Sections 59 and 60 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 59 requires the importer of goods covered by a bill of entry for warehousing to execute a bond for thrice the assessed duty, and to furnish prescribed security. Section 60 lets the proper officer then order removal of the goods from the customs station for deposit in a warehouse. Section 59A is printed as omitted.
This article follows the Customs Act, 1962 as per the text on the CBIC portal updated to 30 March 2022. Later Finance Acts must be checked for changes to these sections before you act on them.
An importer whose goods are covered by a bill of entry for warehousing, assessed to duty, must execute a bond for a sum equal to thrice the duty assessed, plus prescribed security. A general bond is possible for goods to be imported within a specified period. Once section 59 is complied with, the proper officer may order removal of the goods for deposit in a warehouse, and the order can be made electronically on risk evaluation.
Section 59: the warehousing bond
Section 59 was substituted for the earlier section w.e.f. 14-5-2016 by section 126 of the Finance Act, 2016 (28 of 2016), as the footnote prints. The earlier text, printed in the footnote, used a different multiple and had different terms, and it is not the rule.
Sub-section (1): the bond
The importer of any goods in respect of which a bill of entry for warehousing has been presented under section 46 and assessed to duty under section 17 or section 18 shall execute a bond in a sum equal to thrice the amount of the duty assessed on such goods, binding himself:
| Clause | Undertaking in the bond |
|---|---|
| (a) | To comply with all the provisions of the Act and the rules and regulations made under it in respect of such goods |
| (b) | To pay, on or before the date specified in the notice of demand, all duties and interest payable under sub-section (2) of section 61 |
| (c) | To pay all penalties and fines incurred for the contravention of the provisions of the Act or the rules or regulations, in respect of such goods |
Note "thrice". The bond is for three times the duty assessed, not the duty itself. Our article on section 46 covers the bill of entry for warehousing.
Sub-section (2): general bond
For the purposes of sub-section (1), the Assistant Commissioner of Customs or Deputy Commissioner of Customs may permit an importer to execute a general bond in such amount as he may approve, in respect of the warehousing of goods to be imported by the importer within a specified period. So a regular importer need not execute a fresh bond for each consignment, if the officer permits. The amount is "as the Assistant Commissioner or Deputy Commissioner may approve"; the Act prints no figure.
Sub-section (3): security
The importer shall, in addition to the execution of a bond under sub-section (1) or (2), furnish such security as may be prescribed. The copy prints this sub-section without a closing full stop. The security is prescribed; the Act states no amount or form. If you are working out the bond and security for a bonded facility, our private bonded warehouse licence team can walk through it.
Sub-sections (4) and (5): transfers
- Transfer to another warehouse (4). Any bond executed under the section by an importer in respect of any goods continues in force notwithstanding the transfer of the goods to another warehouse.
- Transfer to another person (5). Where the whole or any part of the goods is transferred to another person, the transferee shall execute a bond in the manner specified in sub-section (1) or (2) and furnish security as specified in sub-section (3).
Our article on the owner's right to deal with warehoused goods takes up transfers between warehouses in sections 64 to 67.
Section 59A: omitted
Section 59A is printed as omitted. The footnote says it was omitted w.e.f. 13-05-1994 by section 60(4) of the Finance Act, 1994 (32 of 1994). The old text is not the rule.
Section 60: permission for removal of goods for deposit in a warehouse
Section 60 was substituted w.e.f. 14-5-2016 by section 127 of the Finance Act, 2016.
Sub-section (1): the order
When the provisions of section 59 have been complied with in respect of any goods, the proper officer may make an order permitting removal of the goods from a customs station for the purpose of deposit in a warehouse. The proviso says such an order may also be made electronically through the customs automated system on the basis of risk evaluation through appropriate selection criteria. The proviso was inserted w.e.f. 29-3-2018 by section 82 of the Finance Act, 2018 (13 of 2018).
Sub-section (2): deposit in the prescribed manner
Where an order is made under sub-section (1), the goods shall be deposited in a warehouse in such manner as may be prescribed.
The order under section 60(1) is also the starting point for the periods in section 61: the one-year period and the ninety-day interest period run from "the date on which the proper officer has made an order under sub-section (1) of section 60". See our article on section 61.
The regulations on custody and handling
The copy consulted of the Warehouse (Custody and Handling of Goods) Regulations, 2016 is dated 1 October 2019 (file date; the first lines show an issue date of 14-May-2016). Its table of contents lists regulations on the appointment of a warehouse keeper, facilities, equipment and personnel, and receipt of goods from a customs station. This article takes no rule-wise detail from it.
The sequence, step by step
- The importer presents a bill of entry for warehousing (section 46).
- The goods are assessed to duty (section 17 or 18).
- The importer executes a bond for thrice the duty, or a general bond, and furnishes prescribed security (section 59).
- The proper officer orders removal for deposit in a warehouse (section 60(1)).
- The goods are deposited in the prescribed manner (section 60(2)).
- The period under section 61 starts from the order.
For the licence of the warehouse into which the goods go, see our article on sections 57 and 58.
A worked example
Veda Wines imports wine and presents a bill of entry for warehousing. After the goods are assessed to duty, the importer must execute a bond for a sum equal to thrice the duty assessed, binding itself to comply with the Act, to pay duties and interest under section 61(2) by the date in a notice of demand, and to pay any penalties and fines. It also furnishes the security prescribed. Because it imports regularly, it asks the Assistant Commissioner for a general bond for goods to be imported within a specified period. With the bond in place, the proper officer makes an order permitting removal of the goods from the customs station for deposit in a licensed warehouse, perhaps electronically on risk evaluation. If Veda Wines later sells part of the goods to another trader, section 59(5) makes the transferee execute its own bond and furnish security.
Practical points
- Compute the bond as three times the assessed duty. The text says "thrice".
- Ask about a general bond. The Assistant Commissioner or Deputy Commissioner may permit one for imports within a specified period.
- Budget for the prescribed security. It is in addition to the bond.
- Remember transfers. A transferee must execute its own bond and furnish security.
- Watch the section 60 order date. Time under section 61 runs from it.
Need help with warehousing bonds?
If you are planning to warehouse imported goods and want to understand the licence, bond and security steps together, see our private bonded warehouse licence service.
Key takeaways
- Section 59 requires a bond for a sum equal to thrice the duty assessed, for goods covered by a bill of entry for warehousing.
- The bond binds the importer to comply with the Act, to pay duties and interest under section 61(2), and to pay penalties and fines.
- A general bond may be permitted for goods to be imported within a specified period.
- Prescribed security is required in addition to the bond.
- A transferee of goods must execute a bond and furnish security.
- Under section 60, the proper officer may, after compliance with section 59, order removal of the goods for deposit in a warehouse.
Read next
- Sections 57 and 58: licensing of public and private warehouses
- Sections 58A and 58B: special warehouses and cancellation of licence
- Section 61: period for which goods may remain warehoused and interest
- Customs bonded warehouse: types and procedure
Disclaimer: Based on the Customs Act, 1962 as published on the CBIC Tax Information Portal, updated to 30 March 2022 (amended up to the Finance Act, 2022), as consulted on 2 October 2026. Finance Acts of 2023 and later, and the current rules, regulations and notifications, should be checked. This article is general information, not legal advice; check the official text before acting.