These Administrative Measures on Collection and Verification of Information on Assessable Price for Calculation of Consumption Tax on Cigarettes hereby promulgated shall enter into effect as of March 1st， 2003.
　　Jin Renqing
　　Commissioner of State Administration of Taxation
　　January 23， 2003
　　Administrative Measures on Collection and Verification of Information on Assessable Price for Calculation of Consumption Tax on Cigarettes
　　Article 1 With a view to standardizing the assessable prices of cigarettes in the calculation of consumption tax， achieving fair tax burdening， promoting competition， and ensuring the State's fiscal revenue， these Measures are hereby formulated in accordance with the Law on Administration of Taxation of the People's Republic of China， Provisional Regulations of the People's Republic of China on Consumption Tax， and the Circular of the Finance Ministry and the State Administration of Taxation on Adjustment of the Policy on Consumption Tax on Cigarette Products （Cai Shui [2001] No 91）。
　　Article 2 The scope for the collection of information on cigarette prices includes all brands and specifications of cigarettes produced and sold by cigarette manufacturers.
　　Article 3 The price information on cigarettes to be collected includes transfer price， assessable price for calculation of consumption tax， selling price， verified price， retail price， and other relevant information.
　　1. "Transfer Price" refers to the price agreed upon between a cigarette manufacturer and a purchaser on the cigarette trading market.
　　2. "Assessable price for Calculation of Consumption Tax" refers to the assessable price already published by the State Administration of Taxation for calculation of consumption tax on cigarettes.
　　3. "Selling Price" refers to the price at which a cigarette manufacturer actually sells its cigarettes.
　　4. "Verified Price" refers to the price of a cigarette which is not traded at China Tobacco Trading Center and the relevant provincial cigarette trade （ordering） fairs but whose price shall be verified by the tax authorities.
　　5. "Retail Price" refers to the retail price at which a retail unit sells a locally manufactured cigarette， or the retail price at which a retail unit in a place where a cigarette is exclusively sold sells the cigarette （including VAT）。
　　"Retail Unit" refers to a third degree cigarette wholesale and retail unit within the tobacco system and a commercial retail unit （hereinafter referred to as "Retail Unit"）。
　　Retail Unit does not include hotels， restaurants， expensive entertainment places， and sole proprietorships.
　　Article 4 Information on transfer price， assessable price for calculation of consumption tax， selling price， verified price， and other relevant information shall be collected by the competent State Tax Bureau of the place where the cigarette manufacturer is located.
　　Article 5 Information on cigarette retail price shall be collected by the following State Tax Bureaus in the city， county （district） and provincial capital of the place where the cigarette manufacturer is located：
　　1. Information on the retail prices of cigarettes at the place where the cigarette manufacturer is located shall be collected by the competent State Tax Bureau of the place where the manufacturer is located；
　　2. Information on the retail prices of cigarettes in provincial capital cities shall be collected by the State Tax Bureaus of the relevant provincial capital cities；
　　3. As for cigarettes produced by a manufacturer which are specially designated for sale in other areas within the province， the State Tax Bureau of the place where the manufacturer is located shall promptly report to the State Tax Bureau of the province where the manufacturer is located （including separate planning cities）， and the provincial State Tax Bureau shall notify the State Tax Bureaus of the area where the cigarettes are to be sold to collect the retail prices. The collected retail prices shall be reported to the provincial State Tax Bureau within the prescribed time for consolidation （Forms and filling-in requirements shall be specified by the provincial State Tax Bureau）；
　　As for cigarettes produced by an manufacturer which are specially designated for sale outside the province， the competent State Tax Bureau of the place where the manufacturer is located shall promptly report to the provincial State Tax Bureau， and the provincial State Tax Bureau shall contact the State Tax Bureau of the province where the cigarettes are to be sold. Information on the retail prices shall be collected by the State Tax Bureau of the province where the cigarettes are to be sold， and fed back to the State Tax Bureau of the province where the manufacturer is located for consolidation （Forms and filling-in requirements shall be specified by the State Tax Bureau of the province where the manufacturer is located）。
　　Article 6 For each brand or specification of cigarette， more than six （including six） retail units shall be selected as retail price information collection points， among which， more than three （including three） retail units shall be in the place where the manufacturer is located， and more than three （including three） retail units shall be in the provincial capital city. If the manufacturer is located in the provincial capital city， the State Tax Bureau of the provincial capital city must select more than six （including six） retail units as retail price information collection points.
　　For cigarettes sold exclusively to areas outside of the province， the information collection points shall be selected by the State Tax Bureau of the province where the cigarettes are to be exclusively sold. For each brand or specification of cigarette， more than six （including six） retail units shall be selected as retail price information collection points.
