CMA Final · Indirect Tax Laws and Practice · Duty Drawback
Meridian Pvt Ltd imported a printing press, paid duty, used it in India for three years, and now wishes to export it. Which statement correctly states how drawback is determined under section 74?
For used imported goods, the 98% rule does not apply. Section 74(2) says the Central Government fixes the drawback rate by notification, having regard to the duration of use, depreciation in value and other relevant circumstances, so a used printing press is governed by that notified rate.
- ANinety-eight per cent of the duty paid is repaid as in the case of unused goods
- BNo drawback is allowed for any used goods
- CThe rate is fixed by the Central Government by notification, having regard to the duration of use, depreciation in value and other relevant circumstancesCorrect
- DThe rate is fixed by the proper officer at the port of export in each case
Explanation
Section 74(2) overrides sub-section (1) for goods used after importation. The Central Government fixes the rate by notification in the Official Gazette, considering duration of use, depreciation and other circumstances. The 98% rule does not apply to used goods.
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