Imported Goods Stored in the Custom Warehouse - A Comprehensive Discussion
The import of goods means bringing goods into India from a place outside India. Sometimes the importer stores the imported goods in the custom warehouse. Warehousing is the process of storing physical goods before they are sold further or distributed. In this article we will discuss why there is a need for warehousing, the types of warehouses, the period for which goods can be stored in the warehouse etc.
Why Importer go for Warehousing:
1. Custom Duty Can be Deferred:
When the goods are not cleared for home consumption and stored in the custom
warehouse the importer is not required to pay the custom duty, in other words
the warehousing allows the importer to defer the payment of customs duties until
goods are moved from the warehouse for domestic use or sale.
2. Transportation Cost Can be deferred:
By storing the goods in the warehouse the transportation costs can also be
deferred. Warehouses help reduce the overall transit time and logistics costs
for goods moving through customs. By storing goods at a customs-approved
warehouse, importers can avoid delays in the customs clearance process.
Requirement of Warehousing bond:
For storing the goods in a warehouse the importer has to file a bill of entry
for warehousing. In addition to the said bill of entry for warehousing the
importer shall execute a bond in a sum equal to thrice the amount of the duty
assessed on such goods, binding himself;
to comply with all the provisions of the Act and the rules and regulations made thereunder in respect of such goods;
to pay, on or before the date specified in the notice of demand, all duties and interest payable and
to pay all penalties and fines incurred for the contravention of the provisions of this Act or the rules or regulations, in respect of such goods.
When the above warehousing bond is executed by the importer the proper officer may make an order permitting removal of the goods from a customs station for deposit in a warehouse.
Period for which goods can be stored in warehouse;
As per section 61 of the Custom Act 1962 the goods deposited in a bonded
warehouse may be stored for a period of one year. The period of warehousing can
be extended by the Principal Commissioner of Customs or Commissioner of Customs
for an additional period of one year.
Consequences if goods are not removed within the Specified Period:
If goods are not cleared from the warehouse within the prescribed time, the
proper officer may demand the full amount of duty chargeable on account of such
goods together with interest, fine and penalties payable in respect of such
goods. If any owner fails to pay the above amount demanded, the proper officer
may seize the goods.
Owner's right to deal with warehoused goods:
The owner of any warehoused goods may, after warehousing the same can;
inspect the goods;
deal with their containers in such manner as may be necessary to prevent loss or deterioration or damage to the goods;
sort the goods; or
show the goods for sale.
Clearance of goods for home consumption:
Any warehoused goods may be cleared from the warehouse for home consumption,
if
a bill of entry for home consumption in respect of such goods has been filed;
the import duty, interest, fine and penalties payable in respect of such goods have been paid and
an order for clearance of such goods for home consumption has been made by the proper officer.
Clearance of warehoused goods for export:
Any warehoused goods may be exported to a place outside India without
payment of import duty if
a shipping bill or a bill of export has been presented in respect of such goods.
the export duty, fine and penalties payable in respect of such goods have been paid and
an order for clearance of such goods for export has been made by the proper officer.
Disclaimer: The information given in this article is solely for purpose of understanding the law. It is completely based on the interpretation of the author and cannot be constituted as a legal advise, the author of this article and Lawcrux team is not responsible for any legal issues if arises on the basis of the interpretation given above.