　　Article 7 Standards for Collection of Cigarette Retail Prices：
　　1. Collection Standards for Cigarettes Packed in Cartons （200 Pieces）：
　　Price information on cigarettes packed in cartons sold by retail units can be collected according to the following standards：
　　25×（64+20）mm full packaging
　　25×（64+20）mm hard cellophane paper small box， flip top， cellophane wrapping line （"flip top hard box" in short）
　　25×（69+25）mm full packaging
　　25×（69+25）mm flip top hard box
　　25×（72.5+27.5）mm full packaging
　　25×（72.5+27.5）mm flip top hard box
　　25×64mm full packagingCigarettes without Filters）
　　2. For cigarettes sold by retail units which are packed in packages other than the above standards， their retail prices shall be calculated with reference to those of cigarettes packed in cartons （200 Pieces）。
　　3. The retail price shall be calculated based on the weighted average of the sales quantity and amount of the brand of cigarette sold by all retail price information collection points during the price collection period. The formula is as follows：
　　Retail Price of A Certain Brand or Specification of Cigarette＝∑Turnover of the Brand of Cigarette Sold at Each Information Collection Point ∑Quantity of the Brand of Cigarette Sold at Each Information Collection Point
　　Article 8 Within the same month as a manufacturer launches a new brand or specification of cigarette into the market， it must report to the competent State Tax Bureau of the place where it is located about the brand or specification of the cigarette and areas where the cigarette is to be sold so as to facilitate collection of the price information.
　　Article 9 Price Information Collection Period
　　1. Price information collection period shall be a fiscal year， commencing from January 1st through December 31st of each year.
　　2. Price information collection period for a new brand or specification of cigarette shall be a consecutive period of twelve months， starting from the month following the launch of the brand or specification of cigarette into the market.
　　3. For cigarettes whose assessable prices have been verified by the State Administration of Taxation but need to be readjusted due to any change in the market transaction price， the price information collection period shall be six consecutive months， starting from the month during which the retail price of the brand or specification of cigarette dropped.
　　Article 10 The competent State Tax Bureau of the place where the cigarette manufacturer is located needs to fill out the following forms and submit the completed forms to the provincial State Tax Bureau within the prescribed time limit. The various provincial State Tax Bureaus shall determine the time， procedure and manner of submission.
　　1. Economic Indicator Survey Form for Cigarette Manufactures （Appendix 1）， Economic Indicator Survey Form for Cigarette Manufacturers （New Brands or Specifications） （Appendix 2）， and Economic Indicator Survey Form for Cigarette Manufacturers （Brand Whose Transaction Price Has Fluctuated） （Appendix 3）。
　　2. Price Information Collection Form for Retail Units （Appendix 7）
　　3. Consolidated Price Information Collection Form for Retail Units （Appendix 8）
　　Article 11 The provincial State Tax Bureau needs to fill out the following forms and submit them to the State Administration of Taxation before the end of the month following the expiration of the information collection period：
　　1. Consolidated Economic Indicator Survey Form for Cigarette Manufacturers （Appendix 4）， Consolidated Economic Indicator Survey Form for Cigarette Manufacturers （New Brand or Specification） （Appendix 5）， Consolidated Economic Survey Form for Cigarette Manufacturers （Brand Whose Transaction Price Has Fluctuated） （Appendix 6）。
　　2. Consolidated Price Information Collection Form for Retail Units （Appendix 9）， Consolidated Price Information Collection Form for Retail Units （New Brand or Specification） （Appendix 8）， and Consolidated Price Information Collection Form for Retail Units （Appendix 10）。
　　3. Application Form for Assessable price for Calculation of Consumption Tax on New Brand or Specification of Cigarette （Appendix 11）。
　　4. Application Form for Assessable price for Calculation of Consumption Tax on Brand of Cigarette Whose Price Has Fluctuated （Appendix 12）。
　　Article 12 For a cigarette whose assessable price has been verified but whose production has been ceased， the provincial State Tax Bureau must indicate this information in the "Remarks" column of the submitted materials. If， for the same brand or specification of cigarette， there is any discrepancy between the transfer price agreed upon at China Tobacco Trading Center and the transfer price struck at the provincial cigarette trade fair， the provincial State Tax Bureau must indicate the transfer price struck at the provincial cigarette trade fair in the "Remarks" column.
　　Article 13 Within one month after the expiration of the trial sale period （one year） for a new brand or specification of cigarette， the cigarette manufacturer， in applying for assessable price for consumption tax on the new brand or specification of cigarette， shall make a written application to the competent State Tax Bureau， and the competent State Tax Bureau shall then report to the State Administration of Taxation on a hierarchical basis.
　　Article 14 Within one month after the expiration of the price information collection period， cigarette manufactures， in applying for adjustment of assessable price for calculation of consumption tax， shall make a written application to the competent State Tax Bureau， and the competent State Tax Bureau shall then report to the State Administration of Taxation based on a hierarchical basis.
　　Article 15 For a cigarette whose assessable price has been verified by the State Tax Bureau， no verification of assessable price is necessary under normal circumstances.
