Public Bonded Warehouse (PBW) Under Section 57 of Custom Act to SEZ (Special Economic zone) transaction

[Danish Azfar]

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

AI Summary

Public Bonded Warehouse to SEZ transfers: zero-rated and exempt from customs duty and IGST if procedural compliances met.
Goods imported into a Public Bonded Warehouse under Section 57 are not assessed for customs duty or IGST at import; clearance from PBW directly to an SEZ is treated as a zero-rated supply with no customs duty or IGST payable, provided authorized SEZ use and prescribed procedures are followed, including filing a warehousing Bill of Entry, executing a warehouse bond, filing an ex-bond Bill of Entry for clearance to SEZ, obtaining SEZ customs endorsement, issuing invoices under a Letter of Undertaking, and reporting in GST returns.