Skip to content

CMA Final · Indirect Tax Laws and Practice · Valuation and Related Party Transactions

A bill of entry for home consumption was presented on 20 June for goods arriving by a vessel whose entry inwards was on 25 June. The rate of duty was 10% on 20 June and 15% on 25 June, and duty was paid on 28 June at 18%. Under Section 15, what rate applies?

The applicable rate is 15%. When a bill of entry is presented before the vessel's entry inwards, Section 15 deems it presented on the date of entry inwards, so the rate in force on 25 June governs, not the earlier presentation date or the payment date.

  1. A15%, because the bill is deemed presented on the date of entry inwardsCorrect
  2. B10%, the rate on the date the bill was physically presented
  3. C18%, the rate on the date of payment of duty
  4. D12.5%, the average of the rates in force

Explanation

Under the proviso to Section 15(1), a bill of entry presented before the date of entry inwards of the vessel is deemed presented on that date. The rate on 25 June is 15%. Using 10% ignores the proviso, and 18% applies only to goods covered by the residuary clause (c).

Did you get it right without looking?

One question tells you little. A timed set on Valuation and Related Party Transactions shows your real accuracy, how long you take and where you lose marks.

Practise Valuation and Related Party TransactionsFree diagnostic mock

More Valuation and Related Party Transactions questions