Supply from Customs Bonded Warehouse

[Kaustubh Karandikar]

XYZ(Supplier) had kept the imported goods in to Customs Bonded Warehouse without payment of import duty. These goods were re-exported directly from Customs Bonded Warehouse without filing ex-bond bill of entry and without payment of any customs duty. A simple Commercial Invoice (No Tax Invoice under GST was prepared) was prepared by XYZ along with other export documents such as shipping bill etc. 1) Is the procedure followed correct? 2) In GST Return it has to be shown as Export at Nil duty or under exempted goods?

[Rajagopalan Ranganathan]

Sir,

In respect of imported goods allowed to be lodged in Customs Bonded Warehouse, they are deemed to be in Customs Area. The taxable event occurs when goods cross the customs barrier. Therefore till they cleared from the bonded warehouse on payment of customs duties they are treated as goods lying outside the Indian territory. If you export the goods from the bonded warehouse itself preparation of a simple Commercial Invoice (No Tax Invoice under GST was prepared) along with other export documents such as shipping bill etc. is sufficient.

[YAGAY and SUN]

Section 69 of the Customs Act, 1962 has relevance in this matter.

AI Summary

Customs bonded warehouse treated as customs area-exports from warehouse can proceed with commercial invoice and shipping bill.
Goods lodged in a customs bonded warehouse are treated as within the customs area and remain outside domestic territory until cleared by payment of customs duty; the taxable event occurs when goods cross the customs barrier. If goods are re exported directly from the bonded warehouse, a simple commercial invoice together with export documents such as the shipping bill is sufficient for export formalities, and a Customs Act provision is relevant.