Gushan Environmental Energy to assess impact of new Chinese consumption tax exemption

Gushan Environmental Energy, a producer of biodiesel in China, announced that it is currently in the process of assessing the effect of a recently issued notice on consumption tax from the Chinese Ministry of Finance and the Chinese State Administration of Taxation.  The notice regarding the exemption from consumption tax on pure biodiesel made from waste animal fats or vegetable oils was issued on December 24, 2010, and became effective immediately. 

It  clarifies that pure biodiesel made from waste animal fats or vegetable oils is exempted from consumption tax in China, and that such exemption will be implemented with retroactive effect to January 1, 2009.  According to this notice, any consumption tax paid on pure biodiesel made from waste animal fats or vegetable oils prior to the issuance of the notice will be refunded.  On December 24, 2010, the Ministry of Finance issued a statement which specified that the consumption tax exemption described in the notice is aimed at supporting the development of the renewable resources sector, alleviating petroleum supply shortages and enhancing environmental and ecological protection in China. 

Gushan is in the process of assessing the immediate impact of this notice on its business operations and production plans and expects to make an announcement regarding the implications of this notice following further evaluation by its management.

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