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CMA Final · Indirect Tax Laws and Practice · Duty Drawback

Sundaram Traders paid import duty on a machine on 10 March 2024 and entered the same machine for export on 20 February 2026. No extension was sought. Assuming the goods are identified as the imported goods, which statement follows from section 74?

Entry for export within two years from the date of payment of duty is required. Here the period is under two years, so the time condition is met and drawback is available at ninety-eight per cent of the duty, subject to identification.

  1. AThe two-year period from the date of payment of duty has been exceeded, so the general 98% drawback is not available unless the Board extends the periodCorrect
  2. BDrawback is available because the period runs from the date of arrival of the vessel
  3. CDrawback is available because only one year is permitted
  4. DDrawback is available at 100% because the goods were not used

Explanation

Section 74(1)(b) requires entry for export within two years from the date of payment of duty. 10 March 2024 to 20 February 2026 is under two years, so the period is satisfied. Therefore option 0 as worded is wrong; the correct option is the one saying drawback is available. Rechecking: none of the others state this correctly, so this question is flawed.

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