Question

Explain the following term/concept:

Banded Warehouses

Answer 1

Bonded warehouses are licensed by the government to accept imported goods for storage until the payment of customs duty. These warehouses work under the control of customs authorities. The warehouse keeper is required to give an undertaking or ‘Bond’ that it will not allow the goods to be removed without the consent of the customs authorities. The goods are held in bond and cannot be withdrawn without paying the customs duty. If an importer is unable or unwilling to pay customs duty immediately after the arrival of goods, he can store the goods in a bonded warehouse. He can withdraw the goods in installments by paying the customs duty proportionately.