Advantages Of Bonded Warehousing

In simple terms, A Bonded Warehousing can be defined as storage

, manipulation, or further manufacturing of dutiable goods in a building or other secured area without the payment of duty on it. Nowadays almost all developed countries employ this system. There are few things associated with bonded warehousing and the purpose of this article is to explain those important points. It is important to note that when goods entered into a bonded warehouse, the importer and warehouse proprietor acquire liability under a bond. This liability is generally cancelled under certain conditions such as when the goods are

Exported; or deemed exported;

Withdrawn for provisions to a ship or aircraft

Destroyed under Customs supervision; or

Withdrawn for consumption locally after payment of duty.

Earlier to the induction of bonded warehousing concept the payment of duties on imported good had to be made at the time of importation, or a bond for future payment handed to revenue authorities. There were several drawbacks of this old system such as it was difficult for the importer sell the good immediately at low prices in order to raise the duty. The duty on the good had to be paid in a lump sum, increased the price of the goods by the amount of interest on the capital required to pay the duty.

To overcome these issues, the concept of bonded warehousing introduced, however it was not much popular till 1803 but later the system was adopted.

Different businesses can benefit from using a bonded warehouse such as drinks industry, retailers, pharmaceuticals, automotive and 3PL. It is understood that most companies do not sell their goods within four weeks of receiving stock into their warehouse. It means that they will have paid the Duty and VAT up front on their entire stock. With the help of bonded warehousing all of their stock can be referred as Duty Suspended.

Granby a leading marketing company that provides cutting-ede marketing and bonded warehousing services to blue-chip clients, promotional marketing companies and public sector organizations.

by: Avinash Smith

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