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CA Final · Indirect Tax Laws · Types of Duty

Kaveri Industries imports a set of three value-based articles in one consignment: A (value Rs 1,00,000, rate 10%), B (value Rs 2,00,000, rate 20%) and C (value Rs 1,00,000, rate 15%). The importer produces no evidence of the separate values to the proper officer, and none is otherwise available. Ignoring other levies, what is the duty chargeable under Section 19?

The duty is Rs 80,000. Since the articles are value-based and liable at different rates, Section 19(b) charges the whole set at the highest rate of 20% on Rs 4,00,000, as no evidence of separate values is produced.

  1. ARs 60,000
  2. BRs 80,000Correct
  3. CRs 65,000
  4. DRs 70,000

Explanation

Value-based articles liable at different rates are charged at the highest rate, which is 20%. Total value is Rs 4,00,000, so duty is 20% x 4,00,000 = Rs 80,000. Rs 60,000 results from applying each rate separately (10,000 + 40,000 + 15,000 = 65,000 is also separate rates), which is allowed only with evidence under the proviso. Rs 70,000 is a 17.5% average.

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