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CMA Final · Indirect Tax Laws and Practice · Manufacture in Bond

Kaveri Industries imports goods for warehousing frequently. Under Section 59(2) of the Customs Act, 1962, which statement about a general bond is correct?

The Assistant Commissioner or Deputy Commissioner of Customs may permit a general bond in an amount he approves, covering warehousing of goods imported within a specified period. Security under Section 59(3) must still be furnished in addition to the bond.

  1. AThe Assistant or Deputy Commissioner may permit a general bond in an amount he approves for goods to be imported within a specified periodCorrect
  2. BThe Principal Commissioner must approve a general bond, which is always fixed at thrice the duty
  3. CA general bond removes the need to furnish any security under Section 59(3)
  4. DA general bond is allowed only when goods are re-exported without warehousing

Explanation

Section 59(2) lets the Assistant or Deputy Commissioner permit a general bond in an approved amount for goods imported within a specified period. Section 59(3) still requires security in addition to the bond, so the third option is wrong.

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