Meaning and Advantages of Bonded Warehouse

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meaning and Advantages of Bonded Warehouse. A warehouse licensed to keep imported goods awaiting clearance because of non-payment of custom duties is called a bonded warehouse. These warehouses are maintained by port trust and custom authorities. These warehouses are situated near the port. The bonded warehouses are used by the importers in the following cases when: * he does not has his own godown, * he may not be able to pay custom duties immediately, * he wants to re-export the imported goods for entrepot trade. The goods on which duty has been paid is kept in duty-paid warehouse for which a warehouse receipt is given. The goods on which duty has not been paid is kept in the bonded warehouse for which dock warrant is issued which serves like a warehouse receipt. Bonded warehouse may be a government warehouse or private warehouse. When goods ware stored, an agreement is entered into by the owner of warehouse and custom authorities where the owner of the warehouse undertakes for safe storing of goods and the payment of import duties. Advantages: The following services are rendered by a bonded warehouse: i. The goods are stored in bonded warehouse without payment of custom duties. The goods are stored till the importer is able to arrange for the payment of import duty. Because of this facility the importer is saved from the payment of heavy duty at a time. ii. Warehouse facilitates the conduct of various operations which make the goods suitable for marketing. the importer is permitted to divide, mix and pack the goods when these are kept in the warehouse. iii. It facilitate re-export of goods without much financial expenditure because the imported goods meant for re-export are kept in the warehouse. iv. The importer can effect sale of goods or transfer the title of goods by endorsing the warehouse receipts. By this it enables to save much on part

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