China Tax Guide-Taxation in China

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1).Notes on the Taxable Scope of Some Goods for VAT
GSF 151 [1993]

I. Staple foods
This is the general term for all staple foods. This taxable scope covers wheat， rice， maize （corn）， kaoliang， millets， soybeans and other food crops （barley， oats， etc.） and flour， husked rice， corn flour processed therefrom， but excluding re-processed food crops （such as dried noodles， fresh noodles， yun tun peals， etc.） and all types of cooked staple foods.

II. Edible vegetable oils

Vegetable oils are extracted from the roots， stems， leaves， fruits， flowers and embryos of plants and refined.

Edible vegetable oils include sesame oil， peanut oil， soybean oil， rape seed oil， rice bran oil， sunflower seed oil， cotton seed oil， corn embryo oil， tea oil （camellia oil）， linseed oil， and mixtures of part of the oils listed above.

III. Running water

Running water refers to water produced by waterworks after a series of processing including screening， segmentation， sterilization and provided to residents through pipelines.

Water used in agricultural irrigation or water sent by water diversion projects is not covered by this scope.

IV. Heat and hot water

Heat and hot water refer to air and water heated warm or hot water and heat with all sorts of fuel （such as coal， rock oil and other gaseous， liquid and solid fuels） and electricity， and heat energy exploited from natural resources such as geothermal energy and solar energy.

This scope also covers the heat and hot water recovered from industrial wastes.

V. Refrigerated air refers to cool ail refrigerated by machine and provided to homes through air-conditioning systems.

VI. Gas

Gas refers to the products through distillation or gasification of coal， coke， semi-coke and heavy oil.

Gas covers：
（1） Gas from coke ovens refers to the gas resulting from dry distillation in the coke oven.

（2） Gas from gas ovens refers to gas， mixed gas， mono-water-gas and bi-water-gas， etc.

（3） Liquefied gas refers to liquefied gas after compression.

VII. LPG refers to liquefied petrol gas produced from hydrocarbon generators liquefied through compression in the course of oil refining， the major contents of which are propane， butane， and butylene， etc.

VIII. Natural gas

Natural gas， the inflammable gas of hydrocarbons deposited underground， the major contents of which are methane， ethane and others of methane series， and propane， butane and pentane and other heavy hydrocarbons.

Natural gas includes gas from gas fields， oilfields， coal deposits and other natural gas.

IX. Marsh gas

Marsh gas is an inflammable gas with methane as its main content which is produced through natural decomposition from plant debris in sealed containers.

March gas includes both natural marsh gas and artificially produced marsh gas.

X. Coal products for civil use

They include coal balls， coal cakes， coal cakes with perforated holes and kindling coal.

XI. Books， newspapers and magazines

Books， newspapers and magazines are paper prints of words， pictures， graphs and tables， including：

（1） Books： those books of words and pictures printed by publishing houses with the approval of the State Press and Publication Administration and printed with internationally accepted book serial numbers.

（2） Newspapers： journals printed with the approval of the State Press and Publication Administration and registered with the press and publication administrative departments of the provinces， autonomous regions and municipalities directly under the State Council， each newspaper carrying a domestic press serial number starting with CN.

（3） Magazines： those printed with the approval of the State Press and Publication Administration and registered with the press and publication administrative departments of the provinces， autonomous regions and municipalities directly under the State Council， each newspaper carries a domestic press serial number starting with CN.

XII. Feed

Feed refers to products and processed products as feed for domestic animals.

This scope covers：
（1） Mono feed： this refers to a product from one kind of animals， plants， microbes and products processed from one kind of them.

（2） Mixed feed： this refers to feed by mixing two or more than two types of feed.

（3） Composite feed： this refers to feed of a mixture of ingredients to maintain different proportions of nutrients to meet the need of different animals at different stages of growth and made into specific forms with the ingredients evenly mixed.

Grains， feed additives used as direct feed to animals are not covered by this scope of goods.

XIII. Chemical fertilizers

Chemical fertilizers include：

（1） Chemical nitrogenous fertilizer， including primarily urea， and ammonium sulphate， ammonium nitrate， ammonium bicarbonate， ammonium chloride， calcium ammonium， and ammonia liquor， etc.

（2） Phosphate fertilizer， mainly including phosphorous fertilizer， calcium super phosphate （including calcium super phosphate and concentrated super phosphate）， calcium magnesium phosphate， cinder phosphate fertilizer， etc.

（3） Potash fertilizer， primarily including potassium sulphate， muriate of potash， etc.

（4） Composite fertilizer， mainly composite fertilizer containing two or more types of elements of nitrogen， potash and phosphate produced through chemical or mechanical processes. Those containing two elements are called bi-component fertilizer and those containing three elements are called triple-component fertilizer， and those containing more than three are termed multi-component fertilizer， primarily including nitraphosphate fertilizer， ammonium sulphate， phosphate potash fertilizer， calcium magnesium phosphate fertilizer， di-ammonium phosphate fertilizer， tri-ammonium phosphate powder， nitrogen， phosphate and potash composite fertilizer， etc.

（5） Micro-element fertilizer， mainly fertilizers that contain boron， manganese， zinc， copper， molybdenum or other trace elements needed for plant growth.

（6） Other fertilizers： fertilizers other than those cited above.

XIV. Pesticides

Pesticides include chemicals for the control of pests to farming， forestry and chemicals for the control of the growth of grass， such as pesticides， germicide， herbicide and plant auxin， which may be made from herbs， microrganic pesticide， health drugs， other farm-use chemicals and chemical preparations.

XV. Farm-use plastic sheets

Plastic sheets to be used to cover seedbeds and hothouses.

XVI. Farm machinery

They include machines， semi-mechanized tools and tools used in all branches of agriculture including also forestry， animal husbandry， sideline production， fish farming， etc.

Farm machinery includes：

（1） Tractors： They include tractors driven by diesel engines for farming activities and field transportation， including wheel tractors， caterpillar tractors， hand tractors and mechanical farming vessels.

（2） Land working machines： They include machine-drawn ploughs， harrowers， disc ploughs， compressors， combine tillers， soil mixers， and other farm work machines.

（3） Machines for field construction， specifically those machines to be used in capital construction on crop land， including ditch diggers， pipeline layers， bulldozers， land levelers， etc.

