Enjoy Customs Duties Waiver on Zone-to-Zone Transfer with FTZ in India
Customs duties and taxes are a big pain for merchants involved in international trading for import-export. Whether you import pharma products, cosmetics, food items, apparel, or others, you can easily defer taxes and customs duties with FTWZ in India.
To begin with, let’s understand how the FTWZs or free trade warehousing zones operate? The free trade zone warehouses allow merchants to import items in India without having to pay customs duty upfront by enabling them to store the imported goods minus tariff charges. If required, businesses can clear the entire import or part of the shipment for DTA Sales, and the beauty is duty is only charged on the shipment that moves out for DTA sales. The goods can be even re-exported to another country without inviting import/export surcharges.
In India, free trade zones are located strategically near international ports. If used for importing goods from other countries, these zones provide immediate relief to businesses from the stress of paying customs duties and taxes instantly. On the other hand, if used for exporting goods from India, businesses can enjoy immediate export benefits because goods that enter FTWZs in India from India are considered “exported” and, therefore, merchants get benefited directly from it.
Well, the benefits of using a free trade zone warehouse in India don’t end here! You get to enjoy complete duty exemption on items that you choose to re-export. Since FTWZ in India is treated as a foreign territory (despite being located within the territories of the country), businesses that import raw materials or components into the free trade zones enjoy duty freedom as long as the imported goods do not enter the local market. In case, you choose to export these goods directly from free trade zone warehouse to another country, there is no customs duty to be paid. Isn’t it great?
You would be glad to know that there are no customs duties on products that are transferred from one zone to another. In India, free trade zones can be used for managing transshipping operations and other logistical operations. While a lot of companies focus on using these zones for export, import, consolidation, de-consolidation, distribution hub, etc free trade zones can be used for transferring goods and cross-docking between FTWZs without inviting customs duties. This is especially beneficial for mid-level enterprises that use FTZs for transferring goods within India or outside.
That’s not all. Let me tell you one more great advantage of using free trade zone warehouses in India and it is that you enjoy complete duty elimination on scrap, yield loss, and waste. As a manufacturer that operates in a free trade zone does not pay customs duties and taxes on goods as long as they are inside the FTZ and don’t leave the zone, it pays for the duties on the unfinished goods and raw materials once they’ve been processed. Therefore, duties that you have to pay on imports do not include waste, scrap, and other byproducts of manufacturing. This drastically reduces the amount of taxes and customs duty you have to pay on goods imported into India.
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