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CA Final · Indirect Tax Laws · Importation and Exportation of Goods

Arjun Traders exported a consignment of goods from India last year and, being unable to sell them abroad, brings the same goods back into India. Customs treats this as re-importation. Under section 20 of the Customs Act, 1962 as it now stands, what is the position?

Re-imported goods are treated like any other imports. Section 20 makes them liable to duty and subject to all conditions and restrictions that apply to goods of like kind and value on importation, so Indian origin gives no automatic exemption.

  1. AThe goods are fully exempt from duty because they originated in India
  2. BThe goods are liable to duty and subject to the conditions and restrictions applicable to goods of the like kind and value on importationCorrect
  3. COnly the duty originally rebated on export is recoverable
  4. DThe goods are liable only to conditions and restrictions but not to duty

Explanation

Section 20 provides that goods imported into India after exportation are liable to duty and subject to all conditions and restrictions to which goods of like kind and value are liable on importation. The earlier provisos and Explanations were omitted in 1995. So neither a blanket exemption nor a duty-free restriction-only position applies.

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