Sections 58A and 58B 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 58A lets the Principal Commissioner or Commissioner of Customs licence a special warehouse, which the proper officer causes to be locked and which nobody may enter or remove goods from without his permission. Section 58B covers cancellation of a warehouse licence, suspension of operation during an inquiry, and removal of the goods within seven days after cancellation.
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.
A special warehouse is licensed by the Principal Commissioner or Commissioner of Customs, is locked by the proper officer, and is entered or emptied only with his permission; the Board notifies the class of goods that must be deposited in it. A licence under section 57, 58 or 58A can be cancelled for contravention or breach of conditions after a reasonable opportunity of being heard. The operation can be suspended during an inquiry, and goods must be removed within seven days of service of a cancellation order.
Section 58A: licensing of special warehouses
Sections 58, 58A and 58B were substituted for the earlier section 58 w.e.f. 14-5-2016 by section 125 of the Finance Act, 2016 (28 of 2016), as the footnotes print. The earlier wording is printed in the footnotes but is not the rule.
Sub-section (1): licence and lock
The Principal Commissioner of Customs or Commissioner of Customs may, subject to such conditions as may be prescribed, licence a special warehouse wherein dutiable goods may be deposited. The same sub-section adds that such a warehouse "shall be caused to be locked by the proper officer and no person shall enter the warehouse or remove any goods therefrom without the permission of the proper officer".
So a special warehouse differs from the public and private warehouses in section 57 and 58 in one visible way: control by the customs lock. Our article on sections 57 and 58 covers the other two kinds.
Sub-section (2): the class of goods
The Board may, by notification in the Official Gazette, specify the class of goods which shall be deposited in the special warehouse licensed under sub-section (1). The text names no class; the class depends on a notification. Check the current notification before planning to use this route.
The regulations on special warehouses
The copy consulted of the Special Warehouse Licensing Regulations, 2016 is dated 14 May 2016 (file date). Its table of contents lists regulations on licensing of a special warehouse, conditions to be fulfilled by the applicant, grant of licence, validity of licence and non-transferability of licence. This article takes no rule-wise detail from it.
If you are considering a bonded facility of this kind, our private bonded warehouse licence service can guide you on the licensing options.
Section 58B: cancellation of licence
Section 58B has four sub-sections.
Sub-section (1): cancellation
Where a licensee contravenes any of the provisions of the Act or the rules or regulations made under it, or breaches any of the conditions of the licence, the Principal Commissioner of Customs or Commissioner of Customs may cancel the licence granted under section 57, section 58 or section 58A. The proviso says that before any licence is cancelled, the licensee shall be given a reasonable opportunity of being heard.
Sub-section (2): suspension during an inquiry
The Principal Commissioner or Commissioner may, without prejudice to any other action that may be taken against the licensee and the goods under the Act or any other law for the time being in force, suspend the operation of the warehouse during the pendency of an inquiry under sub-section (1).
Sub-section (3): effect of suspension
Where the operation of a warehouse is suspended under sub-section (2), no goods shall be deposited in it during the suspension. The proviso says the provisions of Chapter IX continue to apply to goods already deposited.
Sub-section (4): removal after cancellation
Where the licence is cancelled, the goods warehoused shall, within seven days from the date on which the order of cancellation is served on the licensee, or within such extended period as the proper officer may allow, be removed from the warehouse to another warehouse or cleared for home consumption or export. The proviso says that Chapter IX continues to apply to the goods already deposited until they are removed to another warehouse or cleared for home consumption or export during that period.
| Stage | What the text provides |
|---|---|
| Cancellation (1) | Possible for contravention of the Act, rules or regulations, or breach of licence conditions; the licensee must first be given a reasonable opportunity of being heard |
| Suspension (2) | Operation of the warehouse may be suspended while an inquiry is pending |
| During suspension (3) | No new deposits; Chapter IX still applies to goods already inside |
| After cancellation (4) | Goods to be removed within seven days of service of the order, or within an extended period allowed by the proper officer, to another warehouse or for clearance for home consumption or export |
Points to read carefully
- Cancellation is a power, not a duty. The text says "may cancel".
- The hearing comes before cancellation. The proviso uses "before any licence is cancelled".
- The seven days run from service of the order on the licensee. The text says the date on which the order is served.
- The proper officer can extend the seven days. The words are "such extended period as the proper officer may allow".
- Chapter IX does not fall away. The provisos keep its provisions applicable to goods still inside.
How these sections fit with the neighbours
Section 61, covered in our article on section 61, sets how long goods may remain warehoused. Section 58B(4) cuts that short for a cancelled licence by demanding removal within seven days. The article on sections 59 and 60 covers the bond. For manufacturing in a warehouse, see our post on bonded manufacturing under section 65.
A worked example
Crown Electronics holds a special warehouse licence. The proper officer locks the warehouse, and Crown's staff enter only when the officer permits, as sub-section (1) of section 58A says. Suppose the Commissioner suspects a breach of a licence condition and starts an inquiry. Under section 58B(2) he may suspend the operation of the warehouse, and under (3) no new goods can be deposited while the suspension lasts, though Chapter IX still covers the goods already inside. After giving Crown a reasonable opportunity of being heard, the Commissioner cancels the licence. Crown is served with the order on 10 June. Under sub-section (4), the goods must be removed to another warehouse or cleared for home consumption or export within seven days from 10 June, unless the proper officer allows an extended period.
Practical points
- Know the lock rule. A special warehouse is entered or emptied only with the proper officer's permission.
- Check the notified class of goods. Section 58A(2) depends on a Board notification.
- Keep licence conditions under review. A breach can lead to cancellation under section 58B(1).
- Ask for a hearing and keep records. The proviso guarantees a reasonable opportunity of being heard before cancellation.
- Plan a seven-day exit. After cancellation, goods must move within seven days of service, unless the proper officer extends.
Need help with a warehouse licence?
If you operate or plan a bonded facility and want to understand licence conditions and the risks of suspension or cancellation, our team can guide you. See our private bonded warehouse licence service.
Key takeaways
- A special warehouse is licensed by the Principal Commissioner or Commissioner, locked by the proper officer and entered only with permission.
- The Board notifies the class of goods to be deposited in a special warehouse.
- A licence under section 57, 58 or 58A can be cancelled for contravention or breach after a reasonable opportunity of being heard.
- Operation can be suspended during an inquiry, with no new deposits meanwhile.
- After cancellation, goods must be removed within seven days of service, or within an extended period the proper officer allows.
- Chapter IX continues to apply to goods already deposited.
Read next
- Sections 57 and 58: licensing of public and private warehouses
- Sections 59 and 60: warehousing bond and permission to deposit goods
- Section 61: period for which goods may remain warehoused
- Customs bonded warehouse: Sections 57 to 73
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.