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CMA Final · Indirect Tax Laws and Practice · Remission of Duties

Meera Traders imported a consignment and, before any order for clearance for home consumption under section 47 or any order for deposit in a warehouse was made, decided to relinquish title to the goods. No offence appears to have been committed regarding the goods. What is the consequence?

Meera Traders is not liable to pay duty on the goods. Under section 23(2), an owner may relinquish title before an order for home clearance or warehousing is made, and then owes no duty. The only bar is where an offence appears to have been committed.

  1. AShe remains liable to pay the full duty
  2. BShe must pay 50% of the duty as a penalty in lieu
  3. CShe is not liable to pay the duty on those goodsCorrect
  4. DShe may relinquish title only after clearance for home consumption

Explanation

Section 23(2) allows the owner to relinquish title at any time before an order for clearance under section 47 or for warehousing under section 60 is made. Upon relinquishment he is not liable to pay duty. The proviso bars this only where an offence appears to have been committed, which is not the case here.

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