device
8512 or 8530:Parts-Other
Table 5: 2012 Turkey Harmonized System Commodity Code Classifications
3.1.7. Conclusion
The codes would have the same classification chapters, but depend on the location the
products can be classified under different forms and descriptions. Nevertheless, with RF and
RFID products, HS classifications address the same Chapter, heading and sub-heading, but in
some location, the last four digits will be addressed to a more specific description than other
location.
3.2. Import Duty & Tax Charges Due
3.2.1. Terminology
 Trade Agreement: is a tax, tariff and trade treaty between countries sought for investment
guarantees. There are two most common trade agreements such as preferential and free
trade, composed as the purpose of reduce or eliminate tariffs, quotas, and other trade
restriction on products traded between authorizers.
 Import Duty: is an indirect tax which is levied on the import and export of goods of
international trade.
 Value-added tax(VAT): is a tax levied on the commodity’s price before taxes and its cost of
production
 Consumption tax: is the tax levied once purchasing goods
21
 Free trade zone (FTZ) or export processing zone (EPZ) is also known as foreign trade zone,
in other words, it’s a free port area in which goods are landed, handled, manufactured or
processing and re-exported without intervention of custom authorities.
 Additional duty (CVD): is often referred to countervailing duty or CVD equal to central excise
duty levied on goods produced or manufactured in India.
 Supplemental additional duty: another form of addition duty charges for shipments to India
 CESS is or in other words, Education tax applied in India as subsidizes for the education of
low income citizens.
 Regulatory Duty: is subject as subsection where it’s applied to any duty imposed under
subsection; applied to and from the day specified in the notification issued under subsection.
 Advance Trade VAT(ATV): Additional Import VAT tax.
 Advance Income Tax: Additional income tax
3.2.2. General Information

Based on the harmonized system commodity codes indicated in the previous chapter, the
import tariffs are applied in accordance as shown in a below table,
22
Product Location Harmonized Import Duty Other Duty Validity
Type System Rates &Type and Tax
Commodity Charges
Code(HS Code)
Cardboard China 4821.10.00.00 7.5%-Most Total:17% 31/12/2013
favored nation
rate
India 4821.10.10 10%-General 31/12/2013
rate Total:19%
Bangladesh 4810.19.00 0%-Export 31/12/2013
processing zone Total: 0%
(EPZ)applied no
tariff charges
Turkey 4821.10.90.00.00 0%-General rate Total: 18% 31/12/2013
Self- China 4821.90.00.00 7.5%-Most Total:17% 31/12/2013
adhesive favored nation
rate
India 4821.10.20 10%-General 31/12/2013
rate Total:19%
(EPZ)applied no
tariff charges
Turkey 4821.90.90.00.00 0%-General rate Total: 18% 31/12/2013

RF/RFID China 8531.90.10.00 0%-Most favored Total:17% 31/12/2013
nation rate
India 8531.90.00 10%-General 31/12/2013
rate Total:19%
(EPZ)applied no
tariff charges
Turkey 8531.90.85.00.00 2.2%-General Total: 18% 31/12/2013
rate
Table 6: 2012 Current Import Duty and Tax Charges
In general, it’s obvious to recognize cardboard and self adhesive products have the average
import tariff rate between 0-10% while other additional duty and taxes rate are between 17-19%
in most cases. Therefore, these ranges can be used as benchmark bar for later analysis.
In addition, for imports to China, they are applied most-favored nation duty rate which is
expectedly lower than general rate, which is, especially applied for WTO (World Trade
Organization) country’s member.
23
At the same time, imports to Bangladesh, are treated as free duty and taxes charges, which
resulted from the benefit of importing via export processing zone (EPZ).
In terms of India and Turkey, there are only the appearances of general duty rate treatments for
Checkpoint’s product under the location countries’ tariff schedule. Furthermore, the validity of
the information is limited to the year ended 2013 and beginning of year 2014.
Remarkably, according to the invoices gathered for the majority of all the shipments to the
printshop location , the remark is that there is no insurance, freight and landing charge
involved in the calculation of the products’ custom value.(8)( 9)
3.2.3. China
Import duties and tax charged in China is a combination of
1. Import duty rate

2. Value-added tax(VAT) rate
3. Consumption tax rate.
Harmonized
Total
System Checkpoint Import
Consumption Value Added Import
Commodity Product Duty Validity
Tax Tax(VAT)Rate Tariff
Code(HS Classification Rate
Rate
Code)
Cardboard/Paper
4821.10.00.00 tag/ Paper price 7.5% 0% 17% 24.5% 31/12/2013
ticket
Self adhesive/Self
adhesive
4821.90.00.00 label/Paper label 7.5% 0% 17% 24.5% 31/12/2013
attached self
adhesive piece
Radio
Frequency(RF)
tag or label/tag or
8531.90.10.00 0% 0% 17% 17% 31/12/2013
label attached a
piece of RF
device
Radio Frequency
Integrated Data
(RFID) tag or
8531.90.10.00 0% 0% 17% 17% 31/12/2013
label/tag or label
attached a piece
of RFID device
Table 7:2012 China Import Duty and Tax Charges Rate
8
Checkpoint Terborg, HS code 2011 list, 2013
9
Checkpoint ZJG &Shanghai, Leslie &Rain: Samples of Import Duties and Taxes Charges Invoices, 2013
24
Applied these current rate to the shipments to the located printshops in China, there are a few
notices. First of all, there is high import duty rates stated as 7.5% for less stock value products:
cardboard and self adhesive. Meanwhile, there are zero duty rates for high stock value
products: RF and RFID. Correspondingly, there are no consumption tax charges and uniformly
17% value added tax charges (VAT) for the four product types.
2012 China Import Duty and Tax Charges Due

Overviews
700
600
Thousand Euros(000)
500
400
300
200
100

CB RF RFID SA
Total 168 24 236 195 589 141 20
Figure 13: 2012 China Import Duty and Tax Charges Due Overviews
However, viewing the figures in a broader scope, applying the rates on 2012 shipments results
the averaged import tariff due of 1.3 million Euros. This figure represents highly contribution of
charges on RFID imports to printshop no.64, 43% and RF imports to printshop no.33 and no.
64, 31%.
Comparing to RF and RFID products’ charges, charges on cardboard and self adhesive
products are stably ranged between 12-14% across the located printshops. Along the side, two
fifth of the total tariff amount due derives from PS33 and the remaining three fifth is allocated to
PS64.
Ergo, the concern for imports cardboard and self adhesive products is what to do with high duty
and tax rates of 24.5%. As for imports of RF and RFID products, though the import duty rate is
already zero, VAT of 17% still remains as the causes for high tariff amount due for these
25
products. The concern is then followed by what to do with the VAT charges to deduce the tariff
amount due. The answer will be further discussed in later chapters.10
2012 China Import Duty and Tax Charges Due

