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CA Final · Indirect Tax Laws · Importation and Exportation of Goods

Meridian Exports Ltd, a Pune firm, exported a consignment of machine parts last year. The goods were rejected by the foreign buyer and Meridian brought them back into India. Under the Customs Act, 1962, how are the re-imported goods treated for customs purposes?

Re-imported goods are liable to duty and subject to all conditions and restrictions that apply to goods of the like kind and value on importation. The statute gives no blanket exemption for Indian-origin goods; the earlier provisos were omitted, so ordinary import treatment applies.

  1. AThey are liable to duty and subject to the conditions and restrictions applicable to goods of the like kind and value on importationCorrect
  2. BThey are fully exempt from duty because they were originally of Indian origin
  3. CThey are liable to duty only if re-imported after two years from export
  4. DThey are liable to duty at 98% of the normal rate, being the drawback proportion

Explanation

Section 20 provides that goods imported into India after exportation are liable to duty and subject to all conditions and restrictions applicable to goods of like kind and value on importation. The original provisos giving exemptions were omitted in 1995. The two-year period and the 98% figure belong to drawback under section 74, not re-importation.

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