applicability of CST on clearance from Foreign Trade Warehousing Zone

[Ramaiah Swamy]

good evening friends,

Foreign Trade and Warehousing Zone ( FTWZ) is like a special economic zone.  Any person or entity can store the goods in the said  FTWZ.  Even foreign entities can store the goods in their name.  The goods can be sold to a local party against applicable customs duty or can be transferred bond to bone. 

In the above background, can I have clarificaiton on the following points please?

1.  Whether the storage of goods in FTWZ will be during the course of import ?

2.  Whether the transfer of goods from FTWZ to a customs bonded warehouse will also be during the course of import ?

3.  Whether the sale  from FTWZ  to a local customer will be a CST chargeable transaction?

Thanks and regards,

Ramaiah swamty

[Sankar Bagchi]

FTWZ is a special category of of Special Economic Zone (SEZ) and is governed by the provisions of SEZ Act and Rules.SEZ is speciafically delineated as Foreign Territory for the purpose of Trade operations and duties and tariffs. For all purposes the goods transfered from DTA to FTWZ is Export similarly goods comming from FTWZ is import.

In context to the above ,my clarification to your querries are as follows :-

1. The goods transfer from DTA to FTWZ for storage is Export.

2. The goods transfered from FTWZ is import in the hands of your customer

3. When the goods are imported by your customer there is no question of CST but your customer has to pay the Customs duty.

 

Thanks and regards,

Sankar Bagchi

 

 

[Nexdigm IDT]

Dear Mr. Sankar,

What would be situation if goods intended to be stored in FTWZ is duty paid goods i.e. I have not availed any duty benefit applicable for the purpose of Export.

Further, if I am storing duty paid goods in FTWZ, whether any duty needs to be paid by the customer in case of direct sale from FTWZ.

Thank You in Advance.

AI Summary

FTWZ treated as foreign territory: transfers carry export/import character and customs duty applies, not CST. FTWZ is treated as foreign territory; transfers from DTA to FTWZ are exports and transfers from FTWZ to DTA are imports in the purchaser's hands. Sales from FTWZ to a local customer have import character and attract customs duty liability; such sales are not chargeable to Central Sales Tax. A subsequent question asks whether previously duty paid goods stored in FTWZ change duty consequences on direct sale, but that issue remains unresolved in the discussion.