Bonded Warehouse Scheme, provides mechanism to store dutiable goods in secured area without payment of duty while they are stores, manipulated or undergo manufacturing operations. These warehouses can be managed by state or private enterprises.
In this Article, Let’s Explore more about Bonded Warehouse Scheme.
In our blog Bonded Warehouse – A Game Changer for the manufacturing sector, we covered most of the aspects of bonded warehouse along with its relevance when compared to other existing schemes.
Today, we will be looking at some salient features and some Frequently Asked Questions (FAQ).
Overview of the Bonded Warehouse scheme
The Central Board of Indirect Taxes and Customs (CBIC) have launched a revamped and streamlined program to attract investments into India and strengthen Make in India and this program is based upon Section 65 of the Customs Act, 1962, which enables conduct of manufacture and other operations in a Customs bonded warehouse. The program has been introduced vide the Manufacture and Other Operations in Warehouse (no. 2) Regulations, 2019, (MOOWR, 2019) and explained through Circular-34/2019- Customs dated 01st October, 2019.
Customs Bonded Manufacturing Warehouse is a secured and customs licensed area/structure. At these warehouses the imported inputs, consumables, or capital goods are stored which can be used for manufacturing and further supply in indigenous and international market where the customs duty on such import is deferred.
Salient features of Bonded Warehouse Scheme
- No geographical limitation on where such units can be set up.
- A single application cum approval form for uniformity of practice with a single point of approval to set up the operations of such units.
- Improved liquidity with deferment of import duty and no interest liability.
- Allows procurement of GST compliant goods from the domestic market for use in manufacture and other operations in a Section 65 unit.
- A single digital account for ease of doing business and easy compliance.
- Enables efficient capacity utilization, as there is no limit on quantum of clearances that can be exported or cleared to the domestic market.
Bonded Warehouse Process
So, How Bonded Warehouse can be used?
Kempegowda International Airport, Bangalore, has recently opened India’s first on-airport public bonded warehouse. The warehouse is expected to reduce supply chain costs and facilitate trade in and around Bengaluru. The facility — covering an area of 10,000 square feet — is expected to help re-export of goods, in long-term storage of bonded cargo, to assist in partial clearances, and to allow labeling, packing, and repacking services.
In order to simplify processes and meet customer demands with the help of key stakeholders, including the Bengaluru Customs, BIAL has taken this step to set up India’s first on-campus Public Bonded Warehouse. While the warehouse facility will be under the jurisdiction of the City Commissionerate, of Bengaluru Customs. It is also regarded to reduce supply chain costs and facilitate trade at India’s IT hub and surrounding regions. With IT & Biotechnology (BT) companies, multinational firms, and retail brands in Bengaluru handling a large volume of imports, experts add that the new facility will play a significant role in boosting the economy of the region. Bengaluru Airport is also regarded as the busiest cargo terminal for manufacturers in South India.
Frequently Asked Questions about Bonded Warehouse
Other related schemes that may help you :
- EPCG – Export Promotion of Capital Goods
- Specialties of Special Economic Zones (SEZ)
- Why should you get an AEO certification today?
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