News corner: China’s new Tariff Law and implementing regulation of the Law of the PRC on the Protection of Consumer Rights and Interests

Dominic Hui

Ribeiro Hui, Shanghai

d.hui@ribeirohui.com

China’s New Tariff Law

On 26 April 2024, the Chinese State Council passed the Tariff Law of the People’s Republic of China (‘PRC Tariff Law’), which came into force on 1 December 2024. The new law consolidates existing rules in different documents and certain practices in one administrative law.

We outline some key points as follows:

1. the PRC Tariff Law codifies the powers for the Chinese government to impose tariffs when another country violates relevant trade agreements (Article 18);
2. the PRC Tariff Law codifies measures and powers imposing anti-dumping and countervailing duties on trade partners into the law for the first time (Article 54);
3. the new law clarifies the obligations of cross-border e-commerce platforms for tariff withholding (Article 3); and
4. the new law provides that the application of tariff rates shall comply with the corresponding rules of origin. (Article 11).

The original statute limitations period of one year for customs authorities to examine and challenge the amount of tax payable is now extended to three years from the date of payment or release of goods by taxpayers or withholding agents. This three years’ limitation does not apply to smuggling situations (Article 45).

5. The new law explicitly states that in sales of industrial equipment and machinery, warranty costs are now part of the taxable value of the goods (Article 26);
6. the new law also adjusted the wording of ‘duty-paid price (完税价格)’ to ‘taxable price (计税价格)’, to be consistent with wording under the domestic tax collection and management system; and
7. a penalty of between 50 per cent and three times the amount of tax due for withholding obligors who fail to withhold or collect taxes due was added.

Implementing regulation of the Law of People’s Republic of China on the Protection of Consumer Rights and Interests

The Implementing Regulation of the Law of the People’s Republic of China on the Protection of Consumer Rights and Interests (‘Implementing Regulation’) took effect on 1 July 2024.

The key points are as follows:

1. in case of recalls of products due to the defects which may cause personal injuries or damages to personal properties, the manufacturer or importer of the products shall develop a recall plan, release information about the product recall, inform the consumers about their rights and undertake all necessary fees of the consumers due to the recall of the products;
2. the seller is responsible for the product liability any free-of-charge products or services;
3. the sale of products in bundles should have a prominent notice to customers;
4. the warranty period is also regulated. For products that require installation, the warranty period shall begin on the day the installation is completed. In case of replacement, the warranty period for the new products shall start again from the date of completion of the replacement. The time for repair shall not be included in the said period of warranty;
5. standard Terms and Conditions provided by the sellers shall not unreasonably relieve the obligations of the seller, or restrict the following rights of the customers under the law;

(i)  the right to change or terminate the contract;

(ii)  the right to choose litigation or arbitration to resolve disputes; and

(iii)  the right to elect products or services from other sellers; and

6. the operators shall agree with the consumers in advance on the method, procedure and time limit for refunding deposits. Any unreasonable restrictions on refunding the deposits is prohibited. The operators shall promptly refund the deposits of a consumer if the conditions for refunding the deposits have been met.