Hi Experts,
We have one customer in the SEZ (Special Economic Zone) who is releasing the order to us in small Quantities. The order goods we need to procure from Outside India.
We want to import the Goods and store them in a Public Bonded warehouse (under Section 57 of the Customs Act in bulk (since we are storing the Goods in a Public Bonded warehouse, then no need to pay the duty and taxes).
Once our SEZ customer places the PO with us for a small Quantity, we will then sell it from the Public Bonded warehouse to the SEZ. Since SEZ is a special zone, there will be no duty and IGST on the transaction of PBW to SEZ.
Please provide feedback, is this transaction duty and IGST free and what is the procedure involved in terms of documentation.
Thanks
Business can import goods to Public Bonded Warehouse under Section 57 then supply duty-free to SEZ customer A business seeks to import goods in bulk and store them in a Public Bonded Warehouse under Section 57 of the Customs Act, then supply smaller quantities to a Special Economic Zone customer. An expert confirms this transaction structure is legally valid and duty-free. Import into the warehouse requires no duty payment until clearance, while supply to the SEZ qualifies as zero-rated under Section 69 and IGST provisions. Required procedures include filing appropriate bills of entry, executing warehouse bonds, obtaining SEZ endorsements, and maintaining GST compliance through proper invoicing and reporting. The arrangement avoids customs duty and IGST at all stages with proper documentation. (AI Summary)
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