Exemption From Customs Duty

This exemption from customs duty applies to Licensed Manufacturing Warehouse (LMW) in Malaysia

Raw materials or components eligible for duty exemption

Customs duty exemption is given to all raw materials / components used directly in the manufacturing process of approved product from the initial stage of manufacture until the finished product is finally packed ready for export. This also includes packaging materials and casings (e.g. casings for calculators and cameras).

The list of raw materials / components that can be imported and brought into the Licensed Manufacturing Warehouse without the payment of customs duty is issued together with the Licensed Manufacturing Warehouse licence. Addition or deletion to the list can be made from time to time.

Goods subjected to excise duty incorporated in the final products, may be exempted from excise duty. Application for such exemption of the excise duty shall be made to the Treasury for consideration under Section 10(a) of the Excise Act 1976.

Raw materials or components not eligible for duty exemption

1. Forklifts
2. Fuel oils
3. Building and construction materials
4. Office equipment/furniture
5. Generator and related accessories
6. Wearing apparels (e.g. uniforms for factory workers)
6. Food and Drinks
7. Materials for machinery and factory cleaning purpose

Exemption for Machinery equipment

Machinery equipment required for the direct manufacturing process of approved final products are entitled to exemption from customs duty and sales tax under Item 88, Customs Duty (Exemption) Order 1988 and Item 83 Schedule B Sales Tax (Exemption) Order 1980.

Taken from Kastam Diraja Malaysia website