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TMI BlogProcedure to be followed in cases of manufacturing or other operations undertaken in bonded warehouses under section 65 of the Customs ActX X X X Extracts X X X X X X X X Extracts X X X X ..... eeking 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-Customs (N.T.) and 71/2019-Customs (N.T.) both dated 01.10.2019 to exclude thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 shall have to file an ex-bond Bill of entry and such transactions shall be duly ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 other operations in customs bonded warehouses. For this purpose, the units should be able to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .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 Article of Association in case of companies and partnership deed in case of partnership firms should be attached. 6. Registered office: Address: Tel: Fax: E-mail: 7. Bank Accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny 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 the no. of cameras installed: c. No. of hours/days of recording accessible at any point of time: (iii) Security Personnel: a. Details of arrangements for round the clock security provided for the warehouse: b. Name & details of firm contracted for security services: c. No. of personnel to be deployed on each shift for round the clock security: (iv) Fire Security: (Please enclose a fire safety audit certificate issued by a qualified independent agency) 11. DECLARATION: I/ We declare that: 1. I/We are a registered or incorporated entity in India. 2. I / We have not been declare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined 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 has been obtained by the warehouse keeper (as per guidance available on ICEGATE website). 2. Licence No. and date of issue: 3. Warehouse Registration Code on ICEGATE (refer Circular 19/2016 dated 20th May 2016): Signature: Name: Designation: Date: Part V (For use by Customs only) (Details of commencement of manufacture or other operations in the Warehouse) 1. Date of verification visit to certify commencement of manufacture or other operations in the Warehouse: 2. Name of the officials who visited the premises: 3. VERIFICATION REPORT: (i) I have verified that the unit has commenced manufacture or other operations. (ii) I have verified that records are being maintained by the licensee as prescribed under Annexure B of Circular 34/2019-Cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 65 66 67 IMPORTED GOODS CLEARED AS SUCH Imported goods cleared as such for home consumption Bill of entry No. and date Description of goods Quantity with UQC Assessable value Duty paid BCD IGST Comp. cess 68 69 70 71 72 73 74 Imported goods exported as such Shipping Bill No. and date Description of goods Quantity with UQC Assessable Value Duty involved BCD IGST Comp. cess 75 76 77 78 79 80 81 TREATMENT OF WASTE OR REFUSE ARISING OUT OF MANUFACTURE OR OTHER OPERATIONS WHERE THE RESULTANT PRODUCT IS EXPORTED Quantity of waste or refuse destroyed Duty paid on waste or refuse Descri-ption of goods Quan-tity with UQC Asse-ssable value Duty involved Des-crip-tion of goods Quan-tity with UQC val-ue Details of Duty paid BCD IGST Comp. cess Chal-lan no. BCD IGST Comp. cess 82 83 84 85 86 87 88 89 90 91 92 93 94 Duty to be remitted on the quantity of warehoused goods contained in so much of the waste or refuse ( destroyed or cleared as such) Description of goods Quantity with UQC Assessable value Duty involved BCD IGST Comp. cess 95 96 97 98 99 100 TREATMENT OF WASTE OR REFUSE ARISING OUT OF MANUFACTURE OR O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r interest, fine and penalties payable under section 72 of the Customs Act, 1962 in respect of such goods; (3) pay all penalties and fines incurred for contravention of the provisions of the Customs Act, 1962, Central Goods and Services Tax Act, 2017 or Integrated Goods and Services Tax Act, 2017 or Goods and Services Tax (Compensation to States) Act, 2017 and the rules or regulations made thereunder, in respect of such goods; Then the above written bond shall be void and of no effect; otherwise the same shall remain in full force and virtue. IT IS HEREBY AGREED AND DECLARED that: (1) the Bond shall continue in full force notwithstanding the transfer of goods to any other premises for job work; (2) the President through the Deputy/Assistant Commissioner of Customs or any other officer may recover any amount due under this Bond in the manner laid down under sub-section (1) of section 142 of Customs Act, 1962, without prejudice to any other mode of recovery. IN THE WITNESS WHEREOF, the importer has herein, set and subscribed his hands and seals the day, month and year first above written. SIGNED AND DELIVERED by or on behalf of the importer at ____(place) in the presence of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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