Free Trade Warehousing Zones – FTWZ Decoded for You

Before we tell you the reasons why you must choose a free trade warehousing zone (FTWZ) for your business activities, especially if you are into the business of import and export, it makes sense to first understand what the FTWZs is all about. So, here we go!

By definition, FTWZ or free trade warehousing zones are the SEZs (special economic zones) where activities such as trading, warehousing, and all related activities are performed. FTWZ is designated as a foreign territory (located) within India’s territory. The territory is meant basically for trade and tariff purposes.

The legal frameworks of the free trade warehousing zone are SEZ Act, 2005 and SEZ Rules, 2006. The Ministry of Commerce and Industries issues instructions from time to time for the purpose of clarifying different operational aspects of such zones.

Activities that are allowed inside these zones include warehousing/storage of goods for foreign/domestic clients, packaging, repacking, trading with labeling or without it, re-invoicing, re-export, or re-sale of goods, assembly of semi-knockdown and complete goods, kitting, and several other value optimization services on the cargo/goods.

If you own an import and export company and want to know how you can operate through free trade warehouse, you can do it in two ways viz.:

Trading Unit: An import and export company becomes a unit inside the free trade warehousing zone for trading, warehousing, and several other activities known as authorized operations.

Service Unit: A company may avail OSV’s logistics services for offering value-optimized services to their clients.

In a free trade warehousing zone, an import and export company may carry out authorized operations such as trading, packing, warehousing, labelling, shrink wrapping, bottling, clubbing, palletization, strapping, testing, consolidation, kitting, quality checking, combination packing, and others.

An import and export company can enjoy various export benefits on choosing FTWZs and these benefits are available for supplying goods from DTA (Domestic Tariff Area) to free trade warehouse zones for authorized operations. Inbound taxable services and services performed inside these zones for use in operations that are authorized are exempt from service tax. Likewise, taxable services concerning goods’ transportation from port to the free trade warehousing zones or from one such zone to another are also exempt from any taxes or fees or duties.

Inbound taxable services as well as those performed inside the FTWZ for use in authorized operations are exempt from service tax. Similarly, taxable services in relation to transportation of goods from Port to FTWZ or from one FTWZ to another FTWZ would also be exempted. Furthermore, you can save the customs duty on goods that you import directly into these zones for various authorized operations. However, you are liable to pay customs duties only at the time of goods’ clearance into DTA.

OSV FTWZs are the most sought-after among import and export companies due to countless benefits, some of which include: Duty Deferment Higher Confidentiality Tax Deferment Security and Safety Quick delivery 24/7 support Trust and Reputation

To know more visit at Free Trade Port Zone in India

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