CA Final · Indirect Tax Laws · Warehousing
Mehta Electronics Pvt Ltd files a bill of entry for warehousing under section 46 for imported components. The bill is assessed and the assessed customs duty is Rs 4,00,000. Under the Customs Act, 1962, for the specific warehousing bond to be executed under section 59(1), what is the sum of the 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 equal to thrice the assessed duty, so 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 the importer to execute a bond in a sum equal to thrice the duty assessed. Thrice Rs 4,00,000 is Rs 12,00,000. Rs 8,00,000 wrongly uses twice the duty, a mistake of multiple.
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