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CMA Final · Indirect Tax Laws and Practice · Export Promotion Schemes under Foreign Trade Policy

A firm holding an Importer-Exporter Code fails to pay a penalty imposed under the Foreign Trade (Development and Regulation) Act, 1992. Which consequence is expressly provided in Section 11?

The Adjudicating Authority may suspend the firm's Importer-Exporter Code until the penalty is paid or recovered, as stated in Section 11(7). The Act does not provide automatic permanent cancellation or waiver of the unpaid penalty.

  1. AThe Importer-Exporter Code may be suspended by the Adjudicating Authority till the penalty is paid or recoveredCorrect
  2. BThe Importer-Exporter Code is permanently cancelled immediately
  3. CThe firm is barred from all domestic sales
  4. DThe penalty is automatically waived after one year

Explanation

Section 11(7) states that, without prejudice to other provisions, the IEC of a person who fails to pay a penalty may be suspended by the Adjudicating Authority until the penalty is paid or recovered. It does not provide permanent cancellation, domestic sales bar or waiver.

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