Customs Warehousing System
Warehousing facilities allows for the storage of dutiable goods, where duties have not been legally paid for a period not exceeding 12 months. At any time before the end of the 12-month period the goods can be duty paid and released for home consumption. This is done by a process where the owner lodges an ex-warehouse declaration with Customs and pay duties and taxes due on the goods. The duty payable on goods shall be the rate in force at the time the ex-warehouse entry is lodged and the goods released from the warehouse.
Duties must be paid before goods can be released for home consumption. If goods are not entered for home consumption within the 12-month period they are forfeited to the state and resold/auctioned recover duty and GST forgone.
Goods under Customs control in relation to warehouses are goods that fall in two categories;
- Imported goods- being new goods that attract import duty; and
- Excisable goods – goods manufactured under bond and which attract Excise duty when entered for home consumption. Examples of these are beer, spirits, tobacco, and petroleum products.
The Application Process
Customs Warehouses are licensed by Customs after the client/applicant fully meets all the conditions set by the Commissioner of Customs. The licensed warehouses are used for the warehousing of imported goods and locally manufactured excisable goods, the property of the licensee/license holder.
Who can be a Warehouse Owner?
There are strict conditions applied to persons wishing to operate a Licensed Customs Warehouse and while anyone can apply for a license the conditions restrict the number of successful applicants.
The applicant, whether a person or company, must be registered with the Investment Promotion Authority of Papua New Guinea within the meaning of the Business Act 1998. They must also operate an enterprise whose core business activity requires the establishment of a Customs Warehouse. They must also have enough capital to sustain a warehouse and is able to meet all the security requirements set by Customs to ensure protection of the revenue and compliance with the Customs laws.
When applying for a new warehouse the following is required:
- Application letter to the Commissioner of Customs by interested persons or company
- Full name and address of applicant
- Full particulars of goods to be warehoused
- A sketch plan of the warehouse
- Evidence of financial capacity to operate a warehouse
- Any other necessary document(s) that customs may require to determine the granting of a Customs License.
If successful, the applicant will be informed in writing:
- The type of goods to be warehoused;
- The limit of permitted operations;
- Their responsibilities under the Customs Act 1951 and the liabilities to pay duty and GST on all goods unaccounted for;
- Physical security of the building and goods;
- Obligation under the Customs Act 1951 to provide whatever assistance is required by Customs officers when on site and in the performance of their duties; and
- Most importantly the successful applicant will be informed to lodge a Security in the form of a bank guarantee and pay a License fee.
A license will only be granted to an applicant if all the conditions and requirements are met to the satisfaction of the Commissioner of Customs. The license remains valid for each calendar year and must be renewed annually on or by the 10th working day of the year. The annual renewal license fee is K2000.00 and must be paid in one sum each year.
The Commissioner of Customs reserves the right to revoke or cancel the license if the license holder or any of its staffs are involved in breaches of the Customs Act 1951.
Before a license is issued, a security shall be given in the form of a Bank Guarantee to the satisfaction of the Commissioner of Customs. The value of the security is determined by taking into consideration the type of goods to be warehoused, the quantity of goods to be warehoused and whether the goods are high dutiable items and the risks involved and most importantly the value of goods to be warehoused in any one single year.