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WHAT IS FTWZ
FTWZs (Free Trade Warehousing Zones) are Deemed Foreign Territories / Ports / Warehouses for storage and other value-added operations, according to Customs Law. These businesses are allowed to store goods for both international and local customers. The FTWZ law provides for several ownership changes without removing the objects from the zone, ensuring that the trade chain is as short as possible, avoiding a cascade of indirect taxes and compliance, and minimizing transaction costs.
When goods are stored in an FTZ warehouse, they do not have to go through the formal Customs process, and this allows duty payments to be postponed, reduced, or even eliminated in some cases. FTZ warehouses are likewise exempt from the same regulations that apply to bonded warehouses.
Goods can be checked, repaired, and repacked at an FTZ warehouse. This allows a corporation to recall defective products before they hit the market. Customs and Border Protection must first approve these methods.
In an FTZ warehouse, goods can be altered, manufactured, or destroyed, which is only possible in certain types of bonded warehouses. All objects that aren’t restricted are allowed in. Finally, whereas items can indefinitely stay in an FTZ warehouse, bonded warehouses have a five-year restriction.
WHY CHOOSE AN FTWZ
Promotes international and Indian enterprises’ foreign trade and storage activities. Promotes international commerce and storage for both foreign and Indian businesses. It provides an integrated platform for managing procurement, distribution, and trading (in and out of India), cutting operating costs, particularly for those without their infrastructure.
Operates on a freely convertible currency mechanism, i.e., payment of services in FOREX Provides tax benefits such as customs / GST exemptions, interest on duty, licencing, and compliance with related activities (while goods are within the FTWZ)
Activities Allowed In Ftwz:
- Storing
- Handling
- Transportation
- Cutting
- Palletization
- Bagging
- Bubble-wrapping
- Tagging
- Packing
- Labelling
- Crating
- Strapping
- Washing
- Bottling
- Quality assurance
- Consolidation
- Repairs and maintenance
- Cartonisation
- Refurbishment
IN WHAT WAYS CAN COMPANIES OPERATE THROUGH FTWZ
FTWZ may be used in two ways by businesses:
- A company can join the FTWZ as a Trading Unit to engage in trading, warehousing, and other allowed businesses.
- The corporation can employ any logistics services, a Unit in the FTWZ, for trading, warehousing, and other activities known as permitted operations.
CHARACTERISTICS OF FREE TRADE WAREHOUSING ZONE FOR IMPORTERS
- Defer customs duties and taxes payments until the products are removed from the FTWZ, which can take up to five years.
- ‘On wheel clearance’ within 24 hours of the container leaving the port and approval from FTWZ within 2 to 3 hours of duty payment (following seal verification/Custom inspection).
- PLA facility (custom duty deposit with custom) for quick duty payment or immediate duty payment for clearance from FTWZ custom.
- Customs officers are stationed at FTWZ for faster clearance.
- After cargo enters the FTWZ, all associated activities such as ADC clearance, FSSAI, PQ, and AQ are completed (container need not wait in CFS for want for above consent).
- I have a temperature-controlled WH (2 to 8 degrees / 18 to 22 degrees) for storing pharmaceuticals or perishable items.
BENEFITS OF FTWZ
For Imports
- End-to-end distribution flexibility in India.
- Benefits of duty deferment (freeing up working capital).
- Capability for quality check before duty payment.
- Imports through the FTWZ are exempt from SAD, VAT, and CST.
- Re-exports with minimal regulatory and duty effects.
- Buffer stock has been reduced.
- Services provided in the FTWZ are free from GST.
- Product costs were reduced.
- The ability to conduct foreign exchange transactions.
For Exports
- Products from India that enter an FTWZ are presumed exports, giving providers instant benefits.
- All operations undertaken in the FTWZ are free from local taxes (such as CST, sales tax, excise tax, and VAT, now GST).
- Companies exporting into the FTWZ can meet export quotas.
- Reduced reverse logistics and quality control before delivery from India increased efficiency. as.
- Capacity to do foreign exchange transactions.
- Supply chain efficiencies (forward and reverse) are improved, while capital cash flow is improved.
For Re-Exports
- GST exemption for all FTWZ-related operations, including renting and labour.
- Customs and stamp tax exemption on items imported into FTWZ for re-export outside India.
- Simple re-export procedure.
- Permission for 100 per cent FDI for the FTWZ unit holder to build up units.
- Ability to use India’s cost expertise and geographic location as a centre for regional and worldwide distribution after value optimization.
Financial Benefits
- Income tax — Re-export of imported items is exempt.
- Transaction flexibility in any freely convertible currency.
- Customs charges and GST are deferred for longer durations.
- Exemption from the Stamp Duty levied on imported goods.
- Keep all foreign exchange receipts in your foreign currency account.
- Ability to provide value-added services.
- Customs clearance and banking services in-house for quick removal/sale within FTWZ
Cost-free demurrage, detention, and interest.
Operational Benefits
- On-site customs clearance and related services are available 24 hours a day, seven days a week.
- Pick/pack, labelling, testing, and other value-added services.
- Stock availability for Indian Sub-con/South East Asia for overseas consumers.
- There is an eight-lane entry and departure area for customs checks to avoid traffic congestion.
- Operational continuity.
- All FTWZ operations are coordinated through a single point of contact.
Infrastructural Benefits
- 13-meter-high warehouses with G+ 6-palletized racking systems; 8000+ container storage capacity.
- Container and freight yards that are state-of-the-art.
- The internal road network can handle large traffic volumes.
- Large export consolidation hub.
- A central operations control centre with an integrated building management system.
WHY SHOULD YOU CHOOSE GENEX LOGISTICS?
Genex Logistics has established itself as a leading provider of FTWZ services in India. This service is included as part of the package to help facilitate trading and create new business models. With this in mind, we’ve provided a slew of benefits to our clients that import into India or export from India.
Our highly driven experts specialize in managing a trouble-free Free Trade Warehousing Zone. We guarantee on-time delivery, efficient freight forwarding, and high levels of client satisfaction. Contact Us to let our experienced staff handle your supply chain network with fewer customs procedures.