Recently, the State Administration of Taxation ("SAT") has issued the Official Reply to Issues on the Issuance of Invoices for the Sale of State's Temporarily Stored Grains by Taxpayers (the "Reply").
The Reply expressly states that: 1. for grains temporarily stored by the State, if they are sold at a price lower than the inventory cost, enterprises not affiliated to the China Grain Reserves Corporation (SinoGrain) shall issue value-added tax (VAT) invoices to those affiliated to the SinoGrain according to the transaction price; however, when the aforesaid grains are sold at the inventory cost or at a price higher than that cost, enterprises not affiliated to the SinoGrain shall issue VAT invoices to those affiliated to the SinoGrain according to the inventory cost. 2. enterprises directly subordinate to the SinoGrain shall issue VAT invoices according to the transaction price of the State's temporary grain reserves to the buyers. In case of relevant issues that have arisen but not been resolved yet, the Reply shall apply.