Compositions
2%
10% 12%
2%
CB PS33
CB PS64
RF PS33
17%
RF PS64
RFID PS64
SA PS33
43%
SA PS64
14%
Figure 14: 2012 China Import Duty and Tax Charges Due Compositions
3.2.4 India
Import duty and tax charges for imports to India are subjected to the following rates:
1. Import duty rate

2. Additional duty (CVD) rate
3. Supplemental additional duty rate
4. CESS rate
10
Custom.CN: Import Duties and Tax Rates Lookup, 2013
26
Harmonized
Total
System Checkpoint Import Supplemental
Additional CESS Import
Commodity Product Duty Additional Validity
Duty(CVD)Rate Rate Tariff
Code(HS Classification Rate Duty Rate
Rate
Code)
Cardboard/Paper
4821.10.10.00 tag/ Paper price 10% 12% 3% 4 29% 31/12/2013
ticket
Self
adhesive/Self
adhesive
4821.10.20.00 10% 12% 3% 4% 29% 31/12/2013
label/Paper label
attached self
adhesive piece
Radio
Frequency(RF)
tag or label/tag
8531.90.10.00 10% 12% 3% 4% 29% 31/12/2013
or label attached
a piece of RF
device
Radio Frequency
Integrated Data
(RFID) tag or
8531.90.10.00 10% 12% 3% 4% 29% 31/12/2013
label/tag or label
attached a piece
of RFID device
Table 8: 2012 India Import Duty and Tax Charges Rate
Apparently, it’s vital to know that there are homogeneous import duty rates of 10% as well as
other duty and tax rates of 19% for Checkpoint’s four product types imported to printshops in
India. In particular, when it comes to shipments to this location in 2012, the figures show high
contribution of charges on RF shipments, as the most at printshop no.65 with 177 thousand
Euros or 54% of total charges due in India.
Meanwhile, printshop no.44 shows the most charges on cardboard shipments with 12% and self
adhesive shipment with 7% of total tariff due in India. (11)(12)
11
Checkpoint India, Sandeep: Samples of Import Duties and Taxes Charges Invoices, 2013
27
That is to say, though the there are similar tariff rates of import charges for all product types in
India, the amount of charges depend on the stock value of the product as well as the quantity
shipped.
The higher the volume, the higher stock value, the more likely the tariff amount due results
higher. That is why the concern for Checkpoint is to look over for the alternatives in reducing the
tariff charges or adjust the stock value to lower the tariff amount due, which will be discussed in
later chapter.
2012 India Import Duty and Tax Charges Due

Overviews
200
180
160
Thousand Euros(000)
140
120
100
80
60
40
20
PS42 PS44 PS48 PS65 PS42 PS44 PS48 PS65 PS42 PS44 PS48 PS65
CB RF SA
Total 25 85 5 18 22 13 4 177 6 90 1 30
Product Type / Location
Figure 15: 2012 India Import Duty and Tax Charges Due Overviews
12
Eximguru: India HS lookup, www. Eximguru.com,2013
28
2012 India Import Duty and Tax Charges Due
Compositions
0%
CB PS42
7% 4%
CB PS44
1% 7% 12%
1% CB PS48
CB PS65
4% RF PS42
RF PS44
6%
RF PS48
3%
RF PS65
1% SA PS42
SA PS44
54%
SA PS48
SA PS65
Figure 16: 2012 India Import Duty and Tax Charges Due Compositions
3.2.5 Bangladesh
For imports to Bangladesh, there are several duties and taxes are subject to such as:
1. Import duty rate

2. Supplementary duty rate
3. Regulatory duty rate
4. Value added tax(VAT) rate
5. Advance trade VAT(ATV) rate
6. Advance income tax rate
Nevertheless, at the moment, shipments to printshop no. 36 are subject to zero tariff charges as
the result from the benefit of imports via export processing zone (EPZ). Henceforth, it’s the most
favorable case for the printshop in this particular location.
29
Harmonized Other Total
Import
System Checkpoint Product Duty Import
Duty Validity
Commodity Classification and Tax Tariff
Rate
Code(HS Code) Rate Rate
4810.19.00.00 0% 0% 0% 31/12/2013
price ticket

4811.41.00.00 label/Paper label attached 0% 0% 0% 31/12/2013
self adhesive piece

8531.90.00.00 label/tag or label attached a 0% 0% 0% 31/12/2013
piece of RF device

Data (RFID) tag or label/tag
8531.90.00.00 0% 0% 0% 31/12/2013
or label attached a piece of
RFID device
Table 9: 2012 Bangladesh Import Duty and Tax Charges Rate
2012 Bangladesh Import Duty and Tax Charges

Due Overviews
1.00
0.90
Thousand Euros(000)
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
-
PS36 PS36 PS36 PS36
CB RF RFID SA
Import Duties&Tax Charges
- - - -
Due(Cost Price)
Import Duties & Tax Charges
- - - -
Due(Transfer price)
- - - -
Due(Average)
Figure 17: 2012 Bangladesh Import Duty and Tax Charges Due Overviews
Applying the rates shown on the table above, import duties and taxes charges resulted to 0 for
all product types. In other words, the scenario shows the saving of complete of 53.00% being
30
charged as import duties and taxes for cardboard and self adhesive and 35% for RF and RFID
products once the products are not imported via EPZ zone. So, it’s the best to maintain this
import benefit. 13
3.2.6 Turkey
Imports to Turkey printshop no.63 is subjected to:
1. Import duty rate

2. Special consumption tax rate
3. Value-added tax(VAT)rate
Turkey tariff schedule shows the low import duty rate for low value product type, cardboard and
self adhesive. Yet, as for RF and RFID products, the high stock value items are charged with
higher import duty rate as seen as 2.2%. There is apparently no special consumption tax levied
on Checkpoint’s product type, but 18% VAT charges for the four product types. (14)(15)
Harmonized
Total
System Checkpoint Import Special Value
Import
Commodity Product Duty Consumption Added Validity
Tariff
Code(HS Classification Rate Tax Tax(VAT)
Rate
Code)
Cardboard/Paper
4821.10.90.00 tag/ Paper price 0% 0% 18% 18% 31/12/2013
ticket
Self adhesive/Self
adhesive
4821.90.90.00 label/Paper label 0% 0% 18% 18% 31/12/2013
attached self
adhesive piece
Radio
Frequency(RF) tag
8531.90.10.00 or label/tag or 2.2% 0% 18% 20.2% 31/12/2013
label attached a
piece of RF device
Radio Frequency
Integrated Data
(RFID) tag or
8531.90.10.00 2.2% 0% 18% 20.2% 31/12/2013
label/tag or label
attached a piece of
RFID device
Table 10: 2012 Turkey Import Duty and Tax Charges Rate
13
Bangladesh HS Code General Rate: http://www.nbr-bd.org/operative_tariff.html
14
Checkpoint Turkey, Pinar: Samples of Import Duties and Taxes Charges Invoices, 2013
15
Turkey Custom Tariff (n.d.):T.C. Ekonomi Bakanl?, 2013
31
2012 Turkey Import Duty and Tax Charges Due
Overviews
180
160
Thousand Euros(000)
140
120
100
80
60
40
20
PS63 PS63 PS63

