CMA Final · Indirect Tax Laws and Practice · Duty Drawback
A firm imported a printer on payment of duty of Rs 80,000 and used it for some time before re-export. For such used goods, who fixes the rate of drawback, and on what basis?
For used imported goods, the Central Government fixes the drawback rate by notification in the Official Gazette, having regard to the duration of use, depreciation in value and other relevant circumstances, as provided in section 74(2), rather than the general ninety-eight per cent.
- AThe Central Government by notification, having regard to duration of use, depreciation in value and other relevant circumstancesCorrect
- BThe Assistant Commissioner, at a flat 98% of duty
- CThe importer, by self-assessment based on book depreciation
- DThe Board, at 50% of duty for all used goods
Explanation
Section 74(2) says that for goods used after importation, the rate of drawback is such as the Central Government may fix by notification, considering duration of use, depreciation in value and other relevant circumstances. The flat 98% applies under sub-section (1) otherwise and not to used goods in this manner.
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