Customs Changes - Post Finance Act 2016
SEVERAL changes have been proposed in the Finance Bill 2016 relating to warehousing provisions. They have all come into force with effect from 14.05.2016, when the Bill received the assent of the President.
The amendments:
S. | Amendment |
|---|---|
1. | Subsection (43) of Section 2 is amended to add a new class of warehouses for enabling storage of specific goods under physical control of the department, as control over the other types of warehouses would be only record based. |
2. | Subsection (45) of Section 2 which defines "warehousing station" is omitted. |
3. | Chapter heading of Chapter III is amended to omit the word "warehousing station". |
4. | Section 9 (Power to declare places to be Warehousing stations) is omitted. |
5. | Sections 57 and 58 are substituted to provide for licensing by the Principal Commissioner or Commissioner, in place of Deputy/Assistant Commissioner, subject to such conditions as may be prescribed. |
6. | New section 58A is inserted to provide for a new class of warehouses which require continued physical control and will be licensed for storing goods, as may be specified. |
7. | New section 58B is inserted so as to regulate the process of cancellation of licences which is a necessary concomitant of licensing. |
8. | The existing section 59 governing warehousing bonds submitted by importers availing duty deferred warehousing is substituted so as to fix the bond amount at thrice the duty involved and to furnish security as prescribed. |
9. | The existing section 60 is substituted for Permission for removal of goods for deposit in warehouse. |
10. | The existing section 61 is substituted to extend the period of warehousing to all goods used by Export Oriented Undertakings, Units under Electronic Hardware Technology Parks, Software Technology Parks, Ship Building Yards and other units manufacturing under bond; empower Principal Commissioners and Commissioners to extend the warehousing period upto one year at a time. |
11. | Section 62 relating to physical control over warehoused goods is omitted since the conditions for licensing different categories of warehouses and exercising control over the same are now provided under sections 57, 58 and 58A. |
12. | Section 63 relating to payment of rent and warehouse charges is omitted in view of the privatization of services, and free market determination of rates, including those by facilities in the public sector. |
13. | The existing section 64 relating to owner's rights to deal with warehoused goods is substituted so as to rationalize the facilities and rights extended under the section. |
14. | Section 65 is amended to delete the payment of fees to Customs for supervision of manufacturing facilities under Bond; and empower Principal Commissioner or Commissioner of Customs to licence such facilities. |
15. | Section 68 is amended to omit rent and other charges on account of omission of section 63. |
16. | Section 69 is amended to omit rent and other charges on account of omission of section 63. |
17. | Section 71 is amended so as to substitute the word "exportation" with the word "export" to align with definition contained in sub section (18) of section 2. |
18. | Section 72 is amended to delete clause (c) regarding improper removal of samples |
19. | Section 73 is amended to provide for cancellation bond in case of transfer of ownership of the goods, and is thus aligned with sub-section (5) of section 59. |
20. | New section 73A is inserted so as to provide for custody of warehoused goods and responsibilities including the liabilities of warehouse keepers. |
Notifications and Circulars: Consequent to the above changes, Government has issued the following notifications on 14.5.2016:
Sl. No. | Notification No. dated 14.05.2016 | Details |
|---|---|---|
1 | As per the new Section 58A, (1) The Principal Commissioner of Customs or Commissioner of Customs may, subject to such conditions as may be prescribed, license a special warehouse wherein dutiable goods may be deposited and such warehouse shall be caused to be locked by the proper officer and no person shall enter the warehouse or remove any goods there from without the permission of the proper officer. (2) The Board may, by notification in the Official Gazette, specify the class of goods which shall be deposited in the special warehouse licensed under sub-section (1). The Board has specified the following class of goods which shall be deposited in a special warehouse licenced under sub-section (1): (1) gold, silver, other precious metals and semi-precious metals and articles thereof; (2) goods warehoused for the purpose of -
| |
2 | The Warehoused Goods (Removal) Regulations, 2016 , notified | |
3 | The Warehouse (Custody and Handling of Goods) Regulations, 2016 , notified | |
4. | The Special Warehouse (Custody and Handling of Goods) Regulations, 2016 , notified. | |
5. | The Public Warehouse Licensing Regulations, 2016 , notified | |
6. | The Private Warehouse Licensing Regulations, 2016 , notified | |
7. | The Special Warehouse Licensing Regulations, 2016 , notified |
And the following Circulars:
1. Circular No., Dated: May 14 2016: The Warehouse (Custody & Handling of Goods) Regulations, 2016 and the Special Warehouse (Custody & Handling of Goods) Regulations, 2016 have been notified under notification no. 68 /16-Cus (NT) dated 14th May 2016 and no.69 / 16-Cus (NT) dated 14th May 2016 respectively.
The regulations prescribe the procedure to be followed by the licensee or bond officer, as the case may be, to permit deposit of the goods into a warehouse. The regulations require that goods arriving at the warehouse from a customs station shall be affixed with a one-time-lock (bottle seal) with its serial number endorsed upon the bill of entry for warehousing and the transport document.
The OTL number along with the date / time of its affixation should be invariably endorsed on the bill of entry and the transport document. All customs stations are required to maintain records incorporating the number of the OTL, bill of entry, truck number, container number (if applicable), date & time of affixing the OTL and the name, designation & telephone number of the officer affixing the OTL.
A similar procedure has been provided under the Warehoused Good (Removal)Regulations, 2016, which supersede the earlier Regulations of 1963, for removal of warehoused goods from one warehouse to another and from a warehouse to customs station for export.
The Principal Commissioner of Customs /Commissioner of Customs may permit movement of goods without affixation of such OTLs, where the nature of goods or their manner of transport so warrant (e.g. Liquid Bulk Cargo transported through Pipe Lines and Over Dimensional Cargo).
The Board desires that the Commissionerates should immediately make arrangements for procuring serially numbered one-time-locks.
2. Circular No., Dated: May 14, 2016: Bond required to be filed under section 59: As per the amended section 59 of the Customs Act, an importer is to execute a triple duty bond at the customs station of import with respect to the goods to be cleared for deposit in a warehouse. The bond will remain valid till the warehoused goods are duly cleared for home consumption or for export from the warehouse and will also cover the movement of goods from the customs station of import to the warehouse or from one warehouse to another as well as for the due accounting of goods while stored in a warehouse.
The bonds to be executed have been finalized in consultation with the Ministry of Law & Justice and are published by the CBEC.