（4） Planting machines： They include seeders， rice translators， planters， plastic sheet spreaders， complex seeders， crop sprouts preparing machines， etc.

（5） Machines for plant protection and field management， including powder dusting machines， chemical-spraying machines， fog sprayers， pruning machines， cultivators， cultivator-seeders， fertilizer applying machines， etc.

（6） Harvesting machines： including harvesters of cereals， cotton， tubers， sugarcanes， tealeaves， oil-bearing crops， etc.

（7） Machines on farmyards： including threshers， screens， driers， seed selectors， etc.

（8） Irrigation and drainage machines： all types of machines for irrigation and drainage on farm land and stock farms， also including well diggers， water sprinklers， semi-mechanical water pumping equipment， etc.

This scope does not cover machinery made with farm and sideline produce as raw material.

This scope does not cover machinery that processes industrial products with farm produce and farm sideline products as raw material.

（9） Machines for processing farm produce and agricultural sideline products： machines for the primary processing of farm products which after primary processing remain farm produce and products of agricultural sideline products， including tea processing machines， husking machines， cotton ginning machines and balers， edible fungi cultivators， small grain processors， etc.

This category does not include those machines using farm products as raw material to produce industrial products.

（10） Farm transport machines： all sorts of machines and equipment used for transport purpose on the farm， including carts drawn by tractors， draft animals and manual power， but excluding three-wheel trucks.

（11） Animal husbandry machines： all types of machines used in the production on dairy and stock farms， including grassland building machines， domestic animal feeding equipment， animal products collecting machines and equipment， etc.

（12） Fishery and fish farming machines： they include all types of fishing equipment and machinery， oxygenizing machines， bait makers， etc.

This category does not include mechanized fishing vessels.

（13） Forestry machines and equipment： they include forestry planting and nursing equipment， sapling planters， machines used in tree nurseries， etc. but excluding tree felling and logging machines.

（14） Small farm tools， including animal drawn ploughs and harrowers， spades， sickles， and other small farm tools.

This category does not cover auxiliary parts of farm machines.

2) Explanations of Business Tax Items (Provisional)
GSF [1993] No. 149
1. Transport Industry

The transport industry refers to the operations in which transport equipment or manpower and animal power are used to send goods or passengers to their destinations so that their spatial positions are transferred.

The scope of this tax item covers land transport， water transport， air transport， pipeline transport， loading， unloading and moving.

All labor activities related to transport operations are covered by this tax item.

（1） Land Transport
Land transport refers to the operations to transport goods or passengers by land （ground or underground）， including railway transport， highway transport， cableway transport， ropeway transport and other land transport.

（2） Water Transport
Water transport refers to the transport operations to transport goods or passengers by rivers， lakes， streams and other natural and man-made waterways or ocean routes.
Salvage is treated as waterway transport in tax collection.

（3） Air Transport
Air transport refers to the operations to transport goods or passengers by air routes.
General aviation operations and aviation ground services are treated as air transport in tax collection. General aviation operations refer to the operations to provide flight services to professional work， such as aerial photography， aerial survey， aerial exploration， aerial forest protection， aerial sowing and aerial man-made raining.

Aviation ground services refer to the operations of the airlines， airports， the civil aviation administration bureaus and the air terminals to provide navigational and other labor-related ground services to Chinese and foreign airplanes or other flying vehicles that fly in China or stop over at the airports in China.

（4） Pipeline Transport
Pipeline transport refers to the operations to transport gas， liquid and solid substances by pipeline facilities.

（5） Loading， Unloading and Moving
Loading， unloading and moving refer to the operations to use equipment or manpower and animal power to load， unload and move goods between transport equipment， between loading and unloading sites or between transport equipment and loading and unloading sites.

2. Construction Industry
The construction industry refers to the construction， installation and engineering operations.

The scope of this tax item covers construction， installation， repair， decoration and other engineering operations.

（1） Construction
Construction refers to the engineering operations to construct， reconstruct and expand buildings and structures. They include the installation or installation engineering operations for various equipment， pillars and operating platforms linked to buildings， and the engineering operations for kilns and metal structures.

（2） Installation
Installation refers to the operations to assembly and position production equipment， power equipment， hoisting equipment， transport equipment， transmission equipment， medical experimental equipment and other types of equipment. They include the installation engineering operations for workstations， ladders and railings linked to equipment， and the insulation， antiseptic treatment， thermal insulation， painting and other engineering operations for installed equipment.

（3） Repair
Repair refers to the repair， reinforcement， maintenance， improvement and other engineering operations for buildings and structures so that they can restore their original use values or extend their service life.

（4） Decoration
Decoration refers to the decoration and other engineering operations for buildings and structures so that they can look better or be used for specific purposes.

（5） Other Engineering Operations
Other engineering operations refer to all the engineering operations other than those mentioned above， such as working as agents for telecommunications projects， water projects， road repairs， dredging， drilling （boring）， building or structure dismantling， ground leveling， scaffolding， explosion and other engineering operations.

3. Financial and Insurance Industry

The financial and insurance industry refers to the financial and insurance operations.
The scope of this tax item covers finance and insurance.

（1） Finance
Finance refers to the monetary and financing activities， including loan， financial lease， financial commodity transfer， financial brokerage and other financial operations.
A. Loan refers to the business of lending money to others for use， including loans lent with funds at one's own disposal and onlending.

Loans lent with funds at one's own disposal refer to the operations to loan the self-owned capital or the attracted institutional and personal deposits to others for use.

Onlending refers to the operations to loan the borrowed capital to others for use.

The mortgage loan operations of the pawn industry are treated as the loan lent with funds at one's own disposal in tax collection， irrespective of their sources.

The loan operations of the people's bank are exempt from tax collection.

B. Financial lease refers to the equipment-leasing operations with the characteristics of financing and ownership transfer. In other words， the leasor purchases equipment and leases it to the leasee in accordance with the specifications， models， properties and other conditions required by the leasee； the ownership of the equipment belongs to the leasor and the right of its use belongs to the leasee during the term of contract； the leasee has the right to purchase the equipment at the residual value so as to have the ownership of the equipment upon the expiration of the contract and after the rental is fully paid. Financial lease is treated as this tax item in tax collection， no matter whether the leasor has sold the residual value of the equipment to the leasee.

C. Financial commodity transfer refers to the transfer of the ownership of foreign exchanges， securities or non-goods futures.

