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CMA Final · Indirect Tax Laws and Practice · Remission of Duties

Under the Customs Act, 1962, a consignment of imported goods is destroyed in a warehouse fire before it has been cleared for home consumption. The importer shows this to the satisfaction of the proper officer. What follows as regards duty on the destroyed goods?

The officer shall remit the duty. Where imported goods are destroyed before clearance for home consumption and this is shown to the proper officer's satisfaction, section 23(1) requires remission of the duty. No part payment or insurance condition applies.

  1. AThe officer shall remit the duty on such goodsCorrect
  2. BThe importer must pay duty on the value of the goods as imported
  3. CThe importer must pay half of the duty and the balance is remitted
  4. DRemission is allowed only if the goods had been insured

Explanation

Section 23(1) says that where imported goods are lost (otherwise than by pilferage) or destroyed before clearance for home consumption, and this is shown to the officer's satisfaction, the officer shall remit the duty. There is no half-duty rule and no insurance condition in the text.

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