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

The Central Government wishes to prohibit export of a specified commodity by notification, to prevent shortage of that commodity in the country. Under section 11 of the Customs Act, 1962, what is the position?

The Government may prohibit the export by notification, either absolutely or subject to conditions, because section 11 lists prevention of shortage of goods of any description as a valid purpose. The power covers both imports and exports and needs no exporter consent.

  1. AIt cannot do so, as only imports may be prohibited
  2. BIt may prohibit export absolutely or subject to conditions, since prevention of shortage of goods of any description is a listed purposeCorrect
  3. CIt may do so only for the maintenance of security of India
  4. DIt may do so only with the consent of the exporters affected

Explanation

Section 11(1) empowers the Central Government to prohibit import or export of specified goods, absolutely or subject to conditions, by notification if necessary for a purpose in sub-section (2). Clause (d) lists prevention of shortage of goods of any description. The power covers exports and is not limited to security purposes.

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