TaxTMI 
TaxTMI 
Procedure to be followed in cases of manufacturing or other operations undertaken in bonded warehouses under section 65 of the Customs Act
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....ons have been received from the trade including potential investors seeking clarifications on some issues. With a view to provide clarity and predictability and to facilitate investments, Board has decided to issue a revised circular along with the Manufacture and Other Operations in Warehouse Regulations 2019 (no. 2 regulations), issued vide Notification No.69/2019-Customs (N.T.) dated 01.10.2019, hereinafter referred to as, "MOOWR, 2019". Circular 38/2018-Customs stands consolidated and integrated into this Circular. 2. MOOWR, 2019 and this circular covers the procedures and documentation for units operating under Section 65 in a comprehensive manner, including application for seeking permission under section 65, provision of execution of the bond by the licensee, receipt, storage and removal of goods, maintenance of accounts, conduct of audit etc. 3. Consequently, the Warehouse (Custody and Handling of Goods) Regulations, 2016, and the Warehoused Goods (Removal) Regulations, 2016, which were hitherto governing the procedure for custody and handling of goods in and removal of goods from public and private bonded warehouses, have been amended vide Notification 70/2019-Custom....
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.... a shipping bill and pay any amounts due. A GST invoice shall also be issued for such removal. In such a case, no duty is required to be paid in respect of the imported goods contained in the resultant product as per the provisions of section 69 of the Act. 8. To the extent that the resultant product (whether emerging out of manufacturing or other operations in the warehouse) is cleared for domestic consumption, such a transaction squarely falls within the ambit of "supply" under Section 7 of the Central Goods and Service Tax Act,2017 (hereinafter referred to as the, "CGST Act"). It would therefore be taxable in terms of section 9 of the CGST Act, 2017 or section 5 of the Integrated Goods and Services Tax Act, 2017 depending upon the supply being intra-state or inter-state. The resultant product will thus be supplied from the warehouse to the domestic tariff area under the cover of GST invoice on the payment of appropriate GST and compensation cess, if any. As regards import duties payable on the imported goods contained in so much of the resultant products are concerned, same shall be paid at the time of supply of the resultant product from the warehouse for which the licensee ....
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....uitable for secure storage of dutiable goods. Regulation 8 of MOOWR 2019 requires the licensee to provide such facilities, equipment and personnel as are sufficient to control access to the warehouse, provide secure storage of the goods and ensure compliance to the regulations. Thus, the regulations do not mandate that a structure fully closed from all sides is a pre-requisite for grant of license. What is important is that the site or building is suitable for secure storage of goods and discharge of compliances, such as proper boundary walls, gate(s) with access control and personnel to safeguard the premises. Moreover, depending on the nature of goods used, the operations conducted and the industry, some units may operate without fully closed structures. Therefore, Principal Commissioner/Commissioners should take into consideration the facilities, equipment and personnel put in place for secure storage of goods, while considering grant of license. 14. The issue of procurement of imported goods that are exempt from duty or are chargeable to nil rate of duty into a warehouse operating under section 65 has also been raised. The objective of section 65 is to enable manufacture and....
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.... of the scheme and facilitation of investors. The same can be accessed at https://www.investindia.gov.in/bonded-manufacturing.The microsite also hosts a digitized application that an applicant can fill online, upload the supporting documents, submit online and also print the application form. 17. Clarification required, if any, may be sought from the Board 18. Hindi version follows. (Temsunaro Jamir) Joint Commissioner (ICD) Annexure- A Application for License for a private bonded warehouse under section 58 and permission for manufacturing and other operations under section 65 of the Customs Act 1962. Part I (to be filled by the applicant) 1. Name of the Applicant: 2. PAN No: 3. GSTIN: 4. IEC: 5. Constitution of business (Tick as applicable and attach copy) (i) Proprietorship (ii) Partnership (iii) Limited Liability Partnership (iv) Registered Public Limited Company (v) Registered Private Limited Company (vi) Registered Trust (vii) Society/Cooperative society (viii) Others (please specify) Note: Copy of certificate of incorporation along with Memorandum of Objects and A....
