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CMA Final · Indirect Tax Laws and Practice · Export Promotion Schemes under Foreign Trade Policy

Sunrise Textiles Ltd, Surat, exported goods worth Rs 4,00,000 in contravention of the foreign trade policy. Under Section 11(2) of the FT(D&R) Act, 1992, what is the penalty range?

The penalty is at least Rs 10,000 and up to five times the value of the goods, whichever is more. Five times Rs 4,00,000 gives Rs 20,00,000, so the range runs from Rs 10,000 to Rs 20,00,000.

  1. AMinimum Rs 10,000 and maximum Rs 4,00,000, whichever is more
  2. BMinimum Rs 10,000 and maximum Rs 20,00,000, whichever is moreCorrect
  3. CMinimum Rs 20,000 and maximum Rs 8,00,000
  4. DFixed at five times the value, i.e. Rs 20,00,000

Explanation

The penalty is not less than Rs 10,000 and not more than five times the value of the goods, whichever is more. Five times Rs 4,00,000 is Rs 20,00,000. Option A uses the value only (one time), a wrong multiple.

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