ESTABLISHING & MANAGING PRIVATE BONDED WAREHOUSES UNDER INDIAN CUSTOMS REGULATIONS
SJES101015 Dated 11th Oct’15
The guidelines for appointment of public bonded warehouses and licensing of private bonded warehouses are governed by the following Customs circulars of CBEC.
-Circular No. 68/95 (1 of 3 circulars), dated 15-6-1995
Key features pertaining to Private Bonded Warehouse:
-The requests for grant of licences for private bonded warehouses will be considered and decided at the level of the Commissioners without making any reference to the Board. The private bonded warehouse licences may be allowed without any restrictions regarding the type of goods to be warehoused. Hitherto, private bonded warehouse licences were allowed only in respect of goods which required specialized goods, goods requiring controlled temperature conditions, etc. From now onwards, irrespective of whether the goods fall in the above categories or not, the private bonded warehouse licences may be granted. The existing practice of allowing only industrial raw-materials/components to be warehoused in inland areas is also being relaxed. The Commissioners may carefully scrutinize the applications for grant of private bonded warehouse licences and if the applicant is financially sound, has good credibility, and has not been involved in custom or excise duty evasion in the preceding 5 years, in the normal course, a private bonded warehouse licence may be granted. This would, of course be subject to the condition that the premises are suitable and adequately secured and the applicant agrees to take the services of the customs officers on cost-recovery basis, if the services of the officer are required on a continuous basis (i.e. 9 AM to 6 PM) or on payment of MOT/Supervision charges, as the case may be.
other important circulars are as follows:
Circular No. 28/96-Cus. (2 of 3 Circulars), dated 14-5-1996
Circular No. 99/95, dated 20-9-1995
Key features pertaining to private bonded warehouses.
- The applications for private bonded warehouse licences may be classified in two categories. The first category being of those who want to store sensitive goods such as liquors, cigarettes, foodstuffs, consumables, etc. The second category is of those who do not store sensitive goods but store non-sensitive goods.
- GUIDELINES FOR STORING SENSITIVE GOODS:
The new applicants who are intending to store sensitive goods should be asked to produce a solvency certificate (not a reference or confidential certificates) from a scheduled bank of repute (i.e., other than a co-operative bank or a bank which has operations limited to a city, etc.) for a value of not less than rupees fifty lakhs (Rs. 50 lakhs);
Such warehouses should not be located in residential areas;
The premises must be carefully checked to ensure that they are secured against theft, pilferage or other risks and are easily accessible for the departmental officers for any surprise checks.
In respect of existing licences, their location and other requirements should be reviewed and action should be taken in case it is found wanting in certain requirements. They should be given notices of say 90 days to either shift or give additional provisions that are required from the Department’s point of view:
Please ensure that there are adequate provisions for fire fighting operations;
It may be ensured that the goods deposited in the warehouses are fully insured by the warehouse-keeper against theft, pilferage, fire accidents, other natural calamities, risks against rioting, etc., at least for a value equal to the customs duty by a comprehensive insurance policy and drawn in favour of the Commissioner of Customs.
In respect of goods already warehoused, ensure that this coverage is also being made by the existing warehouse-keepers.
It may be ensured that in respect of new applicants, their record is clean and that the proprietor or any of the directors are not involved in any customs duty evasion or smuggling offences and have not been subject to a penalty or other action under the Customs Law and similarly under the Central Excise Law. Where the applicants have been found to be involved in such offences (other than technical offences), Commissioners may deny licences to such applicants;
In respect of existing warehouse-keepers if their track record has not been found satisfactory or cases have been registered for illegal removal or improper compliance of the rules and regulations, immediate action should be taken to cancel their licences after observing the principles of natural justice. Where duty evasion is found to be more than one lakh either in individual cases or in a series of offences, the cases of such licences should be reviewed for action; In respect of individual consignments to be warehoused, the licences are to give a double duty bond as required under the law. In respect of sensitive goods we may take a cash deposit or bank guarantee equal to 25% of the duty liability (effective duty foregone) for each consignments. However, where a warehouse-keeper wants to have revolving bond with a single bank guarantee for a higher amount, it can be accepted and a suitable credit/debit system for each consignment warehoused/cleared can be operated.
- FOR NON-SENSITIVE GOODS:
The applicant should be solvent and has a record. There is no need to insist on a solvency certificate of Rs. 50 lakhs but should be solvent for Rs. 10 lakhs;
All other provisions regarding, security of the place, location of the place, insurance to be taken indicated in Para 3 above would mutatis mutandis apply to non-sensitive goods. Normally, the double duty bond with surety would be sufficient. However, Commissioners may ask for a bank guarantee where they are not satisfied about the transactions of a particular bonder.
- TRANSIT BOND FOR TRANSFER OR BONDS TO INTERIORS:
Where the imported goods are stored in a private bonded warehouse within the same metropolitan city, the regulations allow it to be sent under escort. In such cases, there is no need for a transfer bond;
Where the goods have to go outside the city, a transfer bond is required to be taken but where a transfer takes place within the territorial jurisdiction of the Commissioner of Customs and is within a reasonable distance say up to 50 kms, he may wave the bank guarantee if he is satisfied with the bona fides of the of the party and the goods are sent under escort;
In respect of sensitive goods, the duty should be secured by a transit bond backed by a bank guarantee or a cash security for 50% of the duty involved. In respect of non-sensitive goods transit bonds would be covered by a bank guarantee or a cash security for 25% of duty revolved. The Commissioners may demand bank guarantee/security up to the value of duty amount, if they consider it necessary in certain cases.
Circular No. 1/96-Cus., dated 1-1-1996
– There is no pre-condition of obtaining a “no objection” from the Public Bonded Warehouse for considering the applications for licencing private Bonded Warehouse. Therefore, the applications for private bonded warehouse licences may be decided on merits without considering the aspect of availability of space in the Public Bonded Warehouse. Please inform the field formations accordingly under your jurisdiction.
Circular No. 20/96-Cus., dated 4-4-1996
Subject: Licence to sensitive and non-sensitive items – Regarding.
– The Commissioners should themselves decide as to what is sensitive and what is not, after taking into consideration the nature of the commodity, the rates of duties and the licensing aspects involved.
SOURCE: Govt. OF INDIA, Ministry of Finance
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