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CA Final · Indirect Tax Laws · Warehousing

Under section 73 of the Customs Act, 1962, when does the proper officer cancel a warehousing bond as discharged in full?

The bond is cancelled once the whole of the goods have been cleared for home consumption, exported, transferred or otherwise duly accounted for and all amounts due on them are paid. Section 73 then requires the proper officer to cancel it as discharged in full.

  1. AWhen half of the goods covered by the bond have been cleared for home consumption
  2. BWhen the whole of the goods have been cleared, exported, transferred or otherwise duly accounted for, and all amounts due on them have been paidCorrect
  3. CWhen the bond period of one year ends, irrespective of the goods remaining
  4. DWhen the importer applies for it, even if duty is outstanding

Explanation

Section 73 requires that the whole of the goods covered by the bond be cleared for home consumption, exported, transferred or otherwise duly accounted for, and that all amounts due on account of the goods be paid. Partial clearance or a mere request is not enough.

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