CB RF SA
47 137 37
Due(Cost Price)
67 154 46
Due(Average)
Product Type /Location
Figure 18: 2012 Turkey Import Duty and Tax Charges Due Overviews
Applied to the shipments in 2012, it shows more than half of the tariff amount due coming from
RF shipments, with the average charges of 154 thousand Euros. Concurrently, the tariff due for
cardboard is slightly higher than self adhesive products announced by 4% differences. Thence,
the concern is now for Checkpoint to look into alternatives for lower import duty rate for RF and
RFID products. At the same time, import of cardboard and self adhesive products to Turkey
would be better off if those 18% taxes are exempted.
32
2012 Turkey Import Duty and Tax Charges Due
Compositions
17%
21%
CB PS63
RF PS63
SA PS63
62%
Figure 19: 2012 Turkey Import Duty and Tax Charges Due Compositions
3.2.7 Conclusion
At a glance, it’s obvious to see the most of tariff charges are addressed to RF product groups,
together accounted for 38% of total tariff due while RFID products shipments show lower tariff
charges due to exemption on charges from Bangladesh export processing zone import showing
as 28%. Cardboard products and self adhesive products show variances of 3-4% on the tariff
33
charges with the figures of 16%-19%.
2012 Import Duty and Tax Charges Due Overviews

700
600
Thousand Euros(000)
500
400
300
200
100

CB RF RFID SA
108 73 47 393 214 137 552 77 51 37
Due(Stock Price)
276 193 86 468 218 171 625 245 205 55
Due(Transfer Price)
Import Duties & Tax Charges Due
192 133 67 431 216 154 589 161 128 46
(Average)
Product Type per Location
Figure 20: 2012 Import Duty and Tax Charges Due Overviews
Seeing what is happening with import duty and tax charges for the locations as well as a big
picture, craves for
1. Lower import duty rate for cardboard and self adhesive products, tax exemption/better
import scenario for shipments of RFID and RF for imports to China
2. Lower import duty for all product types as well as seeking for better import scenarios for
imports to India
3. Maintain the current import scenario with the benefit from export processing zone for import
to Bangladesh.
4. Lower import duty for RF shipments as well as lower charges scenarios for all product
shipments to Turkey.
34
2012 Import Duty and Tax Charges Due
Compositions
0%
CB BD
2% CB CN
6% 9%
CB IND
0% 8% 6%
CB TR
3% 0% RF BD
RF CN
RF IND
RF TR
21% RFID BD
28%
RFID CN
SA BD
SA CN
10% SA IND
7%
0% SA TR
Figure 21: 2012 Import Duty and Tax Charges Due Compositions
3.3 Non- Recoverable Costs Associated with Duty and Taxes Charge
3.3.1 Terminology
 Non-recoverable costs: are costs associated with custom valuation, which is not taken
into account once determining the shipments custom value. The missing of these costs
from custom valuation would result lower duty and tax charges and therefore, non-
recoverable duty and tax charges as it is for real scenario.
 Landing charges: are fees paid on goods to be unloaded from the vessels.
 Freight charges: transportation charges from the point of export to the point of import. In
this case, it’s calculated on basis of 80% sea freight and 20% air freight for standard
shipments from manufacturing hub-Checkpoint Terborg to printshop location.
35
3.3.2 General Information
Viewing the invoices from the printshops’ location, freight charges, insurance and landing
charges are not included in custom valuation. In other words, the missing of these costs on the
valuation would shows the lower amount of duties and taxes charges on the invoice and
therefore not truly reflect the realistic import duty and taxes charge due.
As the result, the differences on the amount of duties and taxes charges would be non-
recoverable duties and taxes charges.16
1. Scenario 1: Assumption of landing charges 1%, Insurance 0% and Freight is based on the
location calculation.
2. Scenario 2: Assumption that there are zero charges on landing, insurance and freight
By displaying the two scenarios, it’s obvious to see the variance between the amount of import
duty and tax charges and therefore indicating the non-recoverable costs,
3.3.3 China
Standard Calculated Freight Average
Transport Freight Cost Calculation Cost(Euro/1000 Freight Charge
Location
Mode (Euro/1000 Method units) (Euro/1000
units) units)
Zianjigang,
Air 3.73 20% 0.74
China
0.87
Zianjigang,
Sea 0.16 80% 0.13
China
Table 11: 2012 China Freight Calculation
Currently, the average amount of duty and tax charges due for China is 1.3 million Euros while
the realistic charges would lie between at 1.4-1.5 million Euros. Consequently, there are 100 -
200 thousand Euros are non-recoverable import duty and tax charges. In other words, it is 7-8%
non-recoverable import duty and tax charges.17
At the same time, with more quantity shipped to China, self adhesive allocates higher non-
recoverable costs, followed by less shipment products like, cardboard, RF and RFID.
16
Checkpoint China, India, Bangladesh and Turkey, Rain, Leslie, Sandeep, Mohammed: Duties and Taxes Calculation
Info,2013
17
Checkpoint Terborg: Standard Freight Calculation, 2013
36
2012 China Non-Recoverable Costs Overviews
1600
1400
1200
Thousand Euros(000)
1000
800
600
400
200
CB PS33 PS64 RF PS33 PS64 RFID PS64 SA PS33 PS64 Total

Scenario 1 223 193 30 454 249 205 605 605 195 168 27 1477
Scenario 2 192 168 24 431 236 195 589 589 161 141 20 1372
Differences/Non-recoverable Costs 31 25 6 23 13 10 17 17 34 26 7 104
Figure 22: 2012 China Non-Recoverable Costs Overviews
3.3.4 India
Standard Calculated Freight Average Freight
Transport Freight Cost Calculation Cost(Euro/1000 Charge
Location
Mode (Euro/1000 Method units) (Euro/1000
units) units)
New
Air 4.45 Delhi, 20% 0.89
India
1.15
New
Sea 0.32 Delhi, 80% 0.26
India
Table 12: 2012 India Freight Calculation
37
2012 India Non-Recoverable Costs
600
500
Thousand Euros(000)
400
300
200
100
CB PS42PS44PS48PS65 RF PS42PS44PS48PS65 SA PS42PS44PS48PS65 Total

