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CA Final · Integrated Business Solutions (Multidisciplinary Case Study with Strategic Management) · Indirect Tax Laws

Case: Kaveri Precision Tools Ltd, Pune, imports a CNC machine from Germany. The goods arrive at Nhava Sheva and the bill of entry is presented on 10 June. The importer wants to know which date's rate of customs duty applies. Under the Customs Act, 1962, for goods entered for home consumption, the rate of duty and tariff valuation (if any) applicable is the rate in force on which date?

The rate in force on the date the bill of entry is presented applies to goods cleared for home consumption. If it is presented before the vessel's arrival, the date of arrival applies instead. Shipment, order and remittance dates play no role in fixing the rate.

  1. AThe date on which the bill of entry is presentedCorrect
  2. BThe date on which the ship left the German port
  3. CThe date on which the purchase order was placed
  4. DThe date on which the payment is remitted to the supplier

Explanation

For goods cleared for home consumption, the rate applicable is the rate in force on the date the bill of entry is presented under section 15. If the bill of entry is presented before the arrival of the vessel, the date of arrival of the vessel is taken. The shipment, order and payment dates are irrelevant.

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