Procedures for destruction of goods by market management agencies according to legal regulations

1. What are perishable goods and items?

In Article 2 of Circular 173/2013/TT-BTC regulates perishable goods and items specifically:

Easily perishable goods and items include:

– Fresh food, easily spoiled, difficult to preserve storage;

– Flammable and explosive goods (gasoline, oil, liquefied petroleum gas and other flammable and explosive substances);

– Medicines, veterinary drugs, and plant protection drugs whose expiration date is less than 60 days according to the date stated on the packaging and label;

– Processed foods and other goods whose expiration date is less than 60 days 30 days according to the deadline stated on the packaging and labels;

– Goods of a seasonal nature (seasonal consumer goods, for holidays and New Year), high-end electronic goods (tablets, smartphones) and other goods and items that, if not handled immediately after the decision to temporarily hold or confiscate, will be damaged, unsellable or their shelf life will expire. use.

2. What are the procedures for destroying goods of the market management agency?

The destruction of goods by the market management agency in particular and the agency competent to handle administrative violations in general is stipulated in Article 3 and Article 4 of Circular 173/2013/TT-BTC guiding the implementation of management and handling of exhibits and means of administrative violations that are temporarily detained and confiscated according to administrative procedures. issued by the Minister of Finance:

“Article 3. Forms of handling evidence of administrative violations that are easily perishable goods and items

1. Destruction of damaged goods and items that are no longer of use value.

2. Direct sale (not through auction), except for cases where destruction is required as prescribed in Clause 1 This.”

“Article 4. Organizing the handling of evidence of administrative violations that are perishable goods and items

[…]

2. For goods and items handled in the form of destruction:

a) The person who issues the temporary detention decision establishes a Handling Council to destroy damaged goods and items specified in Clause 1, Article 3 of this Circular. The handling council is chaired by the person who issued the decision on temporary detention or an authorized person, and other members include: representatives of the financial agency at the same level or the financial agency in the area where the violation occurred (in cases where the violation is authorized by a superior financial agency or in cases where the person who issued the decision on temporary detention belongs to an agency not organized at the administrative level) and representatives of relevant professional agencies;

b) Form of destruction: Depends on the nature The nature and characteristics of goods and items and the requirements to ensure environmental hygiene, destruction is carried out in the following forms:

– Using chemicals;

– Using mechanical measures;

– Burning;

– Destroying burial;

– Other forms as prescribed by law.

c) The destruction of goods and items must be recorded in writing, with all signatures of the members of the Disposal Council. The main content of the minutes includes: grounds and reasons for destruction; time and place of destruction; participants participating in destruction; name, type, source, origin, quantity, current status of goods and items at the time of destruction; forms of destruction and other related contents.”

For goods other than damaged goods and items, the Ministry of Finance does not have specific instructions. Each agency will issue a process for destroying goods in this category.

3. Does destruction of goods in businesses have to be recorded?

On the business side, the process In fact, it is issued by the enterprise, but in order for these destroyed goods to be included in expenses, according to the provisions of Clause 2.1, Point b and C, Article 4 Circular 96/2015/TT-BTC specifically as follows:

“b) Goods damaged due to changes in natural biochemical processes, goods that have expired and are not compensated are included in deductible expenses when determined. taxable income.

Documents for goods damaged due to changes in natural biochemical processes, expired goods, are included in deductible expenses as follows:

– Record of inventory of the value of damaged goods prepared by the enterprise.

The inventory record of the value of damaged goods must clearly identify the value of damaged goods and the cause of damage; Type, quantity, value of recoverable goods (if any) accompanied by a list of import and export of damaged goods with confirmation signed by a legal representative of the business and responsible before the law.

– Compensation records for damages accepted by the insurance agency (if any).

– Records stipulating the responsibilities of the organization or individual that must compensate (if any). yes).

c) The above documents are kept at the enterprise and presented to the tax authority upon request.”