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INCOME TAXES
 12 Months Ended
Sep. 30, 2011
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
19.
INCOME TAXES
 
Agritech and its subsidiary, State Harvest are incorporated in the British Virgin Islands and are subject to taxation under the British Virgin Islands.  State Harvest’s subsidiary and State Harvest’s variable interest entity, Beijing Origin and its majority owned subsidiaries (together, the “PRC entities”) were incorporated in the PRC and governed by the PRC laws.
 
The applicable tax rate of the PRC Enterprise Income Tax (“EIT”) was changed from 33% to 25% on January 1, 2008, according to the Corporate Income Tax Law.  The preferential tax rate previously enjoyed by the PRC entities is gradually transitioned to the new standard rate of 25% over a five-year transitional period.  In addition, article 28 of the new tax law stated that the income tax rate of the “high technology” company (high-tech status) is remained at 15%.
 
Preferential tax treatment of Beijing Origin as “high technology” company (High-tech Status) has been agreed with the relevant tax authorities.  Beijing Origin is entitled to a preferential tax rate of 15% which is subject to annual review. As a result of these preferential tax treatments, the reduced tax rates applicable to Beijing Origin Seed Limited for 2009, 2010 and 2011 are 15%.
 
According to the document Ji Ken Ban Zi (2008) No.125, Changrong is recognized as a “high technology” company, thus entitled to a preferential tax rate of 15% for the years ended September 30, 2009, 2010 and 2011.
 
Had all the above tax holidays and concessions not been available, the tax charges would have been higher by RMB3,450, RMB7,648 and RMB5,226, and the basic net income (loss) per share would have been lower (higher) by RMB(0.15), RMB 0.33  and RMB(0.23) for the years ended September 30, 2009, 2010 and 2011, respectively. The diluted net income (loss) per share for the years ended September 30, 2009, 2010 and 2011 would have been lower (higher) by RMB(0.15), RMB0.33 and RMB(0.23), respectively.
 
The Company’s liability for income taxes includes the liability for unrecognized tax benefits, interest and penalties which relate to tax years still subject to review by taxing authorities. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. Until September 30, 2011, the management considered that the Company had no uncertain tax positions affected its consolidated financial position and results of operations or cash flow except for the contingent US tax liabilities mentioned under note 22. The Company will continue to evaluate for the uncertain position in future. The estimated interest costs have been provided in the Company’s financial statements up to the year ended September 30, 2011. The Company’s uncertain tax positions are related to tax years that remain subject to examination by the relevant tax authorities and the major one is the China tax authority. The open tax years for examinations in China are 5 years.

The provision for income taxes expenses consists of the following:
 
   
Year ended
September 30,
  
   
2009
    
2010
    
2011
  
   
RMB
    
RMB
    
RMB
  
                   
Current
     580       4,046       6,991  
Deferred
     11,152       5,273       6,739  
                         
      11,732       9,319       13,730  
 
The principal components of the deferred income tax assets are as follows:
 
   
September 30,
  
   
2010
    
2011
  
   
RMB
    
RMB
  
Non-current deferred tax assets:
            
Net operating loss carry forward
     18,091       20,928  
Impairment on inventory
     3,935       3,634  
Others
     3,290       3,498  
                 
Non-current deferred income tax assets
     25,316       28,060  
Valuation allowances
     (15,550 )     (25,032 )
                 
Net non-current deferred income tax assets
     9,766       3,028  
 
The Company did not have any significant temporary differences relating to deferred tax liabilities as of September 30, 2010 and 2011.
 
A significant portion of the deferred tax assets recognized relates to net operating loss and credit carry forwards. The Company operates through the PRC entities and the valuation allowance is considered on each individual basis.
 
The net operating loss attributable to those PRC entities can only be carried forward for a maximum period of five years.  Tax losses of non-PRC entities can be carried forward indefinitely.  The expiration period of unused tax losses is as follows:
 
   
Year ended
September 30,
  
   
2010
    
2011
  
   
RMB
    
RMB
  
Calendar year ending,
            
2012
     11,694       11,694  
2013
     53,698       25,586  
2014
     -       188  
2015
     10,400       11,042  
Tax losses that can be carried forward indefinitely
     -       45,944  
                 
      75,792       94,454  
 
Reconciliation between total income tax expenses and the amount computed by applying the statutory income tax rate to income before taxes is as follows:
 
   
Year ended
September 30,
  
   
2009
    
2010
    
2011
  
   
%
    
%
    
%
  
                   
Statutory rate
     25       25       25  
Effect of preferential tax treatment
     34       (10 )     (550 )
Effect of different tax jurisdiction
     (157 )     4       307  
Permanent book-tax difference
     25       -       403  
Effect of changes of applicable tax rate
     -       -       -  
Change in valuation allowance
     (80 )     (5 )     998  
Under (over) provision in prior year
     38       (2 )     256  
                         
Effective income tax rate
     (115 )     12       1,439