Skip to content

CMA Final · Indirect Tax Laws and Practice · Duty Drawback

Mehta Imports imported a batch of goods and paid provisional duty on 1 April 2025 under Section 18. Final assessment was completed on 20 September 2025 and the final duty was paid on 25 September 2025. The goods were entered for export on 15 May 2027. Under Section 74(4), which statement is correct about the two-year condition?

The two years run from 1 April 2025, the date of payment of provisional duty, as Section 74(4)(b) deems it the date of payment of duty. Entry on 15 May 2027 is late, so drawback is available only if the Board extends the period for sufficient cause.

  1. AThe period runs from 25 September 2025, so the goods are within time
  2. BThe period runs from 20 September 2025, so the goods are out of time
  3. CThe period runs from 1 April 2025, the date of payment of provisional duty, so the goods are out of time unless extended by the Board for sufficient causeCorrect
  4. DThe two-year condition does not apply to provisionally assessed goods

Explanation

Section 74(4)(b) deems the date of payment of provisional duty to be the date of payment of duty. Two years from 1 April 2025 ended 1 April 2027, and entry on 15 May 2027 is later. The goods qualify only if the Board extends the period for sufficient cause under the proviso. Counting from final payment gives a wrong, favourable result.

Did you get it right without looking?

One question tells you little. A timed set on Duty Drawback shows your real accuracy, how long you take and where you lose marks.

Practise Duty DrawbackFree diagnostic mock

More Duty Drawback questions