Introduction:
The concept of warehouse manufacturing available under Customs Act, 1962 is an age-old duty deferment and export benefit scheme useful for both domestic suppliers and exporters. It is less popular among exporters when compared to EOU1, EPCG2 and Advance Authorization schemes under the FTP3. All these schemes allow exporters to import capital goods and inputs to procure domestically without payment of customs duties and IT4. Such duty saved amounts shall stand waived when the specified export obligations are fulfilled. On the contrary when such obligations are not fulfilled within the stipulated time, the duty saved amounts proportionate to unfulfilled export obligation shall be recovered along with interest which is payable from the date of actual import of goods under the above schemes. The option of warehouse manufacturing is also worthy for exporters to consider as it does not impose any condition of export obligation and there will be a remission of duty payable on imported goods if the final goods are exported. If the final goods are cleared for domestic consumption, then the duty payable on original imported goods that was not paid at the time of their import can be paid without interest at the time of such removal. In addition to the condition of export obligation, there are no stipulations about minimum investment, minimum area and is of less administrative burden.
Read more: Insights into In-bond Warehousing & Manufacturing Facility
