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CMA Final · Indirect Tax Laws and Practice · Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017

Rohan Traders imports a set consisting of Article A (value ₹4,00,000, duty 10% ad valorem), Article B (value ₹2,00,000, duty 20% ad valorem) and Article C (value ₹1,00,000, not liable to duty). The importer produces no evidence of the separate value of any article to the proper officer, and no such evidence is otherwise available. Under section 19 of the Customs Act, 1962, the total duty on the set is:

Duty is ₹1,40,000. Where a set contains articles liable to different ad valorem rates and the importer gives no evidence of separate values, the whole set, including the non-dutiable article, is charged at the highest rate of 20% on ₹7,00,000.

  1. A₹1,40,000Correct
  2. B₹1,00,000
  3. C₹1,20,000
  4. D₹1,60,000

Explanation

Under section 19(b) and (c), articles liable to duty by value at different rates are charged at the highest rate, and articles not liable to duty are charged at that rate too. Highest rate is 20%, so duty is 20% of ₹7,00,000 = ₹1,40,000. Computing separately (₹40,000+₹40,000 = ₹80,000) is possible only with evidence under the proviso, and even then the non-dutiable article would be exempt.

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