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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 wishes to prohibit export of a certain agricultural product by notification. Which of the following is a purpose specified in section 11(2) that can support such a prohibition?

Prevention of shortage of goods of any description is a listed purpose under section 11(2), so the Central Government may prohibit export by notification on that ground. Revenue raising, supporting domestic prices or general import substitution are not specified purposes in that sub-section.

  1. AIncreasing the revenue collection of the Central Government
  2. BRaising the market price of the product for domestic farmers
  3. CPrevention of shortage of goods of any descriptionCorrect
  4. DEncouraging import substitution in all sectors

Explanation

Section 11(2)(d) lists prevention of shortage of goods of any description as a purpose. Revenue augmentation, price raising and general import substitution are not listed purposes; the closest listed items concern establishment of industry or surplus prevention, which do not match these options.

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