What is Bonded Warehouse? What are the functions of Bonded warehouse?

What is a Bonded Warehouse?

A Bonded warehouse is the special warehouse where imported goods that have not yet been paid the import duties and taxes are stored. The goods are treated as the goods which are not arrived in that country yet. These warehouses are usually owned by the dock authorities and are placed near ports.

Only when the products are shipped out for domestic consumption, duties and taxes will other apply. If the products are later shipped for export, then no taxes will apply.

Bonded warehouse can be in Bonded Logistics Park, Free Trade Zone, or they can also be located in a normal industrial park, and obtain bonded status from the government (depends on local customs regulations).

What are the functions of Bonded warehouse?

Bonded warehouse is useful in case of import. Here, you do not have customs duties till you resell or export the imported goods. As a importer you have to file a bill of entry when the imported products arrives.

In simple words, a bonded warehouse is a custom controlled warehouse wherein goods are kept for processing before delivery. Private Companies or governments, both can own these warehouses.


After getting license from the customs authority, a bonded warehouse can be established. The warehouse man acts as a custodian between the customs department and the importer to receive and release the cargo to the extent of duty paid.

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