CA Final · Indirect Tax Laws · Warehousing
Orion Chemicals executed a warehousing bond for goods stored in warehouse W1 and later moved the goods, with permission, to another warehouse W2, both being importer-owned transfers. Under section 59(4) of the Customs Act, 1962, what is the effect on the bond?
The bond continues in force. Section 59(4) says a bond executed by the importer for goods stays valid notwithstanding the transfer of those goods to another warehouse, so no fresh bond is needed solely because of the move from W1 to W2.
- AThe bond lapses and a fresh bond is required for W2
- BThe bond continues in force despite the transfer of the goods to another warehouseCorrect
- CThe bond continues only if the duty is paid on transfer
- DThe bond is cancelled and security is refunded
Explanation
Section 59(4) states that a bond executed by an importer in respect of goods continues in force notwithstanding transfer of the goods to another warehouse. Hence no fresh bond is needed merely for this transfer.
Did you get it right without looking?
One question tells you little. A timed set on Warehousing shows your real accuracy, how long you take and where you lose marks.
More Warehousing questions
- Arya Imports executed a bond under section 59 for goods warehoused in Warehouse A. The goods are moved to Warehouse B, with the same importe…
- Dev Marine Supplies imported provisions and warehoused them under a bond. All goods covered by the bond were later partly cleared for home c…
- Kaveri Electronics imports components that are warehoused under a bond executed under section 59(1). The whole of the goods are later sold t…
- Nirmal Textiles has goods in a customs warehouse. Its manager proposes the following steps. Which one is a right of the owner of warehoused …
- Under section 73 of the Customs Act, 1962, when does the proper officer cancel a warehousing bond as discharged in full?
- Kaveri Traders warehoused imported electronic goods under a bond executed under section 59. It later transferred the whole consignment to a …