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....(ix) Please indicate whether the premises have been authorized for commercial use by local Government authorities? 9. Goods proposed to be manufactured or other operations proposed to be carried out (if necessary, additional sheets may be attached). Details of goods: Description of Goods Classification as per Customs Tariff Briefly detail, input- out norms (if applicable) Please attach any supporting publication /document, if available. proposed to be imported proposed to be domestically procured Intermediate product final product details of waste & scrap In case of any change in the nature of operations subsequent to the grant of permission, the same shall be informed to the Jurisdictional Commissioner of Customs within 15 days. 10. SECURITY FACILITIES AT THE PREMISES, EXISTING OR PROPOSED: (i) Burglar Alarm System: (ii) CCTV Facility: a. Is there a CCTV monitoring system installed to cover the surrounding area of the site and storage area? b. Please indicate ....
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....11 of Part -II of the application. Verification to be done by DRI / DGGI. Grant of license may NOT be held up pending verification.] 2. Date of visit to the premises by the bond officer: 3. Findings of the bond officer with respect to security, fire protection, IT enabled inventory management system, type of construction, area available for examination of goods, if required etc. 4. Is the Premises recommended for issue of license as a warehouse along with permission for manufacture or other operations? Signature: Name: Designation: Date: Part IV (For use by Customs Only) 1. Upon the satisfaction of the Commissioner that the licence may be granted, the following shall be obtained from the applicant (Please refer Regulation 4 of Private Warehouse Licensing Regulations, 2016): (i) Insurance Policy. (ii) Undertaking under section 73A. (iii) Indemnity undertaking. (iv) Bond as per Annexure C to this Circular. (v) Details of Warehouse keeper appointed by the Licensee: (a) Name (b) Address (residential) (c) Tele: (office) (d) Tele: (mobile) (e) E-mail id: (vi) Confirmation that digital signature h....
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.... No. 34 35 36 37 38 RESULTANT PRODUCTS (CLEARANCE FOR EXPORT) Resultant products exported Date and time of removal Shipping Bill No. and date GST Invoice No. and date Description of goods Quantity with UQC Assessable Value Export duty Tax paid (if applicable) IGST Comp. cess 39 40 41 42 43 44 45 46 47 Quantity of warehoused goods contained in so much of the resultant products exported Description of goods Quantity with UQC Assessable Value Duty involved BCD IGST Comp. cess 48 49 50 51 52 53 RESULTANT PRODUCTS (CLEARANCE FOR HOME CONSUMPTION) Resultant products cleared for home consumption Date and time of removal GST Invoice No. and date Description of goods Quantity with UQC Value Tax paid GST Comp. cess 54 55 56 57 58 59 60 Warehoused goods contained in so much of the resultant products cleared for home consumption Bill of Entry No. and date Description of goods Quantity with UQC Assessable Value Duty paid BCD IGST Comp. cess....
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....esident" (which expression shall include his successors and assigns) in the sum of Rs. _______(please fill amount in words) to be paid to the President, for which payment well and truly to be made, we bind ourselves, our successors, heirs, executors, administrators and legal representatives firmly by these presents. Sealed with our seal(s) this____ day of _____20 _____. WHEREAS the Principal Commissioner or Commissioner of Customs, has decided to grant license to operate a warehouse under Section 58 of the Customs Act; AND WHEREAS the Principal Commissioner or Commissioner of Customs, has decided to permit carrying out manufacture and other operations in the warehouse under Section 65 of the Customs Act; AND WHEREAS the Assistant/ Deputy Commissioner of Customs has given permission to enter into a General Bond for the purpose of sub-section (2) of Section 59 of the Customs Act, in respect of warehousing of goods to be imported by us during the period from _______to____(both days inclusive). NOW THE CONDITIONS of the above written bond is such that, if we: (1) comply with all the provisions of the Customs Act, 1962, Central Goods and Services Tax Act, 2017 or....