Business Recorder
The Federal Board of Revenue (FBR) has analysed international customs bonded warehousing systems in India, Canada, China, Japan, Turkey, Morocco, the US, New Zealand, Australia and Singapore to improve the system in Pakistan. Sources told Business Recorder on Wednesday that FBR’s Directorate of Training and Research (Customs) examined best international practices in the bonded warehouses systems operating in various countries.
In this regard, the directorate examined relevant customs laws, comparing warehousing procedures in various different countries with Pakistan. Canada: Most goods waiting to be exported or for in house release can be stored in these warehouse for up to four years, although certain goods can be stored for up to 15 years. The warehouses defer total duties and taxes payable until the goods are either consumed domestically, exported, or the time limits noted above have expired. The bonders must keep records on goods for six years after the goods are removed from the warehouse. China: Bonded goods mean goods that have entered China with import duty formalities postponed upon special permission by the Custom or goods that will be reshipped out of China after being kept for a certain period of time, The special warehouses for keeping bonded goods examined and approved by the Customs are called bonded warehouses. Bonded warehouses cannot be set up in places where there in no Customs house. India: Any goods deposited in a warehouse may be stored upto a period of one year. In the case of Export Oriented Units(EOU), the imported capital goods may be warehoused for a period of five years, for the other goods the warehousing period is one year. In the case of goods likely to deteriorate, the period may be reduced to less than one year. The Commissioner of Customs is to decide whether a commodity is sensitive or not for purpose of warehousing. Whereas the initial warehousing period of five years and one year, as the case may be, is specified it may be necessary to keep the imported goods in the warehouse for a longer period. For instance, an EOU whose export obligation is fixed for ten-year period would require the capital goods for a period longer than the initial period of five years. Under Section 58 of the Indian Customs Act 1962, at any warehousing station, the Assistant Commissioner of Customs or Deputy Commissioner of Customs may license private warehouses wherein dutiable goods imported by or on behalf of the licensee, or any other imported goods in respect of which facilities for deposit in a public warehouse are not available, may be deposited. Japan: If goods are stored in a bonded warehouse or a comprehensive customs bond region, the payment of customs duty and consumption tax can be delayed for up to two years. These facilities are termed Hozei System and can also be extended more than 2 years by special permission. Also, bonded warehouses perform storage functions only, whereas a comprehensive customs bond region provides storage, processing, and display functions. In other words, it is possible to store, process, and display goods in a single building while they remain under customs bond status. Lithuania: In customs bonded warehouse, goods can be stored with no duty and other taxes imposed and without prohibitions and restraints. The following procedures are done in the warehouses: safe storage of goods, repacking, preparing, distribution and sale; and newly acquired modern handling equipment and cargo stocktaking system is connected to a custom checking program, this eliminates the possibility of mistakes. Morocco: Public bonded warehouses; private bonded warehouse that may be either ordinary or special. The maximum time allowable to store goods in bonded warehouse is 3 years for public warehouses and 2 years for private warehouses. United States: Bonded warehouses are authorised by US Customs for storage or manufacturing of goods on which payment of duties is deferred until the goods are removed into Customs Territory. These goods are not subject to duties if reshipped to foreign points. The Philippines: In the Philippines, there had been many detections of misuse of warehousing facility. As a result, the department had resorted to shutting down of many bonded warehouses and subjecting those recently accredited to tighter regulations. Bureau of Customs had ordered bonded facilities to be industry-specific to regulate their operations. The bureau had also been conducting an inventory of the surety bonds that were due and demandable so it could press for collection. In total, the government had closed almost 1,000 customs bonded warehoused to plug revenue leaks and stamp out smuggling. The department noted that the system of having bonded warehouses was created for a specific purpose, which was to help exporters, but had been abused through the year. Some warehouses were used to smuggle in goods and evade tariffs and taxes. The Bureau of Customs had the power to hold the release of cargo and future shipments of the importer to cover the account. New Zealand: Warehousing is practised and the normal time period in one year. There is also a scheme for Custom approved areas for storing export known as “CASES”. Australia: Australian Customs also has the practice of warehousing licensing. Each license issued is subject to the part remaining in force till June 30 next but may be renewed after that. Singapore Customs: The bonded warehouse scheme is a joint scheme under the customs and Inland Revenue Scheme to help the exporter reduce the goods & services tax (CST) on his input used for exports. Turkey: Turkish Customs also helps the exports as an identical system of warehousing but do not have any time limit for goods which may remain under warehouses procedure. However Customs administrative may set a time limit for a certain type of goods, report added.
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