CA Final · Indirect Tax Laws · Warehousing
Ashoka Traders Pvt Ltd files a bill of entry for warehousing for machine parts. The bill is assessed and the duty assessed is Rs 4,00,000. The importer is to execute a warehousing bond for these goods under the Customs Act, 1962 (without a general bond). What is the minimum sum of the bond?
The bond must be Rs 12,00,000. Section 59(1) requires the importer to execute a bond equal to thrice the duty assessed on the warehoused goods, and three times Rs 4,00,000 gives Rs 12,00,000. Twice or once the duty would be insufficient.
- ARs 4,00,000
- BRs 8,00,000
- CRs 12,00,000Correct
- DRs 16,00,000
Explanation
Section 59(1) requires a bond in a sum equal to thrice the duty assessed. Thrice Rs 4,00,000 is Rs 12,00,000. Rs 8,00,000 uses twice the duty, which is the wrong multiple.
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