Non-goods futures refer to the futures other than commodity futures and precious metal futures， such as foreign exchange futures.

D. Financial brokerage refers to the operations to work as the agents for financial operations.

Other financial operations refer to the financial operations other than those mentioned above， such as bank settlement and bill discount. The acts of making deposits or purchasing financial commodities are exempt from business tax.

（2） Insurance
Insurance refers to the operations to use the funds collected by contracts to compensate the economic interests of the insured.

4. Posts and Communications Industry

The posts and communications industry refer to the operations to exclusively handle information transmission.

The scope of this tax item covers posts and telecommunications.
（1） Posts

Posts refers to the operations to transmit material information， including the letter or parcel transmission， postal remittance， newspaper and magazine circulation， postal matter selling， postal savings and other postal services.

A. Letter or parcel transmission refers to the operations to transmit letters or parcels and the operations related to letter or parcel transmission.

Letter transmission refers to the operations to receive and mail letters， postcards and printed matters.

Parcel transmission refers to the operations to receive and mail parcels. The operations related to letter or parcel transmission refer to mailbox leasing， imported letter or parcel processing， overdue parcel safekeeping， attached goods carrying and other operations related to letter or parcel transmission.

B. Postal remittance refers to the operations to transmit and pay the remittance vouches for the remitters.

C. Newspaper and magazine circulation refers to the operations of the postal departments to subscribe， send and sell newspapers and magazines for the publishing units.

D. Postal matter selling refers to the operations of the postal departments to sell various articles （such as envelopes， letter paper， money order and postal packing material） when providing postal services.

E. Postal savings refers to the operations of the postal departments to handle savings.

F. Other postal services refer to the postal services other than those mentioned above.

（2） Telecommunications

Telecommunications refers to the operations to transmit information by using electronic transmission equipment to transmit electronic signals， including telegraph， fax， telephone， telephone installation， telecom articles selling and other telecom services.

A. Telegraph refers to the operations to use electronic signals to transmit written data and related services. They include telegraph transmission， telegraphic line and equipment leasing， telegraphic line and equipment repair， telegraph delivery， telegraph decoding， outgoing or incoming telegraph checking， and outgoing telegraph copying.

B. Fax refers to the operations to use electronic transmission equipment to transmit the original copies， including the transmission of data， charts， photos and authentic works.

C. Telephone refers to the operations to use electronic transmission equipment to transmit languages and the related operations. They include wire telephone， wireless telephone， paging telephone， telephone line and equipment leasing and repair， or working as the agents for leasing radio circuits and television channels.

D. Telephone installation refers to the operations to install or move the telephone sets for the users.

E. Telecom articles selling refers to the operations to sell the special and general telecom articles （such as telegraphic paper， telephone directory， telegraphic delivery register， telecom equipment and materials， telephone sets） while providing telecom services.

F. Other telecom services refer to the telecom services other than those mentioned above.

5. Cultural and Sports Industries

The cultural and sports industries refer to the operation of cultural and sports activities.
The scope of this tax item covers the cultural industry and the sports industry.

（1） Cultural Industry
The cultural industry refers to the operation of cultural activities， including the performing， broadcasting and other cultural activities.

The operation of tourist venues is treated as the cultural industry in tax collection.
A. Performing refers to the operations to conduct performing activities including drama， songs and dances， fashion， fitness， acrobatics， folk arts， martial art and sports.

B. Broadcasting refers to the operations to broadcast works through radio stations， television stations， audio systems， closed-circuit television， satellite communications and other wireless or wire devices and the screening of the programs in cinemas， theaters， video halls and other grounds.

The broadcasting of advertisements is not covered by this tax item in tax collection.

C. Other cultural activities refer to the operation of the cultural activities other than those mentioned above. They include the exhibition and training activities， the literary， art and scientific lectures and symposiums， and the library book and document lending.

D. The operation of tourist grounds refers to the ticket-selling at the parks， zoos， botanical gardens and other tourist venues.

（2） Sports Industry
The sports industry refers to the operations to hold sports competitions and provide venues for sports competitions or sports activities.

Providing venues for sports activities and sports competitions by leasing is not covered by this tax item.

6. Entertainment Industry
The entertainment industry refers to the operations to provide venues and services for entertainment activities.

The scope of this tax item covers the operation of the song halls， dance halls， karaoke halls， music tea rooms， billiard halls， golf ranges， bowling centers， amusement parks and other entertainment venues， and the provision of services to customers at the entertainment venues.

A. Song Hall
A song hall refers to a venue where the customers sing songs for self entertaining with the accompaniment of an orchestra.

B. Dance Hall
A dance hall refers to a venue where the customers dance.

C. Karaoke Hall
A karaoke hall refers to a venue where the customers sing and dance for self entertaining with the accompaniment of the music pieces played by audiovisual equipment.

D. Music Tea Room

A music tea room refers to a venue which provides the customers with both music entertainment and tea， coffee， alcoholic drinks and other drinks.

E. Billiard， Golf and Bowling Venues
The billiard， golf and bowling venues refer to the venues where the customers play billiards， golf and bowling.

F. Amusement Park
An amusement park refers to a venue where amusement activities （such as shooting， hunting， horse-back riding and game playing） are held.

The catering and other services provided by the above entertainment venues to the customers for their entertainment activities are all covered by this tax item.

7. Service Industry
The service industry refers to the operations to use equipment， tools， venues， information or skills to provide services to society.

The scope of this tax item covers agency， hotel， catering， tourism， warehousing， leasing， advertising and other service industries.

（1） Agency Industry
The agency industry refers to the operations to act as the agents of the consignors to handle the consigned matters， including buying and selling goods， handling import and export， introducing services and offering other agent services.

A. Working as the agents for buying and selling goods refers to the operations to buy or sell goods on consignment， make settlements according to the actually bought or sold amounts， and charge commissions.

B. Working as the agents for handling import and export refers to the operations to handle the import and export of commodities or labor on consignment.

C. Introducing services refers to the fact that the intermediaries introduce two parties for business talks or other matters.

D. Other agent services refer to the operations to work as the agents for handling the matters other than those mentioned above.

Financial brokerage and the newspaper and magazine circulation of the postal departments are not covered by this tax item.

（2） Hotel Industry
The hotel industry refers to the operations to provide accommodation services.

