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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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..... Notification No. 44/2019-Customs (N.T) dated 19th June, 2019 and Circular 38/2018-Customs dated 18.10.2018 issued to streamline the procedure, documentation and compliances to be followed under Section 65 of the Customs Act, 1962 (hereinafter referred to as the "Act"). 2. Representations 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". .....

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..... g business and exercising due diligence in grant of permission under section 65, the form of application to be tiled by an ' applicant before the jurisdictional Principal Commissioner / Commissioner of Customs is prescribed as in Annexure A. The form of application has been so designed that the process for seeking -grant of license as a private bonded warehouse as well as permission to carry out manufacturing or other operations stands integrated into a single form. The declaration to be made to satisfy regulation 5 of Private Warehouse Licensing regulations 2016 and the undertaking to be made by the applicant as per regulation 4 of MOOWR, 2019 is included in the application format (Part II). The warehouse in which section 65 permission .....

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..... ot;). 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 reflected in the accounts prescribed under Annexure B. .....

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..... o import goods and clear them as such, for home consumption under section 68 on payment of import duties, along with interest as per sub-section (2) of section 61 of the Act or clear them as such for export under section 69 of the Act. The licensees shall also be required to submit monthly returns in "Form B" as prescribed under Circular No. 25/2016-Cus dated 8th June 2016 in case the warehouse is used for such purposes i.e. non-section 65 purposes. This is being allowed to enable optimum utilization of available infrastructure. 13. As per Regulation 3 (2) (e) (i) of the Private Warehouse Licensing Regulations, 2016, the Principal Commissioner or Commissioner has to be satisfied that the site or building of the proposed private wa .....

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..... y. Denial of the facility to exempt goods or those chargeable to nil rate of duty, which may be required for manufacturing, would defeat the objective of Section 65. It is therefore clarified that imported goods, that are exempt from duty or are chargeable to nil rate of duty, may be brought into the warehouse, upon filing a bill of entry for home consumption and clearance, at the customs station of import. Such goods shall not be considered as warehoused goods in terms of section 60 of the Act. 15. Sections 67, 68 and 69 of the Act provides for permission of the proper officer for removal of the goods from one warehouse to another, for home consumption and for export, respectively. Even in cases, the resultant goods are being removed, perm .....

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