CA Final · Indirect Tax Laws · Warehousing
Mehra Traders Pvt. Ltd. has filed a bill of entry for warehousing, which has been assessed to duty. The duty assessed on the goods is Rs. 4,00,000. Under the Customs Act, 1962, the importer must execute a warehousing bond for what sum, if it executes a bond for these specific goods?
The bond must be for Rs. 12,00,000. Section 59(1) of the Customs Act requires the importer of warehoused goods to execute a bond equal to thrice the duty assessed, and three times Rs. 4,00,000 gives Rs. 12,00,000.
- ARs. 4,00,000, being the duty assessed
- BRs. 8,00,000, being twice the duty assessed
- CRs. 12,00,000, being thrice the duty assessedCorrect
- DRs. 16,00,000, being four times the duty assessed
Explanation
Section 59(1) requires a bond in a sum equal to thrice the amount of duty assessed. Here 3 x Rs. 4,00,000 = Rs. 12,00,000. Twice the duty is a wrong multiple and does not match the statutory text.
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