（3） Catering Industry
The catering industry refers to the operations to provide the customers with catering services with both services and venues.

The services provided by restaurants， dining halls and other catering venues for the self-entertaining singing and dancing activities of the customers while they are dining are treated as the "entertainment industry" tax item in tax collection.

（4） Tourist Industry
The tourist industry refers to the operations to provide the tourists with boarding， lodging， transportation， guiding and other tourist services.

（5） Warehousing Industry
The warehousing industry refers to the operations to use warehouses， goods yards and other venues to store and keep goods for the customers.

（6） Leasing Industry
The leasing industry refers to the operations to consign the venues， premises， articles， equipment or facilities to other people for their use within a specified period.
Financial lease is not covered by this tax item.

（7） Advertising Industry
The advertising industry refers to the operations to use books， newspapers， magazines， radio， television， films， slide shows， road signs， show windows， neon lamps， light boxes and other means to promote commodities， service items， cultural and sports programs， notices， statements and other matters and to provide related services.

（8） Other Service Industries
Other service industries refer to the operations to provide services other than those mentioned above， including showering， haircutting， washing， dying， photography， fine art， picture mounting， transcription， typing， engraving， calculation， testing， experiment， laboratory test， sound recording， photocopying， blueprinting， designing， drawing， surveying， prospecting， packing and consulting.

Aerial prospecting， drilling prospecting and blast prospecting are not covered by this tax item.

8. Transfer of Intangible Assets
The transfer of intangible assets refers to the act of transferring the ownership or use right of the intangible assets.

Intangible assets refer to the assets that do not possess material forms but can bring about economic interests.

The scope of this tax item covers the transfer of land-use rights， trademark rights， patent rights， non-patented technologies， copyrights and business reputations.

（1） Transfer of Land-Use Rights
The transfer of land-use rights refers to the act that the land users transfer their land-use rights.

The act that the landowners sell their land-use rights or return their land-use rights to the landowners is exempt from business tax.
Land leasing is not covered by this tax item.

（2） Transfer of Trademark Rights
The transfer of trademark rights refers to the act of transferring the ownership or use right of the trademarks.

（3） Transfer of Patent Rights
The transfer of patent rights refers to the act of transferring the ownership or use right of the patent rights.

（4） Transfer of Non-Patented Technologies
The transfer of non-patented technologies refers to the act of transferring the ownership or use right of the non-patented technologies.

The act of providing the technologies without ownership is not covered by this tax item.

（5） Transfer of Copyrights
The transfer of copyrights refers to the act of transferring the ownership or use right of works. The works here include written works， graphic works （such as pictorial books and albums）， and audiovisual works （such as master films and videotapes)

（6） Transfer of Business Reputations
The transfer of business reputations refers to the act of transferring the use right of the business reputations.

The acts of making stock investment with intangible assets， participating in accepting the profit distribution of the investors and jointly sharing investment risks are exempt from business tax. But the transfer of this stock right is covered by this tax item.

9. Selling of Immovable Properties
The selling of immovable properties refers to the act of transferring the ownership of the immovable properties with compensation.

Immovable properties refer to the properties that cannot be moved and whose nature and shape will change after being removed.

The scope of this tax item covers the selling of buildings or structures and the selling of other land attachments.

（1） Selling of Buildings or Structures
The selling of buildings or structures refers to the act of transferring the ownership of buildings or structures with compensation.

The selling of buildings by transferring the limited property rights or permanent use rights is treated as selling of buildings.

（2） Selling of Other Land Attachments
The selling of other land attachments refers to the act of transferring the ownership of other land attachments with compensation.

Other land attachments refer to the land-attached immovable properties other than buildings or structures.

The act of a unit to donate its immovable properties to other people without compensation is treated as selling of immovable properties.

The act of transferring the use right of land occupied by immovable properties when selling these immovable properties is treated as selling immovable properties in tax collection.

The act of making stock investment with immovable properties， participating in receiving the profit distribution of the investors and sharing the investment risks is exempt from business tax. However， the transfer of this stock right is covered by this tax item.

The leasing of immovable properties is not covered by this tax item.

3) Annotations on the Collection Scope of Consumption Tax

GSF [1993] No. 153
I. Cigarettes
Products produced with tobacco as raw material， no matter which kind of auxiliary material is used， fall into the collection scope of this tax item. Four specific items involving grade-A cigarette， grade-B cigarette， cigar， and cut tobacco are covered by this tax item.

Cigarette refers to machine or hand-rolled ordinary cigarettes and cigar cigarettes prepared by cutting various kinds of tobacco into cut tobacco， mixing them evenly in compliance with the recipe， adding sugar， wine， spice and other auxiliary materials， and rolling them with white cigarette paper， brown cigarette paper， and enamel paper or reconstituted tobacco.

1. Grade-A Cigarette
Grade-A Cigarette refers to cigarette sold at a price over RMB780 （including RMB780） per box （50000 pieces）

The selling price of cigarettes of different packages and specifications is calculated on the basis of each box （50000 pieces)

2. Grade-B Cigarette
Grade-B Cigarette refers to cigarette sold at a price below RMB780 per box （50000 pieces）

The selling price of cigarettes of different packages and specifications is calculated on the basis of each box （50000 pieces)

3. Cigar
Cigar refers to tobacco product rolled by machine or by hand with air-cured tobacco as raw material or with air-cured and cured tobacco as raw materials， using tobacco or cigarette paper or reconstituted tobacco as inner cigarette wrapper， and tobacco as outer cigarette wrapper. Cigar is classified into fully-wrapped cigar and semi-wrapped cigar in accordance with the different materials used for inner wrapper.

The collection scope of consumption tax on cigar covers cigar of various specifications and types.

4. Cut tobacco
Cut tobacco refers to tobacco products for sale and smoking without going through the process of manufacturing， except for fermentation and storage after cutting tobacco into thread， grain， sheet， and powder or any other shapes and adding auxiliary materials.

The collection scope of consumption tax on cut tobacco covers unrolled tobacco in bulk with tobacco leaf as the raw materials， such as pipe tobacco， mohe tobacco， tobacco powder， shredded tobacco for waterpipe， yellow and red shredded cut tobacco.

II. Wine and alcohol
Six specific items of grain spirit， potato spirit， yellow rice and millet wine， beer， other wines， and alcohol are included in this tax item.

