CMA Final · Indirect Tax Laws and Practice · Export Promotion Schemes under Foreign Trade Policy
Kaveri Exports Ltd exported goods worth ₹4,00,000 in contravention of the foreign trade policy. Under the penalty provision for contravention, what is the minimum penalty that can be imposed?
The minimum penalty is ₹10,000. The Act sets the penalty at not less than ten thousand rupees and not more than five times the value of the goods involved. Five times ₹4,00,000, which is ₹20,00,000, is the ceiling and not the minimum.
- A₹10,000Correct
- B₹4,00,000
- C₹20,00,000
- D₹2,00,000
Explanation
Section 11(2) provides a penalty of not less than ten thousand rupees and not more than five times the value of the goods, whichever is more. The floor is therefore ₹10,000. ₹20,00,000 is five times ₹4,00,000, which is the upper limit rather than the minimum.
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