The Central Board of Indirect Taxes (CBIC) on Monday issued the procedure to be followed in cases of manufacturing or other operations undertaken in special warehouses under section 65 of the Customs Act.
The Board has recently issued the Manufacture and Other Operations in Special Warehouse Regulations, 2020 (MOOSWR) which allows the manufacturing and other operations in a special warehouse licensed under section 58A of the Customs Act, 1962, with regard to warehoused goods specified in clause (1) of Notification No. 66/2016-Customs (N.T) dated 14th May 2020.
MOOSWR, 2020 and this Circular elaborating on the procedures and documentation for a section 58A warehouse, operating under Section 65 of the Act, in a comprehensive manner including the application for seeking permission under section 65, provision of execution of the bond and security by the licensee, receipt, storage and removal of goods, maintenance of accounts, the conduct of the audit, etc.
The Board with the objective of uniformity, ease of doing business and exercising due diligence in grant of permission under section 65, said that the form of application to be filed by an applicant before the jurisdictional Principal Commissioner / Commissioner of Customs.
Further, the Board decided that the licensees manufacturing or carrying out other operations in a bonded warehouse shall be required to maintain records as per the form prescribed under this circular.
“To the extent that the resultant product manufactured or worked upon in a bonded warehouse is exported, the licensee shall have to file 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,” the circular said.
The Board directed that the proper officer should ensure that the goods so cleared are the result of manufacturing or other operations. In case the licensee is unable to carry out any manufacturing or other operations on warehoused goods, then the goods may be cleared as such, either for home consumption after the payment of applicable import duties along with the interest accrued upon such goods in terms of Section 61 (2) of the Customs Act, 1962 or may be exported. In such case the provisions of clause (b) of Section 61(1) shall not be applicable.
“The Principal Commissioner / Commissioner shall evaluate the projected requirement and also consider the distance of the warehouse from the customs office to determine which of the modes of recovery of costs needs to be applied and the amount to be paid by the licensee,” the Board in the circular said.
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