E1 Brochure on Customs Bonds

E1 Brochure on Customs Bonds

“A scheme for manufacturing and other operations in a Customs Bonded Facility to Promote India as a Global Manufacturing Hub”.

Overview

India allows duty-free import of raw materials and capital goods for manufacturing and other operations in a bonded manufacturing facility.

Private Bonded Facility

• Basic Customs Duty (BCD) + IGST Deferred (without interest) on imported raw materials and capital goods
• BCD & IGST waived off on export of finished goods from the facility
• Input Tax Credit (ITC) can be availed on domestically procured goods
• BCD & GST on imported raw materials & capital goods & GST on finished goods to be paid domestic clearance of finished goods.

1. Deferment of import duty on imported capital goods and raw materials.
2. Exemption of the deferred duty if these imported inputs are utilized for exports purpose.
3. Duty payable only when the finished/ capital goods are cleared to the domestic market.
4. When finished goods are exported, in addition to the waiver of BCD + IGST on the imported (and duty deferred) goods used, the GST on the finished goods can be zero-rated. Any input GST can be taken as a credit against output GST.

Advantages

• Deferment of duty on imported raw material and capital goods
• Seamless warehouse to warehouse transfers
• No fixed export obligations
• No physical control
• Commissioner of Customs as the Single point of approval
• Single, unified application form
• Unlimited warehousing period
• No Geographical restrictions
• Exemptions of deferred duty of export
• Simplified digital records keeping 
• Simplified format of monthly return 
• No time limit for export/home consumption

How to Apply

Application: (online/offline)

• Nature of operation
• particulars of imported items
• Anticipated trade volume

Execute A Bond

• Submit a physical copy of the bond as per standard format.

Grant of Sanction

• Avail sanction from the Commissioner of Customs
• The sanction may include conditions regarding operations

Start Operations

• Begin manufacturing/other operations

Keeping Records

• Simplified formats for digital record keeping.

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