Scenario 1 158 30 97 8 24 228 23 14 5 186 153 9 104 2 38 540
Scenario 2 133 25 85 5 18 216 22 13 4 177 128 6 90 1 30 477
Differences/Non-recoverable Costs 25 4 12 3 6 12 1 1 9 26 3 14 1 8 63
Figure 23: 2012 India Non-Recoverable Costs
The current import duty and tax charges shows the total of 477 thousand Euros while it’s
actually charged with 540 thousand Euro, in other words, 13-14% are non-recoverable import
duty and tax charges. On the other hand, for cardboard and self adhesive shipment, there are
small differences in terms of the shipment quantity, but with higher quantity shipped than RF
products, non-recoverable costs are higher.
3.3.5 Bangladesh
Transport Standard Location Calculation Calculated Average

Mode Freight Cost Method Freight Freight
(Euro/1000 Cost(Euro/1000 Charge
units) units) (Euro/1000
units)
Air 5.32 Chittagong, 20% 1.06 1.28
Bangladesh
Sea 0.28 Chittagong, 80% 0.22
Bangladesh
Table 13: 2012 Bangladesh Freight Calculation
Though there are certain charges on freight as well as landing charges, which have been
standardized for the location Bangladesh. Again, as the result from the location EPZ benefit,
there is no incurrence of non-recoverable costs since there are no duty and tax charges
originally.
38
2012 Bangladesh Non-Recoverable Costs
1.00
0.90
0.80
Thousand Euro(000)
0.70
0.60
0.50
0.40
0.30
0.20
0.10
-
CB PS36 RF PS36 RFID PS36 SA PS36 Total
Scenario 1 - - - - - - - - -
Scenario 2 - - - - - - - - -
Differences/Non-recoverable Costs - - - - - - - - -
Figure 24: 2012 Bangladesh Non-Recoverable Costs
3.3.6 Turkey
Transport Standard Location Calculation Calculated Average
Mode Freight Cost Method Freight Freight
(Euro/1000 Cost(Euro/1000 Charge
units) units) (Euro/1000
units)
Air 4.48 Istanbul, 20% 0.90 1.16
Turkey
Sea 0.33 Istanbul, 80% 0.26
Turkey
Table 14: 2012 Turkey Freight Calculation
With the current rate of import related costs, the truly amount reflects for the total import duty
and tax charges for Checkpoint’s four product types shipped to Turkey amounted to 303
thousand Euros, in other words, it’s 36 thousand Euros higher than what has been stated on the
invoices. In short, non-recoverable import duty and tax charges accounted for 14-15%. And
cardboard and self adhesive have instated more non-recoverable costs in comparison to RF
products.
39
2012 Turkey Non-Recoverable Costs
350
Thousand Euro(000)
300
250
200
150
100
50
CB PS63 RF PS63 SA PS63 Total
Scenario 1 81 81 163 163 59 59 303
Scenario 2 67 67 154 154 46 46 266
Differences/Non-recoverable
15 15 8 8 13 13 36
Costs
Figure 25: 2012 Turkey Non-Recoverable Costs
3.3.7 Conclusion
To sum up, non- recoverable cost for the overall shipments are between 9-10%, where there is
a lot of work on decreasing non-recoverable expenses charges on the shipments of cardboard
and self adhesive, which account for 18-19%. The fact that higher demand on the certain
product group would results higher import related charges and so forth bringing up the non-
recoverable import duty and tax charges. Consequently, it’s necessary for Checkpoint to
benchmark between different freight forwarders as visualizing lower import service charges or
freight costs as they are main plays on the amount of non-recoverable duty and tax charges.
4 Understanding of Transfer Pricing in Relation with Import Duties

4.1 Terminology
 Transfer prices: product’s ZPVP prices are applied in case of transferring ownership title
to the printshop. Transfer prices are calculated based on ALS model (company’s costing
model), which includes additional import and freight charges on top of unit production
costs and any other related fees.
 Resale price minus transfer pricing method: is resale price determining transfer prices
for product and services. With this approach, transfer prices are set by determined
resale prices and the margin markup used for entities.
 Cost plus transfer pricing method: Are cost-based determining transfer prices for product
and services. Under this approach, prices are calculated at the combination of direct
material cost, labor costs, overhead costs and eventually markup percentage to locate
the profit margin.
40
 Central billing: is billing approach that Checkpoint does the billing to the retailers, applied
for company owned stocks and the stocks ownership title are not transferred in case of
imported to printshops in other locations.
 Local billing: is billing approach that Checkpoint’s entities/printshops do the billing to the
retailers, applied when transfer stocks’ ownership title from Checkpoint to the printshop.
4.2 General Information

As knowing that Checkpoint is a multinational organization, transfer prices are playing important
roles on reducing import duty and tax charges for company shipments to the destination
printshops. Ultimately, Checkpoint aims at the minimum 40% of contribution margin. In
particular, the transfer price has been calculated based on two methods:
1. Cost plus method

2. Resale minus method
However, due to the complexities and missing over the final resale prices at most of the
location, the new calculation of transfer prices would only be assessed by cost plus method.
On the other hand, depending on the location, there is a mixture of local billing and central
billing method, which takes into further account different prices applied when stocks are moved
to printshop location. In addition, bearing in mind of the effects over duty and tax charges due,
with central billing, Import duty and tax charges due are levied on Checkpoint Terborg while the
other way around, Checkpoint’s printshop entities bear the charges. A summary of applied
scenarios over transfer prices are summarized as below,
Location Printshop Ownership Billing method Billing price

China PS no. 33 Checkpoint’s partner Central billing Cost price
China PS no. 64 Checkpoint’s entities Local billing Transfer price(ZPVP)
India PS no. 42 Checkpoint’s entities Local billing Transfer price(ZPVP)
Bangladesh PS no. 36 Checkpoint’s entities Local billing Transfer price(ZPVP)
Turkey PS no.63 Checkpoint’s entities Local billing Transfer price(ZPVP)
Table 15: Summary of Transfer Price Scenarios
Across the location overview, the majority are Checkpoint’s entities except printshop no.33
Maxim Shanghai is partner’s printshop, which also determines the billing price to the location. In
41
specific, at this printshop location, billing price will be cost price corresponding with central
billing method. As for the rest of the location, the local billing corresponding with transfer price
applied as billing price for the shipments to these locations.
4.3 China
With the current quantity shipped to the two printshops in China, applied the billing prices are
indicated in the previous part shown as follow,
2012 China Transfer Price Overviews

