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CA Final · Indirect Tax Laws · Valuation under the Customs Act, 1962

Rohan Traders imports a consignment of goods by vessel. The vessel's entry inwards is on 20 October. Rohan presents the bill of entry for home consumption on 15 October, i.e., before the vessel's arrival. Duty is paid on 22 October. The rate is 10% till 17 October, 12% from 18 to 21 October, and 15% from 22 October. Which rate applies under Section 15 of the Customs Act, 1962?

The 12% rate applies. Under Section 15, a bill of entry presented before the vessel's entry inwards is deemed presented on the date of that entry inwards, here 20 October. The rate in force on that date is 12%, not the earlier presentation date or the payment date.

  1. A10%, the rate on the actual date of presenting the bill of entry
  2. B15%, the rate on the date of payment of duty
  3. C12%, the rate on the date of entry inwards of the vessel, as the bill of entry is deemed presented thenCorrect
  4. D11%, the average of the rates applicable

Explanation

Section 15(1)(a) uses the date of presentation of the bill of entry for goods entered for home consumption. The proviso deems a bill of entry presented before the vessel's entry inwards to be presented on the date of entry inwards, 20 October. The rate on 20 October is 12%. 10% ignores the proviso, and 15% wrongly uses the date of payment, which applies only to goods in other cases.

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