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

Sundaram Spices Ltd exports goods liable to export duty. The Central Government has permitted its class of exporters to make deferred payment of export duty, but Sundaram fails to pay by the due date specified by rules. Which statement is correct under section 51?

Interest is payable on the unpaid duty until it is paid, at a rate fixed by Central Government notification within the range of 5% to 36% per annum. Section 51(2) imposes this on exporters who miss the due date for deferred payment of export duty.

  1. AInterest is payable on the unpaid duty till the date of payment, at a rate not below 5% and not exceeding 36% per annum fixed by notificationCorrect
  2. BInterest is payable at a fixed 18% per annum
  3. CNo interest is payable, but the exporter's goods are confiscated
  4. DInterest is payable only if the delay exceeds one year

Explanation

Section 51(2) requires an exporter who fails to pay deferred export duty by the due date to pay interest on the unpaid or short-paid duty till payment, at a rate not below five per cent and not exceeding thirty-six per cent per annum, as fixed by the Central Government by notification. No fixed 18% or one-year threshold appears in the text.

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