1. Grain spirit
Grain spirit refers to spirit brewed with sorghum， corn， rice， glutinous rice， barley， wheat， millet and qingke （high land barley） as raw materials by distillation after saccharification and fermentation.

2. Potato spirit
Potato spirit refers to spirit brewed with potato， cassava， sweet potato， taro， and Chinese yam by distillation after saccharification and fermentation.

The spirit brewed with sugar beet as the raw material will be levied in compliance with the tax on potato spirit.

3. Yellow wine
Yellow wine refers to wine brewed with glutinous rice， round-grained non-glutinous rice， polished long-grained non-glutinous rice， rice， coarse rice， corn， wheat， and potato as raw materials through the process of heating， saccharification， fermentation and pressing. In accordance with differences in industrial processes， ingredients， and sugar content， yellow wine is divided into dried yellow wine， semi-dried yellow wine， semi-sweet yellow wine， and fully-sweet yellow wine.

The collection scope of consumption tax covers yellow wine made of various materials and Chinese liqueur with alcohol content above 12 degrees （including 12 degrees

4. Beer
Beer refers to wine containing carbon dioxide brewed with barley or other grains as raw materials added with hop through saccharification， fermentation， and filtration. Beer can be divided into processed， raw， and fresh beer in correspondence with different methods of disinfection.

The collection scope of consumption tax on beer includes various kinds of packed beer and beer in bulk.

Tax on non-alcohol beer is levied in light of beer.

5. Other wines
Other wines refer to various wines with alcohol content above 1 degree， other than grain spirit， potato spirit， yellow wine， and beer. The collection scope of consumption tax covers bran spirit， spirits made of other raw materials， Chinese liqueur， re-produced wine， fruit wine， sparkling wine， and medicinal liquor etc.

（1） Bran spirit refers to spirit brewed with various grain brans.
Tax is levied on spirit brewed with barnyard millet in light of bran spirit.

（2） Spirit made of other raw materials refers to spirit brewed with vinegar dregs， sugar dregs， sugar waste， sugar-beet dregs， powder dregs， potato peel， and other leftover bits and pieces， fruits such as grape， mulberry， and acorn core， wild plants and other substitutes， as well as sugar cane and sugar.

（3） Chinese liqueur refers to wine with alcohol content below 12 degrees brewed by pressing with glutinous rice， rice， and coarse rice as raw materials through the process of heating， saccharification， fermentation （distiller's yeast fermentation）

Tax shall be levied on wine with alcohol content over 12 degrees in light of yellow wine.

（4） Re-produced wine refers to wine mixed or made with spirit， yellow wine， and alcohol as the base， added with juice， spice， pigment， medicinal materials， tonic， sugar and condiment， such as， various mixed wine， brewage， and tonic wine.

（5） Fruit wine refers to various wines brewed with fruits as main raw materials through fermentation and filtering.

（6） Sparkling wine refers to liquor with alcohol content above one degree made of juice， essence， pigment， acid material， wine （or alcohol）， sugar （or saccharin） added with carbon dioxide.

（7） Medicinal wine refers to wine made or mixed with spirit and yellow wine as the base and added with various medicinal herbs in accordance with the standard promulgated by medical and health departments.

6. Alcohol
Alcohol， or ethylalcohol， refers to colorless transparent liquid produced by raw materials containing starch or sugar， through distillation after the processes of saccharification and fermentation， with alcohol content above 95 degrees. Ethylene separated from oil gas can also be used as the raw material to produce ethylalcohol by synthetic method.

The collection scope of consumption tax for alcohol covers industrial， medical， and edible alcohol produced by distillation and synthetic method.

III. Cosmetics

Cosmetics refer to products used for adorning and beautifying human body. Varied in types and raw materials， they can be classified into two categories of facial beautifier and aromatic cosmetics. Facial beautifiers include lipstick， nail polish， rouge， eyebrow pencil， blue eye oil， eyelash commodity， and complete set of cosmetics； the aromatic cosmetics include perfume and perfume essence etc.

The collection scope of consumption tax for cosmetics includes：
Perfume， perfume essence， face powder， lipstick， nail polish， rouge， eyebrow pencil， lip pencil， blue eye oil， eyelash， and complete set of cosmetics.

1. Perfume and perfume essence refer to liquid aromatic cosmetics mixed with alcohol and essence as main raw materials.

2. Facial powder refers to cosmetic for adorning the face. It is divided into powder， cake， and liquid according to the shape. Quality facial powder box contains colored velvet powder puff， while the colored facial powder box contains a casket of rouge and rouge puff， on which tax is levied in light of face powder.

3. Lipstick is a cosmetic used to finish lips. Most of the lipsticks are red， and some are white. There is also a kind of alterant lipstick made of cosin dyestuff.

4. Nail polish， or nail beautifier， is a kind of colored or colorless oily liquid cosmetic used to adorn and protect nails.

5. Rouge is a cosmetic applied to the cheek skin. It is categorized into powdered rough cake， transparent cream rouge， and emulsified cream rouge.

6. Eyebrow pencil is a cosmetic used to adorn the eyebrow. It is divided into pencil-like and tubular eyebrow pencils.

7. Lip pencil is a cosmetic used to adorn the lips.

8. Blue eye oil is a cosmetic applied to the eyelid and skin of the eye sockets. It is made with fat， wax， and paint as the main raw materials in colors of blue， green， and brown. Since blue color is most widely used， it is called blue eye oil. Tax levied on eye shadow cream， eye shadow gel， and eye shadow powder is in light of blue eye oil.

9. Eyelash commodity， also called eyelash cream， is a cosmetic used to adorn the eyelash. The product is divided into solid and emulsified ones mainly in the colors of black or brown.

10. Complete set of cosmetics refer to series of cosmetics for difference purposes packed in a box. They are generally packed in either exquisite metal or plastic boxes. The box often contains a mirror， a comb， and other make-up tools. The complete set is equipped with multiple functions and is convenient in using. Make-up oil， cleansing oil， grease paint， hair gel， and hair bleacher are not covered in this scope of tax collection
.
IV. Skin and hair care products

Skin and hair care products are products applied to human skin and hair for moistening， physical protection， and cleansing.The collection scope of consumption tax includes facial cream， facial oil， toilet water， hair oil， hair cream， hair waving agents， rinse essence， facial cleansing milk， scrub， hair dressing treatment， facial mask， massage cream， shampoo， hair conditioner， scented soap， bath foam， hair gel， mousse， as well as other skin and hair care products.

