How and when to cancel Bank guarantee and bond.

 The information provided here is part of Import Export online Training

 

How to cancel Bank Guarantee and bond executed with Customs. When is Bank guarantee cancelled with customs?

 


Cancellation of bank guarantee and bond takes place once after completion of obligation mentioned in bond and bank guarantee.

 

If a bond with BG was executed to avail import duty against export of goods, such Bond with BG is cancelled once after fulfillment of export obligation. After completion of export obligation as per the bond executed, the importer files the necessary proof on fulfilling export obligation. Normally, Export promotion copy of shipping bill, payment realization certificate from Bank, FIRC (Foreign Inward remittance certificate), Bill of Lading or Airway bill etc. are taken as a proof of exports. The authorities may demand, part or full of said documents or any other documents specified by the licensing authorities and customs authorities along with the said documents.

How and when to cancel Bank guarantee and bond copy

The necessary documents to prove the export obligation are filed with customs authorities where in you have executed bank guarantee and bond. The customs authorities verifies the documents and once satisfied with the obligation on bond and bank guarantee, cancel the bond and bank guarantee and make necessary entry in their records on fulfilling the obligation. The cancelled bond and bank guarantee is returned to you after necessary entry in records. You can surrender the said bank guarantee with your bank, where the said bank guarantee had been issued. If any bank guarantee margin amount reserves had been kept by your bank from your account while issuing the said bank guarantee, the said amount will be credited to your account while submitting the canceled bank guarantee.

 

Have you satisfied with the procedures to cancel bank guarantee and bond with customs under import?

 

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Write below your thoughts on cancellation of BG and Bond with customs under bond.

 

  

The above information is a part of Export Import Training course online

 

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Comments


PRABHU: good one!

HARJINDER: Sir we returned cancelled Bank Guarantee and bond from customs office, mumbai due to some technical reasons. we go to bank for surrender the same cancelled bank gurantee. but bank staff reject our request and demand a discharge letter from Beneficiary i.e Customs office. we convey the same to our clearing agency, they said cancelled bank guarantee and a letter about cancellation of bank guarantee and bond are sufficient for the bank. Sir, there our bank staff reject this letter and "Bond Cancelled" stamped Bank Guarantee and force us to provide a discharge letter from Beneficiary. so suggest us how can we satisfied our bankers because they are not ready to under stand this procedure.

Balachandran M: As I was browsing through the NET, I came across your recent presentation titled "How to cancell Bank Guarantee and Bond executed with Customs......... Customs? This presentation is dt. Octr.13,2014. It prompted me to contact you, for a more practical problem which my MNC client facing. My client imported plastic injection moulds [made of tool steel] weiging 1.5 T to 2 T. He uses it in his injection moulding machines, takes out plastic moulded articles. After say a million pieces, the steel mould is dismantled from the injection moulding machine and re-exported back to the origin. How the import of the steel mould is done? Under Customs notification no. 27/2002-Customs, by executing a Bond and BG for 85% of the Duty amount, and paying 15% duty in cash. After the mould is re-exported, and the proof of export submitted to customs, the Bond and Bank Guarantee are cancelled by the Customs. After cacellation, the bond and BG are RETAINED by Customs, who refuse the return them to the importer. From your above presentation, I understand that The cancelled bond and bank guarantee is returned to you after necessary entry in records. You can surrender the said bank guarantee with your bank, where the said bank guarantee had been issued. . But in practice, Customs at Hyderabad refuse to hand over the cancelled Bond and BG to the importers. When we insist of the return of the Bond and BG, the customs officer says that he has no authority and is demanding CBEC instructions or circular stating that the Bond and BG must be returned to the importers. I understand that the customs are adopting divergent practices on this matter. I understand that Raigad Customs return the Bond and BG.

ambreen: I want to know from a legal perspective whether the custom guarantee validity is for 60 years or military accounts guarantee for 25 years if not cancelled and original instrument not returned. This is in relation to Pakistan laws.

venkatesan: who is the competent authority in customs to discharge the Bank Guaranty?

Jack: Sir, how to cancel the bond and bg under gst instructions?

suresh: Dear Sir, We are EPC contractors we are obliged to issue PBG for customer to get our final payments . In one case it has been agreed that the customer has to exchange final payment against our PBG , now we have opened the PBG and shared the copy with customer , but the customer is not clearing the payments for last 3 month, is it possible for us to cancel the PBG issued on his name. Kindly advise with best regards S Suresh

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