- By Sudhansu Sahu
- May 11, 2021
What is Bonded Warehouse?
Bonded warehouse is a licensed warehouse to keep your inventory under custom authority at importer country before delivery to the buyer. It is basically a bond or agreement between the importer and warehouse when the product enter to the warehouse. This is also called custom bonded warehouse. This bonded warehouse is a duty-free zone because you don’t have to pay duty when the product is stored in the bonded warehouse. If the business spread over overseas countries exporter prefer for bonded warehouse.
These warehouses can government or can be private licensed by Government.
Bonded item can be stored till the custom duty is paid. These items are kept for a specific time period only. If the importer unable to pay, then the items can be seized by the authority or disposed.
The item kept in bonded warehouse are well taken care of and documented and safe and secure storage under custom laws.
Following are the benefits which encourage exporters to prefer bonded warehouse.
- Safe and secure storage of the product. They have all kind of storage facility bulk storage, deep freezers, dry container for various types of shipments.
- Business can save 25% to 30% of taxes. Duty and taxes can be paid when the products are sold. IF the products are unsold and sent back then the taxes need not to be paid.
- Restricted product can be safely stored here until all the legal works are completed.
- Since there is a bond between the importer and the warehouse custom authorities will provide a bond which ensure the financial loss at the time of delivery of product.
- Goods can be withdrawn partially form the warehouse
Type of bonded warehouse
Public warehouses - Public Bonded Warehouses are customs bonded warehouses operated by the government agencies and available to anyone who wants to store their goods Public Bonded Warehouse. It can be importer or the buyer.
Private warehouses - Private bonded warehouse are the custom bonded warehouse solely used by authorized persons for storage of specific goods for their own use. Here only the warehouse keeper can preserve their product. Here warehouse keeper can store the product on behalf of others.
Special warehouses - This type of warehouse is for the storage of hazardous goods, goods that could affect the quality of other goods, or goods that require special storage facilities.
Storage time-period in bonded warehouse.
Any product submitted in bonded warehouse may be stored upto one year and can be extended up to 5 years.
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