A bonded warehouse, or bond, is a building or other secured area in which dutiable goods may be stored, worked on, or undergo light assembly operations without payment of duty. It may be managed by the state or by private enterprise. In this concept of ‘bonded warehousing’, the importers could store cargo and effect partial releases thereby deferring duty payment to Customs, and at the same time releasing the international (ISO) container in which the cargo is imported.
While the goods are in the bonded warehouse, they may, under supervision of the customs authority, be worked-on in terms of cleaning, sorting, repacking, or otherwise changing their condition by processes that do not amount to manufacturing. After working-on, and within the warehousing period, the goods may be exported to another bond (EOU etc) without the payment of duty, or they may be taken for consumption upon payment of duty at the rate applicable to the goods in their renewed condition at the time of withdrawal.
Bonded warehousing offers triple advantage to the importers. On the one hand, it allows the deferment of duty payment, and at the same time, it allows the release of the shipping container back to yard which otherwise attracts detention charges. It also allows for cargo to be stored under the relatively cheaper option of warehouse storage as opposed to holding on to an ISO container lying at the port for which dollar lease rentals of the container as well as the port / CFS rentals accrue on the importer.
The detailed benefits are as:
- Flexibility to clear cargo in part consignments (unlike in the case in other Container Freight Station (CFS)/ International Container Depot (ICDs) thus allowing flexibility towards consumption/end distribution and availing the benefits of bulk import.
- Duty deferment benefits (freeing up working capital and reduction in costs)
- De-stuffing of cargo from shipping line containers into bonded warehouse avoiding Shipping Line detention charges and port ground rent.
- Quality control prior to duty payment, hence duty to be paid on cleared goods only.
- Value addition services can be provided like labeling, packing, kitting, bar-coding, palletization and other authorized services.
- And all you pay is Per Box per Day or Per Pallet Per Week.
WAREHOUSITY is emerging as the biggest Bonded Warehousing Playerin the country and is bringing the triple advantage to you by offering end-to-end bonded warehousing service. All the warehouses in Warehousity platform are well curated for your requirements, in collaboration with public bonded warehouse operators, (both state and private) and are located across the country including, in close proximity to the ICDs / Airports, offering advantages of lesser cost to importers.
Come explore the unique offerings on comprehensive on-demand warehousing & 3PL services in India!
This article is contributed by Mr Mansingh Jaswal, Director & Chief Executive Officer with Genex Logistics and a mentor to Warehousity, having a professional experience of over 20+ years in Supply Chain, Logistics, Transportation and International Freight and a Research Scholar at Management Development Institute (MDI) in Strategy.