CMA Final · Indirect Tax Laws and Practice · Manufacture in Bond
Under section 59 of the Customs Act, 1962, an importer files a bill of entry for warehousing, and the duty assessed on the goods is Rs 4,00,000. What is the minimum sum for which the importer must execute the warehousing bond under sub-section (1)?
The bond must be for Rs 12,00,000. Section 59(1) requires the importer to execute a bond equal to thrice the duty assessed, so Rs 4,00,000 multiplied by three gives Rs 12,00,000.
- ARs 4,00,000
- BRs 8,00,000
- CRs 12,00,000Correct
- DRs 16,00,000
Explanation
Section 59(1) requires a bond in a sum equal to thrice the duty assessed. Rs 4,00,000 x 3 = Rs 12,00,000. Rs 8,00,000 uses twice the duty, which is the wrong multiple. Rs 4,00,000 uses the duty alone.
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