60.00
Euro/Thousand unit
50.00
40.00
30.00
20.00
10.00
-
CN CN CN CN
CB RF RFID SA
Cost Prices 4.92 4.92 20.70 20.70 46.50 3.58 3.58
Current Transfer Prices 4.92 8.38 20.70 23.96 52.71 3.58 5.69
Figure 26: 2012 China Transfer Price Overviews
Overall, the transfer prices for cardboard products shipped to China are ranged from 4.92 Euro
per thousand units as minimum to cover the standard costs of the products. Meanwhile,
including other import duty and import related charges to the shipments; the maximum transfer
price is 8.38 Euro per thousand units. In other words, 3.46 Euro per thousand units differences
are used to settle the import duty and charges for cardboard shipments.
Similarly, with RF shipments, the settlement is also set around 3 Euro per thousand units used
to pay for import charges. So, if the charges are above the limit set, the transfer prices need to
be readjusted to be able to cover the expenses once moving stock to this location.
On the other hand, 2.11 Euro per thousand unit variance for self adhesive shipment and 6.21
Euro per thousand units RFID shipments are show. According to these prices, driven duty and
tax charges are shown as below,
42
2012 China Import Duty and Tax Charges-Transfer
Price
4000
3500
Thousand Euros
3000
2500
2000
1500
1000
500
CN CN CN CN
CB RF RFID SA
Stock value 497 211 1470 1233 3675 382 179
Duty and Tax Charges 128 54 250 210 625 98 46
Figure 27: 2012 China Import Duty and Tax Charges-Transfer Price
The amount of charges are to be coherent to transfer prices applied at each of the printshop
location, the higher transfer prices, the higher import duty and tax charges. Resulted from the
calculation, the total stock value is 7.6 million Euros, which says approximately 18% duty and
tax charges for all the product types resulted as 1.4 million Euros.
In short, the amount due reflect 25% percent of duty and tax charges for cardboard and self-
adhesive product, 17% charges for RF and RFID products. Noticeably, the transfer prices of RF
and RFID products need to be readjusted to lower the duty and tax charges.
4.4 India
As for India shipments, since most of the shipments are applied transfer price as the billing
price, which simplifies the analysis over the product type’s transfer price. The current transfer
price reflects highly duty and tax charges and import charges related to the location as seen
through the differences between cost prices and transfer prices.
Around 5 Euro per thousand units are generally the settlements for import costs for cardboard
and RF products to the location while it’s 3 Euro per thousand unit appearing at self adhesive
shipment.
43
2012 India Transfer Price Overviews
30.00
Euro/Thousand Units
25.00
20.00
15.00
10.00
5.00
-
IND IND IND
CB RF SA
Cost Prices 7.96 21.59 3.54
Current Transfer Prices 13.68 27.19 7.28
Figure 28: 2012 India Transfer Price Overviews
Take a closer look at import duty and tax charges; show highly charges on cardboard and RF,
and self-adhesive shipments accounted for 29%. While the duty and tax charges are high in this
location, transfer prices need to be adjusted lower the current in responses to reduction on duty
and tax charges.
2012 India Import Duty and Tax Charges-Transfer

Price
1200
Thousand Euros
1000
800
600
400
200
IND IND IND
CB RF SA
Stock value 955 782 518
Duty and Tax Charges 277 227 150
Figure 29: 2012 India Import Duty and Tax Charges-Transfer Price
4.5 Bangladesh
As most of shipments to printshop no.36 are allocated to export processing zone, which results
zero import charges. That is to say, the transfer prices for this location don’t reflect the duty
charges, but other concerns like licenses and payments for the processing zone. Bearing in
44
mind this condition, the prices are set extremely high as 6 Euro per thousand units different from
cost price for cardboard and RF shipments.
2012 Bangladesh Transfer Price Overviews

60.00
50.00
40.00
Euro
30.00
20.00
10.00
-
BD BD BD BD
CB RF RFID SA
Cost Prices 4.22 21.40 40.90 2.65
Current Transfer Prices 10.45 28.08 52.87 4.86
Figure 30: 2012 Bangladesh Transfer Price Overviews
Meanwhile, it’s 11 euro differences for RFID shipments and its 2 Euro differences for self
adhesive shipments. So, what would be relevant is that whether the transfer price currently
reflects other costs in concern with export processing zone.
2012 Bangladesh Import Duty and Tax Charges-

Transfer Price
2500
2000
1500
Euro
1000
500
BD BD BD BD
CB RF RFID SA
Stock value 1942 516 671 364
Duty and Tax Charges - - - -
Figure 31: 2012 Bangladesh Import Duty and Tax Charges- Transfer Price
45
4.6 Turkey
Turkey has low transfer prices across the product groups, for instance, it’s only 1 Euro per
thousand units difference from cost price for self adhesive shipment while it’s 3 euro difference
for cardboard shipment and 6 euro differences for RF shipments.
2012 Turkey Transfer Price Overviews

35.00
Euro/Thousand Units
30.00
25.00
20.00
15.00
10.00
5.00
-
TR TR TR
CB RF SA
Cost Prices 6.54 23.10 4.06
Transfer Prices 9.86 29.53 5.66
Figure 32: 2012 Turkey Transfer Price Overviews
With the current transfer prices, duty and tax charges amount to 346 thousand Euros, which
contributes by 18% duty and tax charges average for cardboard shipments while it’s 21% duty
and tax charges for RF shipments. That is to say, the transfer prices have closely reflected the
charges from the location.
46
2012 Turkey Import Duty and Tax Charges-
Transfer Price
1000
Thousand Euros
800
600
400
200
TR TR TR
CB RF SA
Stock value 663 807 337
Duty and Tax Charges 119 166 61
Figure 33: 2012 Turkey Import Duty and Tax Charges-Transfer Price
4.7 Conclusion
The overview of transfer prices across the location in comparison to the up-to-date calculation of
transfer prices in accordance to import duty and tax charges show several remarks.
For the cardboard shipments, the new calculations of transfer prices result lower price by few
cents per thousand unitsfor the 4 locations. At the same time, for self adhesive shipments,
transfer price is calculated as lower by 1 Euro per thousand units for India location while it’s
about 60 cents higher for Turkey location.
Remarkably, the transfer prices for RF shipments are few cents to 2 Euros higher for China,
India and Turkey location while it’s 5 Euros lower for RF shipments to Bangladesh. Apparently,
with the RFID shipments to Bangladesh and China, calculated transfer prices are lower by 10
Euros for Bangladesh and higher by 4 Euros for China.
47
2012 Transfer Price Overviews
60.00
50.00
40.00
Euro
30.00
20.00
10.00
-
CB RF RFID SA
Transfer price 10.4 4.92 8.38 13.6 9.86 28.0 20.7 23.9 27.1 29.5 52.8 52.7 4.86 3.58 5.69 7.28 5.66
Calculated transfer price 9.61 4.92 7.49 12.1 9.34 22.9 20.7 25.9 30.4 30.2 42.4 57.0 4.20 3.58 5.74 6.15 6.33
Figure 34: 2012 Transfer Price Overviews
That is to say, with the calculated transfer prices applied for the shipments to these locations,
import duty and taxes are lower by 6 thousand Euros for cardboard shipments and Turkey. In
addition, the new transfer price for cardboard products shipped to India results 32 thousand
euro saves by a decrease on transfer price from 13.6 Euro to 12.1 Euro. Similarly, with self
adhesive products, a decrease on transfer price applied from 7.28 to 6.15 Euro, results 23
thousand Euros saving on import and tax charges.
As for RF and RFID products, the new calculated transfer prices are generally higher for
China, India and Turkey, which draws down to the deficits of 4, 18 and 27 thousand Euros of
duty and tax charges for RF shipments to Turkey, China and Turkey, respectively. Ergo,
maintain the current transfer prices applied at these locations would eliminate these losses.
Last but not least, it’s reasonable to maintain the RFID price of 52.7 Euro for RFID shipments to
printshop no.64 in China since it would bring down the duty and tax charges to 51 thousand
Euros.
48
As the results, the total import duty and taxes increase by 40 thousand Euros with new transfer
prices, or an increase of 2 % import charges due.
However, taken a closer look at cardboard shipments to China printshop no.64, India and
Turkey together with transfer prices of self adhesive product for printshops in India will need to
be re-adjusted in reflecting to a reduction on the current import duty and tax charge.
2012 Saving/Losses on Import Duty and Tax Charges-

