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CA Final · Indirect Tax Laws · Valuation under the Customs Act, 1962

Arjun Traders imported goods and a bill of entry for home consumption was presented on 2 May. The goods were cleared from a warehouse under section 68 after a fresh bill of entry for home consumption was presented on 20 May. The duty rate was 12% on 2 May and 18% on 20 May. Which statement is correct under section 15?

The rate is 18%. For goods cleared from a warehouse under section 68, the rate applicable is the rate in force on the date the bill of entry for home consumption is presented for such clearance, here 20 May.

  1. A12% applies, as the warehousing bill of entry was presented on 2 May
  2. B18% applies, as the rate on the date the home consumption bill of entry is presented for clearance from the warehouse appliesCorrect
  3. C12% applies, as the rate on the date of import into the warehouse applies
  4. D18% applies, as the rate on the date of payment of duty after the warehouse period applies

Explanation

Section 15(1)(b) states that for goods cleared from a warehouse under section 68, the rate is that on the date a bill of entry for home consumption is presented under that section. That is 20 May, so 18% applies. Payment date is relevant only under clause (c) for other goods.

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