PN 51/2016 IN FORCE Procedural & compliance ·? 2016-10-19

Procedure regarding Special Warehouses/Duty Free Shops

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OFFICE Le NEW CUsTomsOF THE HOUSE, COMMISSIONERBALLARD ESTATE, OF Be MUMee anita . : VT F.No, : 5/26-Misc-32/2016-17 A(G) Dated:|9.10.2016iad

Public Notice No.\39/2016

Sub: - Procedure regarding Special Warehouses/Duty Free Shops

Attention of all the Importers, Customs Brokers, Warehouse Licenseej an d the member of the Trade is invited to the Board’s Circular No. 32/2016-Customs dated 13.0.07.2016 on the above mentioned subject.

Reference is also made to Notification No. 66/2016 — Customs (N.T.) dated 14th May 2016, Special Warehouse Licensing Regulations, 2016, Special Warehouse (Custody & Handling of Goods) Regulations, 2016 and Circular no. 20 / 2016 — Customs dated 20th May 2016.
It may be noted that the Special Warehouse (Custody & Handling of Goods) Regulations, 2016 prescribe maintenance of a computerized system for accounting. Accordingly, a system of accounting of receipt, storage, Operations and removal of goods with regard to Duty Free Shops/Special Warehouses is prescribed below:

4. Maintenance of records of warehoused goods only in digital form:

and (a) Every licensee shall maintain electronic records of receipt, handling, storage removal of the warehoused goods based upon data elements contained in Form A appended to this circular. While the data elements contained in the Form are mandatory, the licensee will be free to add or continue with any additional data fields, as per their commercial requirements. It would be necessary for the data to be maintained as per systems of “stock keeping unit” (SKU). goods (b) All licensees are required to enter data accurately and immediately upon the should being deposited in or removed from the warehouse. Such electronic records all be kept updated, accurate, complete and shall be available at the warehouse at times so as to be accessible to the bond officer Or any other authorised Officer, for verification.

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\c) The software fo maintenance of electronic records must incorporate the eature of audit trail which means a secure, computer generated, time-stamped electronic record that allows for reconstruction of the course of events relating to the Creation, modification, or deletion of an electronic record and includes actions at the record or system level, such as, attempts to access the system oF delete or modify a record.

5. Filing of returns in relation to warehoused goods:

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(a)The(i) aRegulations licensee shallalso fileprescribe with thethat,- bond officer a monthly return of thea. ee operations and removal of goods in the warehouse, within ten days afte the(ii) monthwhereto the period which such specifiedreturn relates.in section 61 of the Customs Act, 1962 for—| of goods is expiring in a particular month, the licensee shall furnish such information to the bond officer on or before the 10th day of the month immediately preceding the month in which the period of storage of goods in the warehouse is expiring.

(b) The monthly return, as per para 4 (a) (i), containing transactions undertaken during the month, shall be filed by the licensee in Form A appended to this circular. The Return may be filed as a paper copy or in digital form, as preferred by the licensee (digital form means, such as, in a Pen drive or CD). The Return need not include details of sales to individual international passengers. These can be verified by the bond officer or any authorised officer, from the digital records maintained by the licensee. (c) The monthly return to be filed by the licensee as per para 4 (a) (ii) shall be filed in Form B appended to this circular. The Return shall be filed with the Bond officer as a paper copy. (d) The Duty Free Shop Operator shall also maintain digital records of sales to international passengers as per Form C. The digital file containing these details shall be integrated with the records maintained for the warehoused goods, every 24 hours, and should be available for inspection as a part of the data maintained as per Form A. However, filing of returns would not be required for the record maintained as per Form G

— Acknowledgement of the receipt of goods in the warehouse:

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The Licensee shall follow the procedure contained in Regulation 6 of the Special Warehouse (Custody & Handling of Goods) Regulations 2016. Upon receipt of the goods In a warehouse, the licensee shall, send an acknowledgement of such receipt, duly Signed by the bond officer, as follows:

(i) in case where goods are received from a customs station, to the Assistant/Deputy Commissioner in charge of the Bond section at the Customs stat io n of import; or (ii) in case where the goods are received, from another warehouse, to the p rop er officer of the warehouse from where the goods have been received. vs Facilities: In view of the requirement in the regulations to retain photocopies of documents suc , as bills of entry, transport documents and Form for transfer of goods from a warehouse, ) send acknowledgement of receipt of goods in the warehouse etc., the licensee shall maintain facilities such as computer, photocopier, scanner and printer at the warehouse.

8. Effective Date:

The above requirement of maintaining digital records, in the prescribed Forms, is applicable from the 14th May 2016. Thus, the record of any goods received on or after 14th May 2016 shall be maintained as per the prescribed Forms. It is clarified that data relating to goods already removed from the warehouse by 13th May 2016, are not required to be updated in the digital records. However, the stocks lying for sale in the duty free shops should be entered in the digital records since their duty liability is not extinguished till their sale to international passengers.

