Using Bonded Customs Warehouses Within India

PeopleSoft enables you to define and use bonded customs warehouses in India to import non-exempt items. Using a bonded warehouse, Indian customs duties are not payable when goods are deposited into the bonded warehouse located in India. Customs duties are paid when the items are removed (de-bonded) from the bonded warehouse. Bonded warehouses are used when you do not need to take immediate delivery in India of the non-exempt, imported items. Your premises are considered a bonded warehouse when you are registered under one of the following Indian benefit schemes:

  • Export Oriented Unit (EOU)

  • Export Processing Zone (EPZ)

  • Software Technology Park (STPI)

  • Electronic Hardware Technology Park (EHTP)

In order to have the non-exempt items bonded, you must register a bond with Indian customs authorities by paying an amount equal to twice the assessable value of the items. This can be done by a bank guarantee. When the goods have cleared the bonded warehouse, then the bond is canceled.

To use a bonded warehouse process:

  1. Create and dispatch a purchase order with a tax transaction type of DIMP (direct import).

  2. When the imported items arrive at customs, create a bill of entry with the BOE type of Warehousing.

    Set the BOE status to Ready and print the BOE worksheet. The setup for the warehousing BOE is the same as for a home consumption BOE. Submit this warehousing BOE to customs authorities along with the original shipping documents.

  3. Customs authorities review the warehousing BOE against the imported items, making corrections and identifying items exempt from customs duties.

  4. Update the warehousing BOE with the information from the customs authorities.

    The system then recalculates the customs duties. Change the status of the BOE to Assessed.

  5. Receive the imported items using PeopleSoft Purchasing.

    You must associate each receipt lines with an assessed BOE line.

  6. Use the putaway processes in PeopleSoft Inventory to place the imported items into a warehouse.

    Put away the exempt items into a standard PeopleSoft Inventory business unit (warehouse). Put away the non-exempt items into a bonded warehouse defined as a separate PeopleSoft Inventory business unit. When you place goods in a bonded warehouse, they are considered to be the property (the importer) and are booked into PeopleSoft Inventory.

  7. Once you are ready to move the non-exempt items from the bonded warehouse, create a third-party voucher and pay the customs authorities using PeopleSoft Payables.

  8. Update the BOE (with the BOE type of Warehousing) to a status of Closed.

  9. Reopen the third-party voucher and enter the receipt ID associated with each voucher line.

    This enables the system to calculate and apply any variance between the estimated and actual non-recoverable customs duties. This variance is applied to the item in PeopleSoft Inventory.

  10. Create a new BOE, using the BOE type of Ex-Bond, to de-bond the imported items.

    An ex-bond BOE is built on a closed warehousing BOE. When you add an ex-bond BOE, you must select a warehousing BOE reference from a list of closed warehousing BOEs that have not been previously used to fulfill other ex-bond BOEs. Information from the warehousing BOE provides the default values for the new ex-bond BOE. All other setup for the ex-bond BOE is the same as for a home consumption BOE. Print the ex-bond BOE and submit it to the customs authorities.

  11. Using PeopleSoft Inventory, create an interunit transfer to move the bonded items from the bonded warehouse to a standard warehouse.

    At the point of debonding, the exchange rate for determining the assessable value could be different from the exchange rate while bonding. When performing the interunit transfer from the bonded location to the factory premises, you might need to change the inventory value due to the impact of exchange rate fluctuation on customs duties. Receive the interunit transfer into the destination business unit.

  12. Close the ex-bond BOE.

  13. Create an internal supplier excise invoice based on the ex-bond BOE.

    If the importer takes delivery of the items from the bonded warehouse in batches, then the customs duty credit is allowed only upon clearance of the last consignment covered by the BOE for warehousing.

  14. Run the Register Update process to update the Indian tax registers and create accounting entries for customs duties.

    Only internal supplier excise invoices with a transaction type of BOE are picked up by this process to create customs duties entries.