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

Kaveri Industries imported a consignment and paid duty on 15 June 2023. The goods were identified as those imported. Due to a delayed buyer, they were entered for export only on 20 August 2025, with no extension sought. Which statement is correct under Section 74?

Drawback is not available as of right. Section 74 requires goods to be entered for export within two years of paying duty. Entry came after two years and years-extension was not obtained; only the Board can extend the period on sufficient cause.

  1. ADrawback is allowed because identification is all that is required
  2. BDrawback is allowed at 98% since extension is automatic for delays
  3. CDrawback is not available as of right, since entry was after two years from payment of duty, unless the Board extends the period on sufficient causeCorrect
  4. DDrawback is allowed only at a rate fixed by notification because the period lapsed

Explanation

Section 74(1)(b) requires entry for export within two years from the date of payment of duty. Here it was about 2 years 2 months. The proviso lets the Board extend the period on sufficient cause, but no extension was obtained. The notified rate under 74(2) applies to used goods, not to late entry.

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