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CA Final · Indirect Tax Laws · Types of Duty

Kaveri Industries imports a set containing Article A (value Rs 1,00,000, ad valorem duty 10%) and Article B (value Rs 2,00,000, ad valorem duty 25%). The importer cannot produce any evidence of the separate values, and no evidence is otherwise available. Ignoring other levies, what is the basic duty on the set under section 19?

The duty is Rs 75,000. Where articles of a set liable on value attract different rates, section 19(b) charges the highest rate, 25%, on the whole set. With no separate value evidence, 25% of Rs 3,00,000 gives Rs 75,000.

  1. ARs 75,000Correct
  2. BRs 60,000
  3. CRs 35,000
  4. DRs 52,500

Explanation

Both articles are liable with reference to value at different rates, so the highest rate of 25% applies to the whole set. Value is Rs 3,00,000, and 25% of it is Rs 75,000. Rs 35,000 results from charging each article separately, which needs evidence under proviso (b).

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