Transfer Price
800
700
Thousand Euros(000)
600
500
400
300
200
100
-100
CB RF RFID SA
Duty and Tax Charges 128 54 277 119 250 210 227 166 625 98 46 150 61
Alternatives Duty and Tax Charges 128 49 245 113 250 227 254 170 676 98 47 127 68
Saving/Losses 6 32 6 -18 -27 -4 -51 23 -7
Figure 35: 2012 Saving/Losses on Import Duty and Charges-Transfer Price
5 Research Findings and Alternatives

5.1 Research Findings
5.1.1 Shipment Overview
The majority of shipments are cardboard and self adhesive, together accounted for more than
60% of overall shipments to the printshops. Especially, seeing highest demand of cardboard
products imported to printshop no.36 Bangladesh accounted for 17% while it’s slightly lower for
China with 12%. Together, Bangladesh and China are the hubs of cardboard shipments, where
it appears the same for self adhesive shipment.
Meanwhile, there is further notice of potential product demands like RF and RFID products,
together accounted for 24%, which will be driven higher as if the prices of these two product
groups are adjusted to meet the demand in this current economy situation.
49
5.1.2 Harmonize System Commodity Code (HS code) & Import Duty and Tax Charge
Rate
The Harmonize System Commodity Code has been updated as the recent classification for
Checkpoint’s four product groups. As the result, the HS codes chapter are the same, but
different in sub-heading and the country digits. For instance, for cardboard and self adhesive
shipments to Bangladesh, the products are classified based on its based paper material such as
cardboard paper, coated paper. For the rest of the location, the classification consistently
accords to the finished product classification such as paper tag, printed tag or labels, or
adhesive labels. In terms of RF and RFID shipments, the products are classified based on the
main component, which are RF or RFID devices.
In terms of duty and tax charge rate, the lowest rate for import charges across the four product
types would belong to Bangladesh export processing zone location. Meanwhile, the highest
rates are recorded as shipments to India with tariff rate of 29%. Recently, China custom has
increase duty rate for cardboard products from 5% to 7.5%. Along with self adhesive, the tariff
rates for cardboard and self adhesive are now 24.5%. Turkey appears as low tariff charges for
cardboard and self adhesive in comparison to China and India, with solely VAT tax charges on
these 2 product types. Consequently, the alternative HS codes would focus on decrease tariff
rates for shipments to India and China.
5.1.3 Duty and Tax Charges Scenarios

Under the current import scenario, highly tax charges to RF and RFID products due to relatively
higher stock value as compared to other product type. Also, with more than 17% of VAT tax
charges for these product groups, it’s still a big burden to lower to product prices as imported to
China, India and Turkey.
Taken this information into account, import to the China can see alternatives of 2 other
scenarios, which are imports via trade zone or processing zone and imports with tax refunds.
Meanwhile, for India and Turkey import via trade zone or processing zone would be the
alternatives. And as for Bangladesh, the current import scenario is the most favorable.
5.1.4 Transfer Price

Transfer prices for RF and RFID are much lower than the new calculation, which is a question to
whether remains these prices for lower duty and tax charges or readjusted. Meantime, several
transfer prices can be changed to lower duty and tax charges such as transfer prices for
cardboard products from all the location, and transfer price of self adhesive shipments to India.
As for the rest, the transfer prices will remain the same or readjusted with more detail
information since the new calculation shows higher import duty and charges.
50
5.2 Alternatives
5.2.1 China
China’s import alternatives are listed as followings,
1. Import via Ziangjigang free trade zone/ Hongkong for shipments of the four product
groups
Import via trade zone or when the products are made origin from Hongkong, import duty and
tax charges are to be exempted. However, there are trade- offs in of purchasing trade zone
license as well as trade off for import originated from Hongkong. Keeping in mind these
factors, with this scenario, it would save Checkpoint 100% on import tariff charges, which is
1.4 million Euros and this amount would be the trade –offs for persuading this alternative.
2. Import and claim for full tax refunds for shipments of the four product groups
As indicated by the colleague from printshop no.64, the Chinese government has recently
encouraged trade between the country and the rest of the world. Henceforth, once the
finished products are garment printed in China and re-export to other destination, claiming
for tax refund would allow Checkpoint to save 17% of VAT tax charges on all the four
product groups. In particular, Import duty and tax charges would be zero for RF and RFID
shipments while it helps to save 70% on import tariff charges applied for cardboard and self
adhesive shipment. Overall, the total import duty and tax charges diminish by 7%.
3. Import paper raw material for cardboard and self adhesive shipments, instead of
finished products
Apparently, the import duty rate for cardboard products has increased from 5-7.5%, which
signals the Checkpoint’s management that 2.5% additional charges will be the additional
costs for sourcing this product to China. Therefore, this alternative gives the option for
company to import at less duty charges by classifying and importing the base paper
material, instead of finished product-tags or labels.
In this case, art paper would be an option for import at 5%, which reduces 12% of duty and
tax charges on cardboard shipments while it’s 13% saving on tariff charges for self-adhesive
shipments. Overall, the total import duty and tax charges deduce by 3% or 40 thousand
Euros. This amount of saving would be the trade offs for manufacturing the cardboard and
self adhesive products with imported paper material in China.
(See Appendix 1: Alternative of HS Codes China)
4. Import with alternative transfer prices for cardboard shipments
The new calculation of transfer prices show that there is one alternative in terms of reducing
import duty and tax charges via adjustment of transfer price, in this case, this adjustment
belongs to cardboard shipments. Cardboard’s transfer price reduces from 8.38 to 7.49 Euro
51
per thousand units yields the saving of 9% on duty and tax charges. Overall, the total duty
and tax charges are saved by 0.4%.
Shipment Overview Alternative Import Duty and Tax Charges

