Dated 24th September, 2020
The Customs Act, 1962, provides that owner of any warehoused goods may carry on any manufacturing process or other operations in the warehouse in relation to such goods.1 Earlier, rules were issued for operations in a private warehouse specifying detailed procedures along with duty implications on import/domestic procurement of goods in a private warehouse and export/domestic clearance therefrom.2 However such rules were silent about public and special warehouses, though the provision talks about operations in “warehouse”3 which includes public, private and special warehouse.
Recently, on 17.08.20204 the CBIC has notified Manufacture and Other Operations in Special Warehouse Regulations, 2020 for warehouses licensed as a special warehouse which is detailed hereunder and is issued on similar grounds as issued earlier for private warehouses.
Post verification of application, specified officer will grant permission to operate under this regulation in compliance of such other conditions. Such permission shall be valid until it is cancelled/ surrendered, or the license is cancelled/ surrendered.4
A signage that prominently indicates that the site or building is customs bonded warehouse, a computerized system for accounting of receipts, operations and removal of the goods, storage and such facilities, equipment and personnel as are sufficient to control access to the warehouse and provide secure storage of the goods shall also be provided by the licensee. No person shall be allowed to enter the strong room or deposit goods therein or remove goods there from, except in the presence of bond officer who shall cause the strong room to be locked. Also only the dutiable specified goods shall be stored in the strong room.
The following persons are required to affix one-time lock:-
The licensee shall produce the following:-
If licensee fails to produce such acknowledgements then full amount of duty chargeable n account of such goods along with interest and penalty shall be payable.
The proper officer may conduct audit of a unit operating under section 65 of the Act in accordance with provisions of the act and rules and regulations made there under.
This initiative is aimed at attracting investments in India for manufacturing sector and also to support Make in India initiative of the Government of India. This initiative may also help in improving capacity utilization as there is no restriction on quantum of clearance that needs to be exported or cleared in domestic market.
Further, the process for approval and provision of single digital account for seeking grant of license as a special warehouse and permission to carryout manufacturing and other process in a single form may also facilitate ease of doing business and compliances.
1Section 65 of the Customs Act,1962.
2Notification No. 69/2019- Customs (NT) and Circular No. 34/2020- Customs dated 01.10.2019.
3Section 2(43) of the Customs Act,1962.
4Notification No. 75/2020- Customs (NT) and Circular No. 36/2020- Customs dated 17.08.2020.
5Section 58A of the Customs Act,1962.
BT Associates is a premier indirect tax consultant in kolkata, delivering high quality services to client in the area of indirect taxation.GST idea is a unit of BT Associates formed to share knowledge on stakeholders. We cover entire gamut from technical papers to recent development including IT under GST
BT Associates is a premier indirect tax consultant in kolkata, delivering high quality services to client in the area of indirect taxation.GST idea is a unit of BT Associates formed to share knowledge on stakeholders. We cover entire gamut from technical papers to recent development including IT under GST
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