Chapter 9 STORES

Table of Content
Sections Descriptions
Sec 2 (38) Stores
Sec 2 (21) Foreign going vessels / Aircraft
Sec 2(7) Coastal Goods
Sec 85 Stores may be allowed to be warehoused without assessment to duty.
Sec 86 Transit and Transhipment of Stores
sec 87 Imported stores may be consumed on board a foreign-going Vessel or aircraft
Sec 88 Application of Section 69 (Export after Warehousing) & Drawback to Stores
Sec 89 Stores to be free of Export Duty
Sec 90 Concessions in respect of Imported Stores for the Navy

INTRODUCTION
There is a popular belief that custom duty is on trade and merchandise only and goods brought into India or taken out of
India in the course of international trade alone are liable to duty.
Normally stores are not imported into are exported out of India in course of international trade but by the very fact of
there being brought into India from a place outside India and vice versa. sometime such stores cleared in India & subject to
customs duty. special provisions is needed to keep control over such stores.

Stores principally cover up

Goods intended for consumption by the passengers and crew on board official aircraft with or not sold
► food, drink other need of passengers and crew
► certain essential medical items like first aid box, oxygen etc
► life saving things, life quotes & etc
► Entertainment equipment like musical instrument, video/ radio systems,

Goods necessary for the operation and maintenance of vessels or Aircraft

► Diesel oil, furnace oil, petrol , aviation turbine fuel

► spare parts for the maintenance and repairs of the conveyance

DEFINITIONS
SEC 2 (38) : “STORES”

&
MEANS INCLUDES
Fuel and spare parts and other articles of
Goods for use in a vessel or aircraft
equipment, whether or not for immediate fitting.

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122B
US
PORT

MUMBAI
PORT

Navel Vessels

Fishing Boat

MANGLORE
PORT

CHENNAI
PORT

Starting Point

Oil Extraction
 SEC 2(21)
FOREIGN - GOING VESSEL OR AIRCRAFT

& INCLUDES
MEANS
Any vessel or aircraft for the time being
engaged in the carriage of goods or
passengers between any port or (i) (ii) (iii)
airport in India and any port or airport Any naval vessel of a Any vessel engaged in Any vessel or aircraft
outside India, whether touching any foreign Government fishing or any other proceeding to a place
intermediate port or airport in India or taking part in any naval operations outside the outside India for any
not, exercises; territorial waters of India; purpose whatsoever;

STATUTORY PROVISIONS
SECTION 85: STORES MAY BE ALLOWED TO BE WAREHOUSED WITHOUT
ASSESSMENT TO DUTY.
► Where any imported goods are entered for warehousing and
► the importer makes and subscribes to a declaration that the goods are to be supplied as stores to vessels or aircrafts
without payment of import duty under this Chapter,
► the proper officer may permit the goods to be warehoused without the goods being assessed to duty.(Warehousing
without warehousing)

It has been found convenient to allow imported ship stores to be kept in a bonded warehouse and thereafter supply it to
vessels/aircraft as and when required. Normally when imported goods are allowed to be kept in a warehouse the importer is
required to bind him to pay the duty on the imported goods by execution of double duty bond. But it is difficult in case of stores to
execute bond every time for temporary period. Hence under section 85 a facility of warehousing without warehousing is allowed.

AMUL
EXPORT
WAREHOUSE

SECTION 86: TRANSIT AND TRANSHIPMENT OF STORES

1. Any stores imported in a vessel or aircraft may, without payment of duty, remain on board such vessel or aircraft while it is
in India.
2. Any stores imported in a vessel or aircraft may, with the permission of the proper officer, be transferred to any vessel or
aircraft as stores for consumption therein as provided in section 87 or section 90.

SECTION 87 IMPORTED STORES MAY BE CONSUMED ON BOARD A FOREIGN-GOING

VESSEL OR AIRCRAFT
Any imported stores on board a vessel or aircraft may, without payment of duty, be consumed thereon as stores during the
period such vessel or aircraft is a foreign-going vessel or aircraft.
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 SECTION 88: APPLICATION OF SECTION 69
(EXPORT AFTER WAREHOUSING) & DRAWBACK TO STORES
Warehoused goods may be cleared for issue as stores on board to foreign going vessels and Aircraft without payment of
import duty.

CASE STUDY M.J. EXPORTS LTD. V. CEGAT 1992 (60) E.L.T. 161 (S.C.)
The supreme court held that the imported goods can be exported without clearing it for home consumption
without payment of duty from the warehouse under section 69.
If imported goods are taken on board any foreign going vessels or Aircraft, duty paid on their import shall be repaid as
drawback as follows:
Aircraft Fuel and lubricant oil 100% Drawback
Other stores( e.g. food, drink etc,) 98% Drawback
Vessel Fuel, lubricant oil and other stores 98 % Drawback

Tutorial Notes
In case of imported shipstores, which have been re-exported after the import duties for the same have been paid, the original import
duty paid is eligible as drawback. However a special provision has been made in this regard for stores like fuel and lubricants oil
taken on board any foreign going aircraft whereby the whole of the import duty paid is eligible as drawback as against 98% eligible for
other imported goods.

SECTION 89: STORES TO BE FREE OF EXPORT DUTY

Goods produced or manufactured in India and required as stores on any foreign-going vessel or aircraft may be exported free of
duty in such quantities as the proper officer may determine, having regard to the size of the vessel or aircraft, the number of
passengers and crew and the length of the voyage or journey on which the vessel or aircraft is about to depart.

SECTION 90: CONCESSIONS IN RESPECT OF IMPORTED STORES FOR THE NAVY

1) Imported stores may be consumed on Board a naval ship without payment of duty.
2) Imported stores supplied to the ship of Indian navy are not subject to Import Duty.
3) The Imported stores taken on board any ship of Indian Navy are allowed to 100% duty drawback.

Tutorial Notes
Stores for the use in a ship of the indian navy and stores supplied free by the government for the use of the crew of a ship of
the indian navy, in accordance with their conditions of service.

COASTAL GOODS
SEC 2 (7) “Coastal Goods” means goods, other than imported goods, transported in a vessel from one port in India to another
PROCEDURE IN CASE OF COASTAL GOODS
Mumbai 1. The Consignor of any goods shall present “A Bill of Coastal goods”
in prescribed form.
2. “Bill of coastal goods” contains detail information about port of
Kolkata
loading and destinated port at which the goods are to be discharged.
3. The bill has been passed by Customs Officers.
4. After passing bill, the goods will be loaded and the bill handed over to
Goa the master of vessels.
5. The Master of vessels shall not permit the loading of the goods until
such bill is delivered to him by consignor.
6. The master of vessels will also carry an Advice book in which the
customs officers will make suitable entries, relating to the goods
loaded on the vessels at that port.
7. The Master of every such vessel shall carry the advice book on Board
the vessels and shall on arrival at each port of call deliver it to the
proper officer at that port for his inspection.
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