Under the Levy Scheme, there are two types of exemptions which include:

1. Type 1 Exemption - Exemption for Non-specified Goods; and
2. Type 2 Exemption - Exemption for Third Party Operator.

Through the above exemption arrangements, environmental levy shall not apply to plastic shopping bags provided to customers who make payment for non-specified goods at an exempted  counter  of a registered retail outlet (Type 1 Exemption) or  to customers who purchase any  goods offered for sale by  a third party  in an exempted  area of a registered retail outlet (Type 2 Exemption).

To provide a level playing field for retail outlets such as department stores that sell a  variety of non-specified goods such as fashions, shoes, electric appliances etc., prescribed retailers of these outlets may apply for exemption for those counters that would only check out non-specified goods at his/her qualified retail under the Ordinance.  Plastic shopping bags provided to customers who  check out non-specified goods at these counters are not subject to the levy.  These exempted counters are shown with “exempted counters” stickers (see example  below).  However, only non-specified goods could be checked out at these exempted counters.

A third party who operates within  a registered retail outlet is not part of the registered retailer and the Ordinance has a specific exemption provision to cater for this arrangement.  Plastic shopping bags provided to customers from  exempted areas within a registered retail outlet are not subject to the levy.  These areas are shown with “exempted area” stickers (see example below).

There are two types of exemptions. The criteria for exemption are as follows –

Type 1 Exemption:

1. the total floor area of the retail outlet in which only non-specified goods are displayed or offered for sale is more than 50% of the retail floor area of the retail outlet; and
    
2. each part of the area to be exempted is a cashier’s counter that accepts payment for non-specified goods only.

Type 2 Exemption:

1. the part of the area of the retail outlet to be exempted is used for the purposes of a business of a third party (not being the registered retailer) registered under the Business Registration Ordinance (Cap. 310);
   
 
2. that area is demarcated clearly by a counter and is used exclusively for the purposes of the third party’s business;
    
3. the name, trade name, trade mark or brand name of the third party is displayed conspicuously in that area;
    
4. that area is staffed by an employee of the third party; and
   
 
5. all plastic shopping bags provided from that area bear the name, trade name, trade mark or brand name of the third party.

A summary of the typical retail outlets where Type 1 and /or Type 2 Exemptions may  be found is presented below.