CA Final · Indirect Tax Laws · Warehousing
Kaveri Imports Ltd. warehoused a consignment under a bond executed under section 59(1). It later moves the whole consignment from Warehouse A to Warehouse B. Which statement is correct as per section 59(4)?
The bond continues in force. Section 59(4) provides that a bond executed by the importer for any goods stays in force notwithstanding the transfer of those goods to another warehouse, so no fresh bond is needed merely because the goods move between warehouses.
- AThe bond lapses on transfer and a fresh bond must be executed
- BThe bond continues in force despite the transfer of the goods to another warehouseCorrect
- CThe bond continues only if the second warehouse is in the same city
- DThe bond stands reduced to the duty assessed, from thrice the duty
Explanation
Section 59(4) says a bond executed by an importer for goods continues in force notwithstanding transfer of the goods to another warehouse. There is no condition about location and no reduction of the bond amount. Hence a fresh bond is not needed merely for the move.
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