1. Facial cream is an emulsified cream of "oil-in-water" type. Various facial creams， according to different structures， properties， and usages， can be roughly divided into four types of alkalescence powder， subacidity powder， medicinal and nutrient facial creams.

2. Facial oil， or "facial moisturizer or skin moisturizer"， is a kind of oily "water-in-oil" emulsified agent. Containing large amount of fat， it is applicable in cold resistance， moisturizing， and preventing skin fissure.

3. Toilet water is an aromatic skin care product with the effect of disinfection， deodorization， antipruritic property， and acting as talcum powder. It is prepared by mixing the main materials of alcohol， water， and essence. The main difference between toilet water and essence is that less amount of essence， no more than 5% （including 5%）， is used in toilet water than in perfume. A large amount of alcohol with low density is added， and a small amount of cassia oil， herbal agastachis oil， and other raw materials is to be added； for perfume， a large amount （over 5%） of essence is needed， and less alcohol is used but with high density.

4. Hair oil， or hair tonic， is a product used to protect and beautify hair.

5. Hair cream is an emulsified cream for hair care. It can be divided into "oil-in-water" type and "water-in-oil" type according to the structure of its emulsified agent.

6. Hair waving agents are daily-use chemicals to keep the curly style of hair. Hair waving agent used in permanent hair styling （or cold wave） is called perm agent， while those used for cooling treatment is called cold setting lotion. Tax levied on hair gel will be in light of hair waving agents.

7. Rinse essence， also called tint， is a product used in dyeing hair and maintaining a definite color and luster. Rinse essence can be divided into three categories of temporary， semi-permanent， and permanent rinse essence corresponding to the time of color sustaining after hair dyeing.

8. Shampoo constitutes mainly of salt-mixture of ammonium hydroxide with triethanolamine of sulfate fatty alcohol， twelve-acid isopropyl alcohol amides， formaldehyde， polyoxyethlene， lanoline， perfume， pigment， and water.

Tax shall be levied on shampoo cake and powder in light of shampoo.

9. Scented soap （including liquid scented soap）， also called toilet soap， is a medium and high-grade detergent with a strong fragrance. It is made through chemical reaction （saponification） with animal and vegetable oils， caustic soda， rosin， and essence as main raw materials under a given temperature. It is varied in colors and designs， and is divided into ordinary toilet soap， super fatted soap， and medicinal soap in conformity with different components.

Tax is levied on various kinds of scented soaps.

10. Other various kinds of hair and skin care products refer to various hair and skin care products with the functions of moisturizing and protecting skin and hair not included in the listed products.

V. Valuable jewelry and gem and jade

The collection scope of consumption tax covers gold and silver jewelry and various unearthed， polished， and processed gems and jade.
1. Gold and silver jewelry include：
Pure gold and silver jewelry as well as inlaid ornaments （including artificial gold and silver and synthetic gold and silver jewelry） made of gold， silver， platinum， gem， pearl， diamond， jadeite， coral， agate， and other rare materials and metals.

2. The variety of gems and jade includes：
（1） Diamond： Diamond is a crystal mineral made completely of single element of carbon through crystallization. It is also the only gemstone composed of a single element. Diamond is of octahedral cleavage， that is， four directions of a plane octahedral crystal and generally takes the shape of a ladder. Diamond has a very stable chemical nature， not to dissolve easily in acid and alkali. When heated to about 1770 degrees in pure oxygen， however， it will resolve. Heated to 1，700 degrees in vacuum， it will resolve into graphite. Diamond can be divided into transparent， semitransparent and opaque ones. Diamond of gem quality shall be colorless and transparent， flawless or with little flaw. It may be of the color of slightly light yellow or very light brown color. The rarest color is natural pink， followed by the blue and green colors.

（2） Pearl： When foreign substance enters mollusk of the shellfish category living in sea water or fresh water， its outer membrane produces a kind of nacre under stimulation （mainly calcium barbonate）， which will wrap up the tiny foreign matter layer by layer and gradually form it into a small bead， and that is pearl. The colors of pearl mainly are white， pink and light yellow， with a unique luster. Its surface glitters with iris-like pearly-luster. Large pearls with white color， smooth surface with luster， round shape， and hard texture are most valuable.

（3） Tophus： tophus， a gemstone whose color depends on its constituting elements， is a kind of completely-hydrated copper-aluminum phosphate. Its molecular formula is Cual6 （PO4）4（OH）85H2o. Tophus is opaque， while the lower part is semi-transparent. The polished side has a luster of grease or glass， while the fracture is in dark luster. Tophus can be categorized into Persian， American， Mexican， Egyptian tophias and wire green tophus.

（4） Lapis lazuli is a mineral of the square albite family； its molecular formula is （Na， Ca） 7-8 （Al， Si） 12 （O， S） 24（SO4）， C12C12o（OH）2（OH）2， in which Na is often replaced by potassium partially， while sulfphorus is partially replaced by sulfate radical， chlorine， or selenium. Lapis lazuli is divided into Persian， Russian or Spanish， and Chilian papis lazuli.

（5） Gem opal： It is categorized into opaline in mineralogy. Its molecular formula is SiO2onH2O. The bleak is gorgeous in its changeable color， because the small balls of SiO2 in opal are neatly arranged like raster， which causes white light to diffract and decentralized into chromatic spectrum when the white light shines over it. The red opals are especially rare. The variety of opals consists of white， black， crystal， fire， jelly or muller's opal， water， boulder， and matrix opal or opaline……

（6） Olivine： Olivine is a gemstone whose color depends on its constituting elements. Colors of pure green， yellow-green， and brown-green are most common. No olivine is colorless. Its molecular formula is （Mg. Fe）2SiO4. Olivines include chrysolite， topaz， forsterite， fayalite， "evening emerald"， and sinhalite.

（7） Feldspar： Felspar is divided into two main types of potash feldspar and plagioclase feldspar in light with mineralogical classification. Their molecular formulas are KAlSi3O8 and NaAlSi3O8 respectively. Feldspar includes moonstone or audularia， feldspar sunstone or aventurine， labradorite， and amazonite.

