BONDED MANUFACTURING UNIT

[Vinaykumar Jhawar]

Can a unit setup as Bonded Manufacturing Unit, do jow work activity ?

[KASTURI SETHI]

Is the manufacturing unit EOU ?

[Vinaykumar Jhawar]

SIR IT IS BONDED MANUFACTURING UNIT

[Mahir S]

Vinaykumar ji,

Please study Manufacture and Other Operations in Warehouse (no. 2) Regulations, 2019. Notification 69/2019-Customs (N.T.) dated the 1st October, 2019 and Board Circular No.34/2019 - Customs dated 01.10.2019 and try to locate your answer.

If any issue, then do let us know.

[YAGAY and SUN]

In addition to above reply, you may find following link useful to understand it in a better manner.

https://www.pwc.in/assets/pdfs/trs/indirect-tax/customs-bonded-warehouse.pdf

[KASTURI SETHI]

After in agreement with the replies given by the experts, I further opine that bonded manufacturing unit is allowed to act as bonded warehouse. So in terms of Section 65 (1) of Customs Act, 1962 , the owner of bonded manufacturing unit/bonded warehouse is required to obtain permission from the Principal Commissioner of Customs or Commissioner of Customs to carry out job work activity. In my opinion, job-work activity is covered under the phrase,"Other Operations" mentioned in Section 65 (1) of the Customs Act.

[Vinaykumar Jhawar]

https://www.linkedin.com/pulse/bonded-manufacturing-newly-improvised-scheme-boost-make-divay-pranav

Sir, please go through the article whereby in figure II, they have stated that service operations are not allowed in Bonded Manufacturing Unit.

[Vinaykumar Jhawar]

Dear Mihirji,

I have went through the provisions, but it is not clear whether job work is allowed in the area.

[KASTURI SETHI]

Bonded manufacturing is allowed to work as bonded warehouse. Bonded warehouse can undertake manufacturing activity with permission from the Principal Commissioner or Commissioner Customs. If you take the permission for job work from the competent authority there will be no objection or risk. Also go through para 6.14(b) of FTP. 'Other Operations' can cover it. Any article is opinion of author. It is my views.

[YAGAY and SUN]

Job work related operations are also allowed.

AI Summary

Job work in bonded manufacturing units permitted with customs permission as Other Operations under Section 65(1).
A bonded manufacturing unit may act as a bonded warehouse and undertake job work if it obtains permission from the Principal Commissioner or Commissioner of Customs; job work is regarded as Other Operations under the customs regulatory framework, supported by the Manufacture and Other Operations in Warehouse Regulations, 2019 and related customs notifications and circulars.