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CA Final · Indirect Tax Laws · Valuation under the Customs Act, 1962

Meera Textiles Pvt Ltd of Surat files a bill of entry for home consumption on 10 June for goods arriving by a vessel whose entry inwards is on 14 June. The basic customs duty rate is 10% on 10 June and 15% on 14 June. Duty is paid on 16 June. Which rate applies under the Customs Act, 1962?

The applicable rate is 15%. Because the bill of entry was presented on 10 June, before the vessel's entry inwards on 14 June, the proviso deems it presented on 14 June, and the rate in force on that deemed date governs.

  1. A10%, the rate on the date of presenting the bill of entry
  2. B15%, the rate on the date of entry inwards of the vesselCorrect
  3. C15%, the rate on the date of payment of duty
  4. DThe lower of the two rates, 10%, as the importer is a manufacturer

Explanation

For goods entered for home consumption, the rate is that in force on the date the bill of entry is presented. By the proviso, a bill of entry presented before the vessel's entry inwards is deemed presented on the date of entry inwards, 14 June, so 15% applies. Option A ignores the proviso; payment date is relevant only for other goods.

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