（8） Jade： Jade is divided into jadeite and nephrite. Jadeite is a silicate of sodium and aluminum， whose molecular formula is NaAl（SiO3）2. Nephrite is a calcium and magnesium silicate with water content， whose molecular formula is CaMg5（OH）2 （Si4O11）2.

（9） Quartz： Quartz is a gemstone whose color depends on the trace element it contains. Pure quartz is colorless and transparent， whose molecular formula is SiO2. Quartz is categorized into crystal， iris or schiller quartz， sagenitic quartz or sagenite， amethyst， citrine， smoky quartz or hoelite， rose quartz， aventurine quartz， dumortrierite quartz， milky quartz， azure quartz or sapphire quartz， tiger's eye， hawk's eye， astrobolos， and asteriated quartz.

（10） Chalcedony： It is also called cryptocrystalline quartz with molecular formula of SiO2. Chalcedony is categorized into moonstone， chrysoprase， red agate， sadarchate， bloodstone， prase， agate， onyx， jade， plasma， chrysocolla， and silicified wood.

（11） Garnet： Garnet is known for its similarity with pomegranate seed in the shape and color of its crystal. Its general molecular formula is R3M2（SiO4）3. Garnet is categorized into almandine， pyrope， pyralmandite， spessartine， andradite， and uvarovite.

（12） Zircon： It is of red， yellow， blue， and purple colors with a molecular formula of ZrSiO4.

（13） Spinel： It is of yellow and green colors and colorless， whose molecular formula is MgAl2O4. Spinel is categorized into red spinel， spinel of ruby color or ruby spinel， spinel of purple or luster similar to almandine， pink or rosy spinel， vinegar spinel， blue spinel， spinel of sapphire color or saphhire spinel， spinel similar to alexandrite， black spinel， and zeilanite.

（14） Topaz： Topaz is a fluorosilicate of aluminum and is classified under orthorhombic system. Its molecular formula is Al2 （F， OH）2SiO4. The categories of topaz include brownish yellow to yellowish brown， light blue to pale blue， pink， colorless， and topaz of other colors.

（15） Tourmaline： It is an extremely complicated boroaluminosilicate， possibly containing one or several kinds of the following elements， magnesium， sodium， lithium， iron， potassium， or other metals. Different proportions of these elements result in difference in colors. There is a wide variety of colors of red， green， blue， yellow and orange， colorless or white， black， parti-colored tourmalines， cat's eye tourmaline， and chameleonite.

（16） Chrysoperyl： Chrysoperyl is a mineral belonging to the category of aluminate under the family of spinel. Its main component， berillium alumina， is categorized under rhombic system. Its molecular formula is BeAl2O4. Chrysoperyl is classified into alexandrite， cat's eye stone， alexandrite cat's eye， as well as some other variations.

（17） Beryl： Beryl is colorless in a pure state； variants have different colors because of the existence of micro metallic oxide. Usually， it is turned into emerald when chromiumoxide or vanadium oxide is contained， while aquamarine is formed due to the coloring of iron protoxide. It becomes morganite due to the existence of magnesium， while heliodor is formed due to the coloring of ferrous oxide. Its molecular formula is Be3Al2（SiO3）6. Beryl is divided into emerald， aquamarine heliodor， MAXIXE beryl， heliodor， morganite， and other transparent varieties， e.g.， cat's eye beryl and asteriated beryl.

（18） Corundum： Corundum is a quite ordinary mineral. Besides asteriated corundum， only the semi-transparent and transparent variants can be called gemstones. Its molecular formula is Al2O3. Corundum is red with the content of chromium oxide， blue with titianium and ferrous oxide， yellow with ferrous oxide， orange with chromium and ferrous oxide， green with iron and titanium oxide， and purple with chromium， titanium， and iron oxide. Corundum is categorized into ruby， asteriated ruby， sapphire， colorful sapphire， and asteriated sapphire.

（19） Amber： Amber， an organic substance， is a petrified rosin of ancient trees. Its molecular formula is C40H64O4. Amber is divided into sea amber， pit amber， clean amber， lump amber， greasy amber， turbid amber， foamy amber， and bony amber.

（20） Coral： Coral is another biogenic gem material. It is formed by the tree-like calcium skeleton of a coral insect accreted by tiny thalassic animal population.

（21） Gagate： Gagate is a variant （composed mainly of carbon and containing hydrogen and oxygen） of lignite. It is made of drifting wood through consolidation. The drifting wood sinks onto the seabed， turns into small grain mud deposit， and then is transformed into hard shale， which is called jet rock. Gagate is biogenic and noncrystalline. It is in dark luster on the coarse surface and in glassy luster on the polished surface.

（22） Tortoise shell： Tortoise shell is noncrystalline and is in greasy or ceraceous luster with harness of 2.5.

（23） Synthetic corundum： Synthetic corundum refers to artificial material basically similar with natural corundum in physical， optical， and chemical properties.

（24） Synthetic gemstone： Synthetic gemstone refers to artificial gemstone basically similar with natural gemstone in physical， optical， and chemical properties. Synthetic gemstones are categorized into synthetic rutile， strontium titanate， yttrium aluminium garnet， gadolinium gallium garnet， synthetic cubic zircon， synthetic sapphire， synthetic spinel， synthetic rutile， synthetic alexandrite， synthetic diamond， synthetic emerald， synthetic opal， and synthetic quartz.

（25） Composite stone： Composite stone is a gemstone composed of two different materials glued or combined together. The category of composite stone is divided in accordance with the nature of the materials used in composition. Composite stone is divided into the composite stone of garnet and glass， substitutes of emerald， opal， asteriated sapphire， and diamond， and various other composite stones of imitated gem.

（26） Imitations of glass.

VI. Firecrackers and fireworks

Firecracker is an explosive product made of gunpowder tightly wrapped in several layers of paper and connected to a lead wire.

Fireworks refer to pyrotechnic compound loaded in packaged container with other chemicals. The smoke and fire spray out in various colors on ignition， and some undergo constant changes of images. Fireworks are categorized into small ground ones and large aerial fireworks.

The collection scope of consumption tax covers various firecrackers and fireworks. Generally， there are 13 categories， i.e.， spraying， revolving， revolving and soaring， rocketing， pearl-spinning， joss-stick， small fireworks， smoky， toy-shaped， ordinary firecrackers， striking firecrackers， compound fireworks， large festive fireworks.