Product Quantity Stock Import Alternative Alternative Alternative Alternative
Type shipped Value duty and 1-Import 2-Import HS code Transfer
(in tax scenario – scenario- for CB and Price
million charges Free trade tax refund SA
units) zone
Cardboard 126 707,102 182,274 0 53,038 160,494 176,509
Self- 138 560,915 144,576 0 42,069 126,295 144,576

adhesive
RF 122 2,703,056 459,519 0 0 459,519 459,519
RFID 69 3,675,186 624,782 0 0 624,782 624,782
Total 456 7,646,329 1,411,151 0 95,107 1,371,090 1,405,386

Amount
Expected 1,411,151 1,316,044 40,061 5,765
Savings
Table 16: 2012 China Alternative Import Scenarios
5.2.2 India
India’s import alternatives are addressed as following,
1. Import via trade zone for all product types
Importing the products via free trade zone is one of the best options in reducing total import
charges due on the shipments. Applied this scenario, the 100% of import duty and tax
charges are exempted. In other words, a saving of total import duty and tax charges of 654
thousand Euros, which means this saving amount will be the trade offs for obtaining the free
trade zone license.
2. Import with alternative transfer prices for cardboard and self adhesive shipments
Apparently, there are possibilities of saving import duty and tax charges by readjusting
transfer prices applied for cardboard and self adhesive shipments. In specific, by reducing
cardboard transfer price from 13.6 Euro- 12.1 Euro per thousand units and self adhesive
transfer price from 7.28-6.15 Euro thousand units, the printshop location can save 95
thousand Euros on duty and tax charges, or 15% saving.
52
Shipment Overview Alternative Import Duty and Tax
Charges
Product Quantity Stock Import duty Alternative 1-Import Alternative
Type shipped Value and tax scenario – Free trade Transfer Price
(in million charges zone
units)
Cardboard 69 955,380 277,060 0 245,263
Self- 71 518,382 150,331 0 126,997
adhesive
RF 28 781,916 226,756 0 226,756
RFID - - - - -
Total 169 2,255,679 654,147 0 559,016
Amount
Expected 654,147 95,131
Savings
Table 17: 2012 India Alternative Import Scenarios
5.2.3 Bangladesh
Bangladesh current import scenario is the most favorable scenario with zero duty and tax
charges. It’s not relevant to look for other alternatives since the scenario has been fixed and
applied apparently.
5.2.4 Turkey
Turkey has two import alternatives addressed as below
1. Import via free trade zone for all product types
At this moment, free trade zone alternative would let Checkpoint saves the rest of 18% VAT
charges since import tariff rate is already zero for cardboard and self adhesive products
while it appears generally low as 2.2% for RF and RFID products.
Applied this alternative scenario allows the company to visualize the saving of complete
amount of duty and tax charges. This amount 346 thousand Euros of saving would be
dedicated to the trade offs for obtaining the free trade zone license.
2. Import with adjustment on cardboard transfer prices
This scenario appear availability for cardboard shipments by a reduction of transfer price
from 9.86 to 9.34 Euro per thousand units. The total amount of duty and tax charges is
saved with 6 thousand Euros or in other words, a saving of 2%.
53
Shipment Overview Alternative Import Duty and Tax
Charges
Product Quantity Stock Import duty Alternative 1-Import Alternative
Type shipped Value and tax scenario – Free trade Transfer Price
(in million charges zone
units)
Cardboard 67 663,067 119,352 0 113,058
Self- 59 337,035 60,666 0 60,666
adhesive
RF 27 807,310 166,274 0 166,274
RFID - - - - -
Total 154 1,807,412 346,292 0 339,998
Amount
Expected 346,292 6,294
Savings
Table 18: 2012 Turkey Alternative Import Scenarios
5.3 Recommendation
5.3.1 Import
As indicated in the previous alternative chapter, for each of the location, there are possibilities in
reducing duty and tax charges, taken into account the trade- offs on other costs related.
However, the best occurrence alternative would be import via trade zone like the current import
scenario in Bangladesh. This approach would allow Checkpoint to avoid the 100% burden of
tariff charges.
Applied for 2012 shipments, would this saving of enteirely 2.4 million Euros on duty and tax
charges if the imports of all product groups are done via trade zones at all the location, be
enough for trading offs the free trade zone import licenses for China, India and Turkey? If it
does, this alternative should be carried on.
5.3.2 Outsource
Why be burdened by import scenarios whilst outsourcing would solve the import issues.
However, there is also question of several factors would affect locally stock management for
instance, quality control, time constraint, stock exposures, and several trade off costs. To have
an overview of some possibilities in terms of outsourcing, the estimates of production costs are
addressed below for review. However, to have more accurate estimate of costs for outsourcing,
further research and investigation need to be carried on. (18)(19)(20)
18
Vietnam Custom Mainpage: http://www.customs.gov.vn/English/Lists/Tariff/Search.aspx
18
Vietnam HS, Custom Tariff:
http://www.itpc.gov.vn/importers/how_to_import/tax/vietnam_customs_tariff_schedule_2013/Chapter_48.pdf/
mlfile_view
19
Indonesian Summary of Import Duties and Taxes Charges: http://www.indosight.com/blog/calculate-your-
import-tax-and-custom-duty/
19
Indonesia Custom Mainpage: http://www.beacukai.go.id/wwwbcgoid/index.html
19
Indonesia HS, Custom Tariff : http://eservice.insw.go.id/index.cgi?page=hs-code-information.html
54
(See Appendix 2: Figure 36: Alternative Outsource Location)
20
Taiwan HS, Custom Tariff : http://eweb.customs.gov.tw/RateWebEn/Search1.aspx
55
6. References& Appendices
6.1 Reference
1. APEC Retrieved July 16, 2013, from www.apectariff.org/
2. Bangladesh Tariff Commission (n.d.). Welcome to Bangladesh Tariff
Commission. Retrieved June 16, 2013, from http://www.bdtariffcom.org/
3. Checkpoint Bangladesh (2013). Bangladesh Invoice Sample.
4. Checkpoint China (2013). China Invoice Sample.
5. Checkpoint India (2013). India Invoice Sample.
6. Checkpoint Terborg (2013). CMC&CMJ Transfer Price Lists.
7. Checkpoint Terborg (2013). Transfer Price List.
8. Checkpoint Terborg (2013). CKP Label Glossary.
9. Checkpoint Terborg (2013). CMC&CMJ Overview Shipment.
10. Checkpoint Terborg (2013). RFID Shipments.
11. Checkpoint Terborg (2013). Standard Calculation Air Freight.
12. Checkpoint Terborg (2013). Standard Calculation Ocean Freight.
13. Checkpoint Terborg (2013). Standard Price.
14. Checkpoint Terborg (2013). Transaction File.
15. Checkpoint Terborg (2010). Zone for Export.
16. Checkpoint Turkey (2013). Turkey Freight and other Related Charged.
17. Checkpoint Turkey (2013). Turkey Sample Invoice.
18. Chinese Duty Rate checks (n.d.). 32151900 - 海关百搜- 全关通信息网. Retrieved from
http://www.qgtong.com/so/?ChannelID=1001&Keyword=32151900
56
19. Chinese HS Code Translate (n.d.). ???? > ??????. Retrieved July 16, 2013, from
http://service.customs.gov.cn/default.aspx?tabid=9409
20. Chinese Trade Agreement Duty Calculator (n.d.). ???????????????????.
Retrieved July 16, 2013, from
http://ftanew.mofcom.gov.cn/servlet/TaxRateServlet
21. Duty Calculator (n.d.). Worldwide HS Code Lookup, Alternative and Calculate
your import duty DutyCalculator. Retrieved July 16, 2013, from
http://www.dutycalculator.com
22. European Council (n.d.). TARIC Consultation. Retrieved July 16, 2013, from
http://ec.europa.eu/taxation_customs/dds2/taric/taric_consultation.jsp?Lang=en
23. Hongkong Trade Development Council (2013). CEPA Your Springboard to
China.
24. India Custom Tariff (n.d.). Customs Tariff - 2012-13 - CBEC. Retrieved July 16,
2013, from http://www.cbec.gov.in/customs/cst2012-13/cst1213-idx.htm
25. Pfaar, M., & Wang, X. (2011). Chinese Bonded Areas: Choosing The Right
Location. ITS on the News.
26. Ping, L. (2013). Transfer Pricing, Custom Duties, and VAT Rules: Can We Bridge
the Gap?. Retrieved from http://oecd.org
27. PS64 (ZJG) (2013). Freight, Clearances, and other Duties Related Charged.
28. Turkey Custom Tariff (n.d.). T.C. Ekonomi Bakanl? Retrieved July 16, 2013, from
http://www.ekonomi.gov.tr/index.cfm?sayfa=mevzuat&bolum=F457B323-F279-
BC77-1441050E1016A125
57
29. Debund Laws Firm (2013). Bonded Import: What Drives Goods “One-Day-Trip”
to Hong Kong?. Chinese Import&Tax Calculation. Retrieved from
http://www.debund.com/info/bf7cbb53e64a47b8904581b5194aabb1
6.2 Appendices
Appendix 1: Alternatives of HS codes China
Table 19: Alternative of HS codes China
Appendix 2: Alternative Outsource Location
58
Location China India Bangladesh Turkey Vietnam Indo Taiwan
Trade-off X is Acceptable range for production cost (Euro/ 1000)