　　Article 16 For a new brand or specification of cigarette， and a cigarette whose assessable price has been verified by the State Administration of Taxation but needs to be readjusted due to any fluctuation in the transaction price， the assessable prices for calculation of consumption tax shall be verified by the State Administration of Taxation.
　　Article 17 Assessable price for calculation of consumption tax shall be determined on the basis of the retail price of a cigarette less the average costs and profits in the cigarette circulation channel. The average cost rate and average profit rate in the circulation of cigarette is temporarily determined as 45%. The formula for determining assessable price for calculation of consumption tax is as follows：
　　Assessable price for Calculation of Consumption Tax of a Certain Brand or Specification of Cigarette = Retail Price÷（1+45%）
　　Article 18 For a cigarettes which is not traded at China Tobacco Trading Center and various provincial tobacco trade fairs and thus without a transfer price， the assessable price for calculation of consumption tax shall be determined by the provincial State Tax Bureaus according to the following formula：
　　Assessable price for A Certain Brand or Specification of Cigarette = Market Retail Price of the Brand or Specification of Cigarette÷（1+35%）
　　Article 19 "New Brand of Cigarette" in these Measures refers to the following cigarette：
　　1. A cigarette for which a new trademark was registered at the Trademark Office of the State Administration of Industry and Commerce after November 1st， 2000.
　　2. A cigarette for which a trademark was registered at the Trademark Office of the State Administration of Industry and Commerce before November 1st， 2000 and was used for the first time after November 1st， 2000.
　　3. A cigarette， which has been registered at the Trademark Office of the State Administration of Industry and Commerce and used， but whose assessable price has not been verified by the State Tax Bureau.
　　Article 20 "New Specification of Cigarette" in these Measures refers to a cigarette whose registered trademark brand remains unchanged but any of the following items has been changed after November 1st， 2000： （1） Cigarette Specifications （filter， cigarette length）； （2） Package Specifications （Flip top hard box）； （3） Exterior Identification （patterns， words， color， ingredients， etc）； （4） Packaging Materials （Paper， Metal， Plastic， Wire， etc）； and （5） Adjustment of Formula.
　　Article 21 "Cigarette Whose Transaction Price Has Fluctuated" in these Measures refers to a cigarette whose retail price has been in decline for more than six consecutive months and whose retail price has dropped by more than 20%.
　　Article 22 Within two months after the expiration of the prescribed time limit for reporting new brand or specification of cigarettes， the State Administration of Taxation shall publish the assessable price of the new brand or specification of cigarette.
　　Article 23 In April and October of each year， the State Administration of Taxation shall publish the assessable price for calculation of consumption tax of a cigarette whose transaction price has fluctuated so that readjustment of the assessable price for calculation of consumption tax is necessary.
　　Article 24 The time to publish the assessable price for calculation of consumption tax of a cigarette which is not traded at China Tobacco Trading Center and various provincial tobacco trade fairs and thus without a transfer price shall be determined by the provincial State Tax Bureaus at their own discretion.
　　Article 25 For cigarettes whose assessable prices for calculation of consumption tax have been published by the various State Tax Bureaus， if the selling prices at which the manufacturers actually sell the cigarettes are higher than their assessable prices for calculation of consumption tax， the tax shall be assessed based on the actual selling prices； if the selling prices are lower than their assessable prices for calculation of consumption tax， the tax shall be assessed on the basis of their assessable prices for calculation of consumption tax.
　　Article 26 These Measures do not apply to imported cigarettes.
　　Article 27 The State Administration of Taxation shall have the authority to interpret these Measures.
　　Article 28 These Measures shall take effect as of March 1st， 2003. If there is any conflict between the Circular on Administrative Measures on Examination of Assessable price for Calculation of Consumption Tax on Cigarettes （Trial） （Guo Shui Fa [2000] No 130） and these Measures， these Measures shall prevail.
　　Appendices：
　　1. Economic Indicator Survey Form for Cigarette Manufacturers
　　2. Economic Indicator Survey Form for Cigarette Manufacturers （New Brand or Specification）
　　3. Economic Indicator Survey Form for Cigarette Manufacturers （Brand Whose Transaction Price Has Fluctuated）
　　4. Consolidated Economic Indicator Survey Form for Cigarette Manufacturers
　　5. Consolidated Economic Indicator Survey Form for Cigarette Manufacturers （New Brand or Specification）
　　6. Consolidated Economic Indicator Survey Form for Cigarette Manufacturers （Brand Whose Transaction Price Has Fluctuated）
　　7. Price Information Collection Form for Retail Units
　　8. Consolidated Price Information Collection Form for Retail Units
　　9. Consolidated Price Information Collection Form for Retail Units （New Brand or Specification）
　　10. Consolidated Form for Price Information Collection for Retail Units （Brand Whose Transaction Price Has Fluctuated）
　　11. Application Form for Assessable price of New Brand or Specification of Cigarette for Calculation of Consumption Tax
　　12. Application Form for Assessable price of Brand Whose Transaction Price Has Fluctuated for Calculation of Consumption Tax