Customs warehousing is the procedure under which imported goods are stored under customs control in a Government or Private Bonded without payment of taxes and under customs control until the goods are entered for home consumption ( and taxes are paid) or until such goods are re-exported or otherwise disposed of – home-consumption, removed to another warehouse, re-exported, re-entered into a free zone among other trans-actions.
This system enables the importer to defer payment of taxes and also offers the advantage of accessing both local and foreign markets without payment of customs duties without any loss of money in respect of duty.
In some instances, the trader is allowed to have products sorted and repacked and any lose thereof in the warehouse may be tolerated by Customs.
Types of Warehouses
1. Government warehouse: Property of government ap-proved by the Minister where goods are kept, lodged and secured.
2. State Warehouse: a place approved by the Commissioner for the deposit of un-entered, unexamined, detained or seized goods are kept for the security thereof and the duties thereon.
3. A Private Bonded Warehouse is any licensed premises that is covered by a premises bond and secured with revenue locks while Government Warehouse, a property of government, is secured with a revenue lock.
Goods in a warehouse may be entered for home consumption, export or re-warehoused.
Advantages of Warehousing:
The procedure meets the axiom of “convenience” in tax payment.
The capital of the trader is not locked up in duty payment until the goods are needed for home consumption
Small traders can hold large stocks of goods under the system
Export trade is fostered by reason of reserve stock and freedom of trade on duty-free basis.
Goods may be exposed for sale and samples drawn.
Remission of duty due to natural losses.
Importer has double security for the goods: customs has interest in goods and warehouse keeper also has interest in rent.
Disadvantages of warehousing:
Extra cost: Cost of revenue supervision is extra cost to the state.
Deferment of revenue payment represents great loss to the state.
Writing off of duty is loss of revenue.
Final consumer bears extra cost.
Trader executes a premises Bond in CB. 6 and Removal Bond in either CB.7 or CB. 8. Processes direct entry into Bonded Warehouse through the GCNet/GCMS with CPC 70X01. CPC 70X01 is employed for manufacturing operations
Processing of Ex-Warehousing for Home consumption via CPC 47D01
For Re-Warehousing CPC 79X93 is employed.
Approval and Licensing
Application in Form C. 66 to be made to the Commissioner through the Assistant Commissioner of the Collection
A plan of the proposed warehouse, showing its relation to other buildings.
Physical inspection of the facility is conducted by Customs after which the reverse of the application form is completed.
A license fee of $2,000.00 must be paid and a license in Form C.24 is issued by the Commissioner.
This license is renewable annually. A license shall be valid for a period of one year from date of issue. The renewal fee is $600.00 annually.
The Warehouse is to be marked with a number allocated on the principal entrance or elsewhere directed by the Commissioner.
Security: This is by bond in Form C.B.
Conditions for appointment:
Customs must be satisfied that goods can be stored in the Ware-house without serious risk of loss due to theft, theft, diversion and other problems.
The specification of the ware-house, therefore are as follows:
The facility should be safe, secure, waterproof and rat-proof.
The facility should be suitable as regards proximity to other buildings
It should be fitted with adequate light and suitable ventilators
It should be fitted with doors capable of being fastened with revenue locks. Where there exists more than one door, only one should be locked from the outside and this should open into a public road. The others should be locked from within.
Doors, when shut should not be capable of being open off the hinges.
Windows should be barred and fitted with shutters.
Bond should be entered into to cover the Premises(premises bond:CB.6) and the removal of goods (removal bond:CB.7 or 8) from the port to the premises.
There are 3 parties to the Bond: The principal, surety and government.
Receipt of goods into a Private Bonded Warehouse
Upon receipt of goods meant for warehousing, the resident officer performs physical examination of the goods and details in the Customs declaration.
When the details are found to correspond, the officer appends his signature to the Certifi-cate of warehousing to signify that the consignment has been duly warehoused.
A second copy of this certificate is dispatched to the Bond to enable discharge of the Bond.
Types of goods excluded from warehousing
Perishable goods, arms, cinders, clay, stone, fireworks, matches, sand, tar just to mention a few.
Duration for Warehousing
The under-mentioned goods may be warehoused in a Bonded Warehouse within the period indicated against them:
Type of Goods : Allowable Period
Perishables : Three (3) Months
General Goods : Twelve (12) Months
Raw Materials : Up to Two (2) years
There will be no option for the re-warehousing of general goods. Perishable goods may, however, be re-warehoused for a limited period of only one (1) month upon application and approval by the Commissioner of Customs.
Traditionally, warehouse control relied heavily on physical controls. Many countries have shifted from this traditional method to documentary and accounts-based systems , thereby improving the efficiency of warehouse operations and reducing the cost of both regulation and compliance.