CA Final · Indirect Tax Laws · Warehousing
Sunrise Traders Pvt Ltd imports a consignment of machinery parts and files a bill of entry for warehousing. The bill is assessed and the customs duty assessed is Rs 4,00,000. Under the provisions of the Customs Act, 1962, what is the minimum amount for which the importer must execute the warehousing bond in respect of this consignment (ignoring any general bond)?
The bond must be Rs 12,00,000. Section 59(1) of the Customs Act requires the importer of goods assessed for warehousing to execute a bond equal to thrice the duty assessed, and three times Rs 4,00,000 equals Rs 12,00,000.
- ARs 4,00,000, being the duty assessed
- BRs 8,00,000, being twice the duty assessed
- CRs 12,00,000, being thrice the duty assessedCorrect
- DRs 16,00,000, being four times the duty assessed
Explanation
Section 59(1) requires the importer of goods for which a bill of entry for warehousing has been assessed to execute a bond for a sum equal to thrice the duty assessed. Thrice of Rs 4,00,000 is Rs 12,00,000. Rs 8,00,000 is wrong because it uses twice the duty, which is not the statutory multiple.
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