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

Rohan Textiles Ltd imported a consignment of machine parts and paid customs duty on 10 March 2024. The parts are easily identifiable and unused. The firm now wishes to re-export them and claim drawback under section 74 of the Customs Act, 1962. Within what period from the date of payment of duty must the goods be entered for export to qualify, without any extension?

The goods must be entered for export within two years from the date of payment of import duty. Section 74(1)(b) fixes this period for drawback on re-export of duty-paid goods, and the Board may extend it only where sufficient cause is shown.

  1. ASix months
  2. BOne year
  3. CTwo yearsCorrect
  4. DThree years

Explanation

Section 74(1)(b) requires the goods to be entered for export within two years from the date of payment of duty on importation. The period can be extended by the Board only on sufficient cause being shown. Six months and one year are shorter than the statutory period, and three years is not available without an extension.

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