Budget
CB 3.32<x<5. 3.59<x<9. 2.76<x<6. 3.85<x<6. 4.09<x<7. 3.16<x<5. 4.28<x<5.79

28 55 17 08 39 08
SA 2.16<x<3. 2.45<x<4. 2.02<x<4. 3.41<x<5. 3.48<x<6. 2.33<x<3. 1.80<x<3.16
87 68 94 54 55 93
RF 18.89<x< 25.66<x< 20.74<x< 24.41<x< 28.37<x< 23.58<x< 21.47<x<24.02

23.80 35.97 31.68 31.84 33.51 29.94
RFID 46.59<x< - 44.00<x< - - - -

57.14 65.48
Figure 36: Alternative Outsource Location
59
60

Research Paper

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Research Paper

Uploaded by

Copyright:

Available Formats

Final Research Report

Full Name Khanh Tran Quoc Nguyen

 Cardboard/Paper tags or tickets,

2. Checkpoint 2012 Shipments Overview

2.2. General Information

2012 Quantity Shipped Overviews

BD CN IND TR BD CN IND TR BD CN BD CN IND TR

Figure 1: 2012 Quantity Shipped Overviews

Figure 2: 2012 Quantity Shipped Compositions

BD CN IND TR BD CN IND TR BD CN BD CN IND TR

Figure 3: 2012 Stock Value Overviews

2012 Stock Value Compositions

Figure 4: 2012 Stock Value Compositions

2012 China Stock Value Overviews

PS33 PS64 PS33 PS64 PS64 PS33 PS64

Figure 5: 2012 China Stock Value Overviews

Figure 6: 2012 China Stock Value Compositions

Figure 7: 2012 India Stock Value Overviews

Figure 8: 2012 India Stock Value Compositions

2012 Bangladesh Stock Value Overviews

PS36 PS36 PS36 PS36

Figure 9: 2012 Bangladesh Stock Value Overviews

2012 Bangladesh Stock Value Compositions

Figure 10: 2012 Bangladesh Stock Value Compositions

PS63 PS63 PS63

Figure 11: 2012 Turkey Stock Value Overviews

Figure 12: 2012 Turkey Stock Value Compositions

3. Research Objective A: Commodity Code (HS Code), Import Duty

3.1. Harmonized Commodity and Coding System (HS Code)

 Harmonized System nomenclature (HS nomenclature): is harmonized system

3.1.2. General Information

Table 1: General Rules of Harmonized System Commodity Code Overviews

3.2. Import Duty & Tax Charges Due

 Consumption tax: is the tax levied once purchasing goods

 Advance Trade VAT(ATV): Additional Import VAT tax.

 Advance Income Tax: Additional income tax

3.2.2. General Information

Turkey 4821.90.90.00.00 0%-General rate Total: 18% 31/12/2013

1. Import duty rate

2012 China Import Duty and Tax Charges Due

PS33 PS64 PS33 PS64 PS64 PS33 PS64

2012 China Import Duty and Tax Charges Due

1. Import duty rate

Table 8: 2012 India Import Duty and Tax Charges Rate

2012 India Import Duty and Tax Charges Due

1. Import duty rate

Self adhesive/Self adhesive

Radio Frequency(RF) tag or

Radio Frequency Integrated

2012 Bangladesh Import Duty and Tax Charges

1. Import duty rate

PS63 PS63 PS63

2012 Import Duty and Tax Charges Due Overviews

BD CN IND TR BD CN IND TR BD CN BD CN IND TR

CB PS33 PS64 RF PS33 PS64 RFID PS64 SA PS33 PS64 Total

Figure 22: 2012 China Non-Recoverable Costs Overviews

CB PS42PS44PS48PS65 RF PS42PS44PS48PS65 SA PS42PS44PS48PS65 Total

Figure 23: 2012 India Non-Recoverable Costs

Transport Standard Location Calculation Calculated Average

Figure 24: 2012 Bangladesh Non-Recoverable Costs

Figure 25: 2012 Turkey Non-Recoverable Costs

4 Understanding of Transfer Pricing in Relation with Import Duties

4.2 General Information