STP Units - extension of re-warehousing period of Bonded capital goods - DGEP Reiterates 2005 Circular
STP units have brought to the notice of Board that the process of renewal/extension of the Private Bonded Warehouse License and the extension of warehousing period for the bonded capital goods are not coterminous and are handled by different authorities, thereby creating difficulties for them.
The same issue was raised 11 years ago when Board in a clarificatory Circular No. 7/2005-Cus, dated 14.2.2005 observed,
I am directed to draw your attention to sub-section 1(a) of section 61 of the Customs Act, 1962, wherein it has been provided that capital goods intended for use in the EOU can be kept in the warehouse for a period of 5 years. Extension of such warehousing period may be given by the Commissioner of Customs under proviso (i) to sub-section 1(b) of above section. It has been brought to the notice of the Board that EOU/EHTP/STP units have to approach every now and then for getting extension of warehousing period. This keeps the units always under pressure of keeping track of warehousing periods. This practice also distract the attention of the units from export production apart from being a major irritant.
2. The matter has been considered by the Board. The EOUs import capital goods frequently especially in the software development sector to keep pace with the development of technology. The units are required to be always in its toes to apply for extension of warehousing period within the time frame provided in the law. There is no denying that this practice does distract the units attention from export production and the units are always busy in preparation of obtaining timely extension of warehousing to avoid action under law for delay.
3. As you are aware that the EOU/EHTP/STP units are required to obtain private bonded warehousing licence u/s 58 of the Customs Act. The said licence is valid for a period of 5 years and the units are required to apply for renewal after every 5 years. The Board in order to obviate the difficulties of the EOU/EHTP/STP units has decided to allow extension of warehousing of all the capital goods installed or put into use, simultaneously at the time of renewal of warehousing licences irrespective of the fact that the capital goods are due for extension or not. The period of extension would be allowed for such a period so that the capital goods need further extension only on the date of renewal of warehousing license. The period of extension, therefore may be adjusted accordingly for every piece of capital goods. However the maximum period of extension at a time would not be allowed for a period for more than five years.
Now the Board wants Chief Commissioners to give wide publicity to the Circular so that STP/EOU/EHTP units can avail benefit thereof.