CA Final · Indirect Tax Laws · Warehousing
Mehta Electronics Pvt Ltd files a bill of entry for warehousing, and the duty assessed on the goods is Rs 4,00,000. It is not covered by any general bond. As per the Customs Act, 1962, in what sum must the importer execute the warehousing bond?
The bond must be Rs 12,00,000. Section 59(1) of the Customs Act, 1962 requires the importer of goods covered by a warehousing bill of entry to execute a bond for thrice the duty assessed, and thrice Rs 4,00,000 equals Rs 12,00,000.
- ARs 4,00,000, equal to the duty assessed
- BRs 8,00,000, twice the duty assessed
- CRs 12,00,000, thrice the duty assessedCorrect
- DRs 16,00,000, four times the duty assessed
Explanation
Section 59(1) requires a bond in a sum equal to thrice the duty assessed. Thrice Rs 4,00,000 is Rs 12,00,000. Twice the duty (Rs 8,00,000) is a wrong multiple not found in the section.
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