Eye on the world market: CBIC pitches in to make Indian exports price competitive, boost manufacturing

By: |
Published: October 15, 2019 8:20:51 PM

Section 65 of the Customs Act of 1962 permits manufacturing activity in a Customs warehouse where imported goods are kept.

CBIC, Customs, Customs Act of 1962, Section 65 of Customs Act, Import Duty, Custom Duty, GSTCBIC has streamlined the process for manufacturing in the bond warehouses.

Customs Act of 1962: Central Board of Indirect Taxes and Customs (CBIC) and the Customs Department have launched a revamped scheme to support Prime Minister Narendra Modi’s flagship scheme – Make in India – to boost manufacturing in the country. Under the revamped scheme, the government has streamlined the existing provisions for manufacturing goods in a custom bonded warehouse. Now importers can import both input material and capital goods and carry out manufacturing activity at the Customs bonded warehouse and the payment of import duty will be deferred. The manufactured goods will be free from payment of any kind of duty or interest if they are exported. It will improve the liquidity of the companies and make Indian export price competitive in the international market, said SK Majumdar, former chairman of Central Board of Excise and Customs (CBEC).

Section 65 of the Customs Act, 1962 allows manufacturing activity in a customs bonded warehouse.

“The unit can import goods (both inputs and capital goods) under a customs duty deferment program. The duties are fully remitted if the processed goods are exported,” said the ministry of finance in a statement.

“There will be no interest liability and units will benefit through improved liquidity,” it added.

ALSO READ: BSNL: How one of the most profitable PSUs lost to private players, reached to the verge of closure

Big boost to manufacturing in Customs warehouses

CBIC has further streamlined the entire process of registration and obtaining approvals to improve the ease of doing business. There will be a single application-cum-approval form and a single digital account. And the concerned Commissioner of Customs will be single point for granting approval and oversee the operations of such units.

And there is no geographical limitation on where such units can be set up.

“This will increase the ease of doing business,” former CBEC Chairman SK Majumdar told Financial Express Online.

ALSO READ: Income Tax department’s unique number comes into force from today; no communication will be valid without it

The scheme would also enable efficient capacity utilization as there is no limit on the quantum of clearances that can be exported or cleared to the domestic market.

“It’s a good scheme. It will improve the ease of doing business and it will definitely bring down the cost of goods and make them price competitive in the export market,” said SK Majumdar.

“It will all depend on how it is implemented, monitored and supervised,” he added.

ALSO READ: Battle of PMs: Modi scores in time management, Manmohan in controlling cost of telecom projects

CBIC has also collaborated with Invest India to launch a dedicated micro-website for providing information and promoting the scheme and for the facilitation of investors.

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Next Stories
1India does not have any trade dispute with US, says Piyush Goyal
2Sitharaman allays investor community fears, says will ensure contracts are honoured
3RCEP negotiators asked to settle issues by October 22