Skip to content

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

Gupta Exports Ltd is permitted by a Central Government notification to make deferred payment of export duty. It fails to pay part of the duty by the due date specified by rules. Which statement follows from section 51 of the Customs Act, 1962?

Interest is payable on the unpaid or short-paid duty until the date of payment, at a rate fixed by the Central Government by notification, not below five per cent and not above thirty-six per cent per annum. Failure in part is covered, and no fixed rate is stated.

  1. ANo interest is payable, because deferred payment was permitted
  2. BThe exporter must pay interest on the unpaid or short-paid duty till payment, at a rate not below five per cent and not exceeding thirty-six per cent per annum as fixed by the Central Government by notificationCorrect
  3. CThe exporter must pay a fixed interest of 18% per annum as stated in the section
  4. DInterest is payable only if the entire duty, and not part, remains unpaid

Explanation

Section 51(2) applies where the exporter fails to pay export duty in full or in part by the due date under the deferred-payment proviso. Interest is then payable on the unpaid or short-paid duty until payment, at a rate fixed by notification, between five and thirty-six per cent per annum. The section states no fixed rate, and part-payment failure is covered.

Did you get it right without looking?

One question tells you little. A timed set on Importation and Exportation of Goods shows your real accuracy, how long you take and where you lose marks.

Practise Importation and Exportation of GoodsFree diagnostic mock

More Importation and Exportation of Goods questions