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

Under section 11 of the Customs Act, 1962, the Central Government notifies a prohibition on export of a specified agricultural product because the domestic market faces a likely scarcity, and also prohibits import of a specified product to protect domestic producers from serious injury. Gaurav Agro Ltd asks which statement about the power is correct. Which is correct?

The Central Government may, by notification in the Official Gazette, prohibit import or export either absolutely or subject to conditions. Section 11(2) lists the permitted purposes, including prevention of shortage of goods and prevention of serious injury to domestic production, so both scenarios are covered.

  1. AThe power can be exercised only for maintaining the security of India
  2. BThe prohibition must be absolute and cannot be made subject to conditions
  3. CThe Government may prohibit absolutely or subject to conditions, by notification, for purposes such as prevention of shortage of goods and prevention of serious injury to domestic productionCorrect
  4. DThe power covers imports only and not exports

Explanation

Section 11(1) lets the Central Government, by notification, prohibit import or export of specified goods either absolutely or subject to conditions, for the purposes in sub-section (2). Those include prevention of shortage of goods (d) and prevention of serious injury to domestic production (j). It covers both imports and exports, and is not limited to security.

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