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CA Final · Indirect Tax Laws · Classification of Imported and Export Goods

Ganga Imports paid provisional duty on 1 April 2023 on goods assessed provisionally under section 18, and final assessment was completed on 1 December 2023 with an additional payment. It enters the identifiable, unused goods for export on 20 March 2025. Applying section 74(4), is the two-year condition met?

Yes, the condition is met. Under section 74(4)(b), for goods provisionally assessed, the date of payment of provisional duty is treated as the date of payment of duty. Two years from 1 April 2023 run to 1 April 2025, so entry on 20 March 2025 is in time.

  1. AYes, as the period runs from the provisional payment, 1 April 2023, and 20 March 2025 is within two yearsCorrect
  2. BNo, because the period runs from 1 December 2023 only
  3. CNo, because provisional assessment goods are excluded from drawback
  4. DYes, because the period is counted from the date of the entry for export

Explanation

Section 74(4)(b) deems the date of payment of provisional duty to be the date of payment of duty for goods provisionally assessed. Two years from 1 April 2023 ends 1 April 2025, and 20 March 2025 falls within that. Counting from final assessment is therefore not the rule, and provisional goods are not excluded.

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