Warehousing decisions can make or break your supply chain.
And if you’re dealing with 𝗶𝗺𝗽𝗼𝗿𝘁𝘀 & 𝗲𝘅𝗽𝗼𝗿𝘁𝘀, you’ve probably come across these two terms :
𝗙𝗧𝗪𝗭 (𝗙𝗿𝗲𝗲 𝗧𝗿𝗮𝗱𝗲 𝗪𝗮𝗿𝗲𝗵𝗼𝘂𝘀𝗶𝗻𝗴 𝗭𝗼𝗻𝗲) 𝗼𝗿 𝗖𝗕𝗪 (𝗖𝘂𝘀𝘁𝗼𝗺𝘀 𝗕𝗼𝗻𝗱𝗲𝗱 𝗪𝗮𝗿𝗲𝗵𝗼𝘂𝘀𝗲)?
Both have their perks, but which one 𝗮𝗰𝘁𝘂𝗮𝗹𝗹𝘆 fits your business?
𝗛𝗲𝗿𝗲’𝘀 𝗮 𝗾𝘂𝗶𝗰𝗸 𝗯𝗿𝗲𝗮𝗸𝗱𝗼𝘄𝗻 👇
𝗙𝗧𝗪𝗭 (𝗙𝗿𝗲𝗲 𝗧𝗿𝗮𝗱𝗲 𝗪𝗮𝗿𝗲𝗵𝗼𝘂𝘀𝗶𝗻𝗴 𝗭𝗼𝗻𝗲)
- Duty deferment until goods leave the zone
- Ideal for re-exports & global distribution
- No time restrictions for storage
𝗖𝗕𝗪 (𝗖𝘂𝘀𝘁𝗼𝗺𝘀 𝗕𝗼𝗻𝗱𝗲𝗱 𝗪𝗮𝗿𝗲𝗵𝗼𝘂𝘀𝗲)
- Store goods with zero upfront duty
- Perfect for domestic sales & imports
- Can hold goods for a limited period
𝗦𝗼… 𝘄𝗵𝗶𝗰𝗵 𝗼𝗻𝗲 𝘄𝗶𝗻𝘀 𝗳𝗼𝗿 𝘆𝗼𝘂𝗿 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀?
| S No. | Aspect | FTWZ | CBW |
|---|---|---|---|
| 1 | Can a foreign entity hold inventory | ✓ Yes | ❌ No |
| 2 | Customs Duty | 📌 Deferred until clearance for home use | 📌 Same benefit allowed |
| 3 | Interest-free storage period | 📌 As long as LOA is valid | ⏳ Interest-free for 3 months; 15% p.a. thereafter |
| 4 | Temporary Removal (TTR) | ✓ Allowed up to 120 days for exhibitions | ❌ Not allowed |
| 5 | Re-export | ✓ Allowed, duty deferred & waived on export | ✓ Allowed, with the same benefit |
| 6 | Activities Allowed | Assembling, re-packing, handling, QA, etc. | ⚠️ Limited activities; No repacking/packing |
| 7 | Storage of Goods procured from DTA | ✓ Allowed | ❌ Not allowed |
| 8 | Dollar Billing to DTA Buyers | ✓ Allowed | ❌ Not allowed |
| 9 | Consolidation/Partial Sales | ✓ Allowed in FTWZ | ❌ Not allowed in CBW |
| 10 | Responsibility to comply with Customs rules | FTWZ Unit operator | Trader/Importer |
| 11 | Maximum storage period | 📌 As long as LOA is valid | ⏳ One year |
| 12 | Marking of purchase value to sale | ✓ Possible | ❌ Not possible |
| 13 | Can DTA buyer avail benefits of free trade agreement | ✓ Yes | ✓ Yes |