Customs inspectors to be removed from warehouses: ''indemnity bonds'' condition being waived

The Federal Board of Revenue has decided to remove customs inspectors from the public, private and bonded warehouses and abolish condition of submitting ''indemnity bonds'' by the owners from 2008-09. Budget makers told Business Recorder on Wednesday that most of the harsh warehousing rules would be abolished in the upcoming budget.
Amendments have been proposed in the Customs Act, 1969 to be incorporated through Finance Bill 2008-2009. It has been decided to introduce the concept of self-assessment at the level of warehouses where involvement of customs officials would be end from the next fiscal. The provision to hand over duplicate key of the warehouse to the customs inspector would be abolished in budget.
The FBR would also abolish the procedure for transportation of goods from port to warehouse under escort from next fiscal. Another major problem of submitting ''indemnity bonds'' by the warehouses owners would also be taken away.
Under the proposed warehousing rules 2008, a committee was formed under the Chairmanship of Shahid Rahim Sheikh, Chief Collector of Customs (North) to simplify the warehousing procedure and make comprehensive and meaningful improvements in the working of bonds (Warehouses).
The new warehousing rules would cover the procedure from initial stage up to clearance, auction and destruction stage. The procedural details are proposed to be deleted from the Customs Act, 1969 and included in the rules or simplification purposes. However, the provisions relating to warehousing surcharge, line, penalties and remission of duty are proposed to he kept in the Customs Act.
These rules would be applicable to private and public bounded warehouses only. The manufacturing bonds and common bonded warehouses have been excluded from the purview of the new rules. The insurance policy is required from "AA" rated insurance companies if face value of the bond is Rs 100 millions or above and from "A" rated companies in case if it is less than Rs 100 millions. This shall exclude small un-reliable insurance companies.
The board has also revised the timing of warehouses. For in-bonding warehouses shall be operative round the clock on 7x24 basis. The importer shall inform Bond Section if they desire to in-bond after 7pm or on holidays. For ex-bonding timing shall he from 9am to 7pm.
The board would make it mandatory for all warehouses to install a computer system. The Pakistan Revenue Automation Limited (Pral), a subsidiary of the FBR, has devised a system for linking of computer to warehouses. Online feeding shall be done by warehouse owners. Inventories shall be maintained by "One Customs" clearance system. In interim period, manual record shall be maintained which shall be done away within due course of time.
The provisions relating to movement of goods from and to bond have been excluded from the Act and included in these Rules. Moreover, the reconciliation of inventory shall be made through computer system. The provisions relating to auction and destruction of goods have been introduced in the new rules.
The destruction procedure (formation of committee) has been laid down. The detail procedure or auction has not been given as separate auction rules are available. However, in these rules a provision has been introduced to accept sealed bid if the bid value corresponds to reserve price of the consignment.
The warehousing period has been mentioned in days instead of months to overcome software problems of Pral. The list of perishable items has been included in these rules and condition for obtaining licence has been mentioned in the new procedure. Previously, these conditions were mentioned in the licence only. One of the major features of the new rule is that the warehousing period for duty free shops has been reduced from two years to 270 days (9 months).
Sources said that the rules have specified requirement of detail verification by assistant collector (from safety and security points of view) prior to issuance of licence. In case the licence of a warehouse is cancelled, the goods owner shall in a certain period transfer the goods to another warehouse or clear for home consumption/export or shall transfer the goods to Common Pool Fund (CPF) or in government custody for auction.
PDC required in these rules for in-bonding shall be accepted which is declared as "good for payment" by the concerned bank. Sources added that the new rules would facilitate working of public and private warehouses through this totally revamped procedure.