Customs Chapter IX

Licensing of public warehouses

Commissioner-level authority may license a public warehouse, subject to prescribed conditions, for deposit of dutiable goods.

Licensing of private warehouses

A private warehouse may be licensed for dutiable goods imported by or on behalf of the licensee.

Licensing of special warehouses

Special warehouses may be licensed for notified classes of goods; statutory officer-control and access restrictions apply.

Cancellation of licence

Contravention or licence-condition breach may lead to suspension/enquiry and cancellation after reasonable opportunity; existing goods remain subject to Chapter IX controls.

Warehousing bond

Importer executes a bond generally equal to three times assessed duty, undertakes statutory compliance and payment, and furnishes prescribed security; general bonds and transferee bonds are contemplated.

Conditions for warehousing of certain goods

Historical provision omitted with effect from 13 May 1994; retain only for historical concordance.

Permission for removal for deposit

After section 59 compliance, the proper officer may permit removal from customs station for deposit in a warehouse; an electronic order may be generated through risk evaluation.

Warehousing period and interest

Section 65/EOU/EHTP/STP goods have activity-linked periods; other goods ordinarily have one year, extendable one year at a time. For specified other goods, interest generally runs after ninety days until duty payment, subject to statutory exceptions/waiver powers.

Control over warehoused goods

Omitted from 14 May 2016; custody shifted to licensee-responsibility architecture under section 73A and regulations.

Rent and warehouse charges

Omitted from 14 May 2016; commercial charges remain contract/regulation dependent and must not be confused with Customs duty or section 61 interest.

Owner rights in warehouse

Owner may inspect, protect containers, sort and show warehoused goods for sale after warehousing, subject to warehouse controls.

Manufacture and other operations

With Commissioner-level permission and prescribed conditions, manufacturing or other operations may be undertaken in relation to warehoused goods; waste/refuse duty treatment depends on export or domestic clearance.

Excess-rate exemption power

Government may exempt imported materials from whole or part of excess duty where input rate exceeds manufactured-goods rate and industrial-development conditions are met.

Inter-warehouse removal

Consolidated source requires proper-officer permission and prescribed due-arrival conditions. Finance Bill 2026 proposed substitution removing prior-permission wording; final enacted Gazette/India Code chain must be archived before treating that substitution as source-closed current text.

Ex-bond home-consumption clearance

Requires prescribed ex-bond Bill of Entry, payment of duty/interest/fine/penalties and clearance order; electronic risk-based order is recognised. Relinquishment is restricted where an offence appears to have occurred.

Export of warehoused goods

Warehoused goods may be exported without import duty after prescribed export declaration, payment of export duty/fine/penalties where applicable and export-clearance order, subject to notified anti-smuggling restrictions.

Volatile goods allowance

Natural-loss duty remission is available only for notified volatile goods and upon competent-authority satisfaction.

Permitted removal routes

Goods may leave a warehouse only through a route authorised by the Act: home consumption, export, inter-warehouse transfer or another express statutory route.

Improper removal and failure to account

Unauthorised removal, expiry of permitted period or failure to account can trigger immediate demand of full duty, interest, fine and penalties and sale/detention recovery mechanisms.

Bond cancellation and return

Bond is discharged only after all covered goods are cleared, exported, transferred or otherwise accounted for and all amounts due are paid.

Custody and removal responsibilities

Warehoused goods remain in the licensee’s custody until lawful clearance/transfer/export. Contravention of section 71 can make the licensee liable for duty, interest, fine and penalties.