Procedure for removal of goods from the warehouse and accounting thereof:

The Board has approved the following procedure for accounting of the goods removed from a warehouse licensed under section 58A of the Customs Act, 1962, without payment of duty:

a. Upon removal of goods from the warehouse licensed under section 58A, the licensee shall immediately record the same in the records;

b. The removal of goods from the warehouse, without payment of duty, is subject to the condition that the goods are removed to the customs area for sale to passengers arriving into or departing from India/ Ship Stores for vessel departing from India. c. The bond officer shall escort the goods from the warehouse to the point of sale (DFS) in the customs area, whereupon, their subsequent sales to Passengers arriving into or

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Sa going abroad from India shall be under the general supervisionj of the customs officers on duty at the passenger terminals/Port,

d. Every duty free5 shop shall record their sales to passengers; by a computerP generated

aInvoice, which shall contain; the name of the passenger, fligight number & passport number. This data shall be stored digitally, in Form C.

e. The records of the warehouse shall be updated every 24 h ours with the data elements contained in Form C. 10. Security and Solvency Requirements:

The Board has dispensed with the requirement: of securityi to be furnishedi undnder section

°9 of the Customs Act, 1962 by a DFS operator ;in respect of hisic |imports (Circuircular No.21/2016- Customs refers). 10.1 As regards requirements of solvency, as provided under clause (b) of regulation 3 of the Special Warehouse Licensing Regulations 2016, the Board has decided that the Licensee shall furnish a solvency certificate of a value equivalent to the amount of duty involved on the 800ds proposed to be stored at any point of time. In this connection, it may be noted that Proviso to the aforesaid clause, waives the requirements of a solvency certificate in respect of the PSU owned duty free shops (for example, ITDC).

Recovery of costs:

Clause (e) of Regulation 3 of the Special Warehouse Regulations 2016 and circular no. 20/2016-Customs dated 20th May 2016 provide that the Licensee of a special warehouse shall undertake to bear costs of customs supervision on Merchant Over Time basis or on Cost Recovery. Now, the Board has approved the following guidelines:

a. The Licensee shall have to indicate the frequency with which the warehouse has to be operated per day / per week and the expected business hours of such operation. b The Principal Commissioner / Commissioner shall evaluate the projected requirement and the distance of the warehouse from the customs Office to determine which of the modes of recovery of costs needs to be applied. c. Illustratively, if the requirement of the licensee warrants the operation of the warehouse ona frequency which is, Say, Once ina week, the cost of supervision shall be

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, he services of the Customs
, ed upon Merchant
charged) on Merchant Over Time basis. Or, in case,tei where t officer are required once a day, cost of supervision could also be based up est customs isi ond officer on
Over Time. However, if the warehouse is at such distance from the near ; better part
office or the nature and duration of work is such, that,; the visit of the P very basis.
every day basis, means his absence from his office for an entire day or p e than
thereof, the licensee shall have to undertake the; services on cost recovery Further, in cases where the licensee requires services of a customs officer for mor once in a day, he shall have to undertake supervision on cost recovery basis. Similarly, ! case where round the clock services are requested, the licensee will have to bear charges on cost recovery basis for a suitable number of officers. Basically, this issue has to be examined on the above lines for deciding the recovery of costs from the licensee. 12. Difficulties, if any, may be brought to the notice of the undersigned. | Gass WS felye
(SUVIR MISRA)
COMMISSIONER OF CUSTOMS (IMPORT)
Copy to: 1. The Chief Commissision er of Customs, Zone-|, NCH, Mumbai: . 2. The Pr. Commissi issioner of Customs (ImportP — | ), NCH, Mumbai
1. The Pr. Commissi issioner of Customs (General
1. The Commissioner of Customs (I mport - =Il), ),ShiaNCH, NCH,Mu MumbaiTERRE‘ 5. The Commissioner; of Customs (Export(Ex = —1 & Il), NCH, Mumbai ; 6. The Addl. Commissiissioner of Customs (Gen & CCO), N issioner of Customs (Import-l), NCHao'
1. The Addl. Commissioner of Customs (Import 9. The Asstt. Commissioner (EDI) for iploaaityErithesate ona enadin ata 10. Correspondence Section , 11. Office copy

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Form A

Form to be maintained by a special warehouse Licencee of the receipt,eipt, storing and removal of warehoused goods. (as per Circular 32/ 2016-Customs dated 13.07.2016)

eipt, handlinB

Warehouse code and address:

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----- Start of picture text ----- | Te rc ee —— asain Other ,na Returns from DFS Balance In warehouse Romarks —_ ea icacaniieacinsiemmaaciionl || codesOwn,te bea | OT| Quamntity |pee Value | Duty| [Date] |Quantity | Valueoe| Duty aQuantity [ Value | Duty | USeg ang | , | wr time | and involve wrt time Transter to | énother Warehouse. | Pex: cualXport | | OS: others | | | 7 | ipsall lie Pf Tt i 3 . Data intained in Form relating to sales to each international passenger shall be -— aa fied. Monthly and kept in digital form only. No paper copies of form tals monthly returns aggregate quantity sold is to be indicated in column 26-31 while fing ----- End of picture text -----

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