CMA Final · Indirect Tax Laws and Practice · Duty Drawback
Ravi Exports re-exports imported goods that have been used in India after importation. Under Section 74 of the Customs Act, 1962, how is the rate of drawback for such used goods determined?
For used goods the rate is fixed by the Central Government through a notification in the Official Gazette, taking into account duration of use, depreciation in value and other relevant circumstances, as Section 74(2) provides. The flat ninety-eight per cent rule does not apply.
- AFixed at ninety-eight per cent of duty paid regardless of use
- BAs fixed by the Central Government by notification, having regard to duration of use, depreciation and other relevant circumstancesCorrect
- CDetermined by the Assistant Commissioner case by case without notification
- DNot allowed at all because the goods were used
Explanation
Section 74(2) overrides sub-section (1) for used goods; the rate is whatever the Central Government fixes by notification in the Official Gazette, considering duration of use, depreciation and other circumstances. Denial of drawback is not what the section says.
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