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CA Final · Indirect Tax Laws · Types of Duty

Kaveri Traders imports a set of machinery articles. Article P (value ₹6,00,000) attracts duty at 10% ad valorem and Article Q (value ₹4,00,000) attracts 25% ad valorem. Kaveri produces evidence satisfactory to the proper officer of the separate value of each article. Applying section 19 of the Customs Act, 1962, what is the basic customs duty payable, ignoring other levies?

The duty is ₹1,60,000. Because Kaveri produced satisfactory evidence of each article's value, the proviso to section 19 allows separate charging at each article's own rate: 10% on ₹6,00,000 gives ₹60,000 and 25% on ₹4,00,000 gives ₹1,00,000.

  1. A₹1,60,000Correct
  2. B₹2,50,000
  3. C₹1,00,000
  4. D₹1,75,000

Explanation

The proviso to section 19(b) lets each article be charged separately at its own rate where evidence of value is produced. Duty = 6,00,000 x 10% = 60,000 plus 4,00,000 x 25% = 1,00,000, total 1,60,000. The figure 2,50,000 wrongly applies the highest rate to the whole set.

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