The Finance Act, 2016 has introduced a complete overhaul of the customs bonding regime. To operationalise the statutory changes, the Central Government has notified six different regulations all dated 14 May, 2016. The important features are:
- Special Warehouses
- Certain categories of goods only allowed to be stored i.e. (i) precious metals, (ii) goods meant for supply to Duty free shops/Stores for vessels or aircrafts /Foreign Privileged Persons.
- Regulations governing licensing, custody and handling have been notified under (i) Special Warehousing Licensing Regulations, 2016 and (ii) The Special Warehouse (Custody and Handling of Goods) Regulations, 2016.
- Private Warehouse and Public Warehouse
- The Private Warehouse Licensing Regulations, 2016 and the Public Warehouse Licensing Regulations, 2016 notified for licensing which also contain conditions and compliances to be met by the applicant for a private and public warehouse. The conditions and compliances to be fulfilled by a private or public warehouse are substantially similar to that of special warehouses.
- Unlike special warehouses, no physical control over the private or public bonded warehouse by the customs authorities. This reduces interfacing by the warehouse operator with customs authorities and grants more flexibility.
- Existing private and public warehouses licensed under the erstwhile regime are required to compulsorily meet the requirements under these new regulations within a period of three months.
- The Warehouse (Customs and Handling of Goods) Regulations, 2016 have been notified for handling and custody of goods. It provides that the warehouse operator is to intimate custom authorities upon receipt/transfer of goods. Removal of goods from the private/ public warehouse, however can only be done with the prior permission of the custom authorities.
- The warehouse operator is required to maintain records and file monthly returns on receipt/storage/operations and removal with the custom authorities.
- Further to the above, in cases of transfer of goods from one warehouse to another (either special/private/public warehouse) from a warehouse to customs station for export purposes, the provision of the Warehoused Goods (Removal) Regulations, 2016 are also additionally to be complied with.
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