Execution of bond with customs
What is bond execution? How does execution of bond formalities work?
Executing a bond with any individual, group or authorities means the executer of bond legally commits to fulfill the terms and conditions as per the details mentioned in bond.
You may be an importer or exporter. The goods you import from other country or goods you export may be attracted duty, depends up on the nature of goods importing or exporting. Government provides various types of duty exemption for various exporters and importers. If you are eligible in any of the same, you can avail such benefit of exemption in payment of duty for imports or exports. For example, you need to import machinery for manufacture at your factory. The finished products manufactured with the said machine are exported. You are eligible to get exempted from duty amount, under the import of said machinery because, the imported machinery is used to manufacture goods for export. Government exempts import duty on the basis of your commitment of exports in forthcoming years. How can Government monitor your fulfillment of export obligation? So you are executing a bond with customs and committing government that you will fulfill export obligation as per the details given in the bond. If you do not fulfill the export obligation, you will be penalized up to extend of your obligation.
There are many types of execution of bond with customs used for exemption under various types of duty exemptions and other government benefits. You need to find out under which notification falls those exemptions to claim duty exemption. Once after obtaining a specimen copy of the said bond, you need to prepare the said bond after paying nominal legal stamp duty. You can either execute with the licensing authority or customs department or both as per the guidelines of customs law and procedures.
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