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.
- Deferment of import duty on imported capital goods and raw materials.
- Exemption of the deferred duty if these imported inputs are utilized for exports purpose.
- Duty payable only when the finished/ capital goods are cleared to the domestic market.
- 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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