Consumption tax is not levied on starting paper used in sports games， and lead wires of firecrackers.

VII. Gasoline

Gasoline is a major category of light oil products. It is obtained from natural or artificial petroleum through processes of desalination， fore-running， catalytic cracking， and concoction. It is a colorless and light yellow liquid， combustible and explosive easily with a strong volatility. It can be divided into straight-run gasoline and cracked gasoline according to different production installations applied. After concoction， it is made into various kinds of gasoline for different purposes. It can also be divided into motor gasoline， aviation gasoline， starting gasoline， and industrial gasoline（solvent gasoline） in accordance with their usages.

The collection scope of consumption tax involves motor， aviation， and starting gasoline.

Industrial gasoline （solvent gasoline）， used mainly as a solvent， is not covered by the scope.

VIII. Diesel oil

Diesel oil is a major category of light oil products. It is obtained from natural or artificial petroleum through processes of desalination， fore-running， catalytic cracking， and concoction. It is combustible and explosive easily but with a lower volatility than gasoline. It is divided into light diesel oil， heavy diesel oil， military diesel oil， and agricultural diesel oil according to different purposes.

The collection scope of consumption tax includes light diesel oil， heavy diesel oil， agricultural diesel oil， and light military diesel oil.

IX. Vehicle tires

Vehicle tires refer to inner and outer tires used in various kinds of vehicles， trailers， special vehicles， and other motor vehicles.

The collection scope of consumption tax covers：
（1） Tires for light passenger vehicles；
（2） Tires for heavy trucks， buses， and trolley buses；
（3） Tires for vehicles used in mines and for construction；
（4） Tires for special vehicles （refer to off-road tires used in off-road vehicles running on unmetalled road， snow field， or desert）；
（5） Tires for motorcycles；
（6） Tires for various kinds of trailers；
（7） Tires for machine shop vehicles；
（8） Tires for other motor vehicles；
（9） General tires for vehicles， agricultural tractors， reapers， and walking tractors.

X. Motorcycles

The collection scope of consumption tax covers：
1. Light motorcycle， referring to two-wheeled motor vehicle whose maximum design speed is no more than 50 km/hr and the total working capacity of the engine cylinder does not exceed 50 ml.

2. Motorcycle， referring to two or three-wheeled motor vehicle whose maximum design speed is more than 50 km/hr， total working capacity of the cylinder exceeds 50 ml， and unloaded quality does not exceed 400kg （the unloaded quality of regular pedicab with a driver's cab and special vehicle is free from this limitation）

（1） Motor bicycle： refers to the motor cycle equipped with one driving wheel and one driven wheel.

A. Ordinary motorcycle： ordinary motorcycle refers to the motorcycle with a striding frame， double saddle， and the basic diameter of the wheel rim no less than 304 mm， which is suitable for driving on highways or city road.

B. Mini motorcycle： mini motorcycle refers to the motorcycle with a seating or striding frame， single or double saddle， and the basic diameter of the wheel rim no larger than 254mm， which is suitable for running on highways or city roads.

C. Off-road motorcycle： off-road motorcycle refers to the motorcycle with a striding frame， a wide steering wheel， cross-country tires， and wide space between remaining vertical wheels and from the ground， which is suitable for driving in off-highway areas.

D. Ordinary racing motorcycle： it is a motorcycle with a striding frame， a narrow steering wheel， saddle leaning to the back， which is installed with an engine of large power and high speed and is specialized for speed-racing on the special athletic track.

E. Mini racing motorcycle： it is a motorcycle with a seating or striding frame and the basic diameter of the wheel rim no larger than 254mm， which is installed with a c-engine and is specialized for speed-racing on special athletic track.

F. Off-road racing motorcycle： it is a motorcycle with off-road performance and installed with a large-power engine， which is specialized for speed racing in off-highway area.

G. Special motorcycle： it is a remodelled two-wheeled motorcycle for special tasks， such as the clear-the-way motorcycle.

（2） Side tricycle： it is a motor tricycle with a sidecar installed on one side of a two-wheeled cycle.

A. Ordinary side tricycle： it is a motorcycle with the structure of a side tricycle for carrying personnel or cargoes.

B. Special side tricycle： it is a side tricycle installed with special equipment and used for special tasks， such as police tricycles， and fire tricycles.

（3） Regular tricycle： It is a motor tricycle with two back wheels installed evenly with the front wheel and a fixed carriage.

A. Ordinary regular tricycle： it is a motorcycle with the structure of a regular tricycle and used in carrying personnel or cargoes， such as， passenger and freight vehicles.

B. Special regular tricycle： it is a regular tricycle installed with special equipment and used in particular tasks， such as tank tricycle， dumper tricycle， and refrigerator tricycle.

XI. Cars

Car refers to four or more-wheeled vehicle without track or stringing which is driven by power device and used mainly in carrying personnel and personal belongings.

The collection scope of consumption tax includes：
1. Sedan car： it refers to four-wheeled car with seats distributed between two axles， which is used for carrying personnel and their personal belongings.

The collection scope of consumption tax on sedan car includes mini-cars （the cylinder capacity， or air displacement hereinafter<1000ml）；ordinary sedan cars （1000ml≤cylinder capacity<2200ml）； limousines （the cylinder capacity≥ 2200ml）and sports cars.

2. Off-road vehicle： it refers to the vehicle with four-wheel drive and a high trafficability performance.

The collection scope of consumption tax on off-road vehicle includes light off-road vehicle （the cylinder capacity<2400ml）； high-quality off-road vehicles （the cylinder capacity≥2400ml） and sports vehicle.

3. Light bus， or station wagon： it refers to vehicle with a rectangular box-type carriage， the length of car body longer than 3.5m but smaller than 7m， and the passenger seats （excluding the driver's seat） less than 22.

The collection scope of consumption tax on light bus covers mini bus （the cylinder capacity<2000ml）， and medium bus （the cylinder capacity≥2000ml）。
Various trucks， special cars （such as emergency ambulance and break-down van） assembled， remodelled， or remade with the chassis of the above-mentioned taxable vehicles are excluded from the collection scope of consumption tax.

Author: Hexie Editor: Huangping Inspector: Carlson Update date: 5/5/2009

inel， blue spinel， spinel of sapphire color or saphhire spinel， spinel similar to alexandrite， black spinel， and zeilanite.