CMA Final · Indirect Tax Laws and Practice · Duty Drawback
Under the Customs Act, 1962, a trader re-exports easily identifiable goods on which import duty was paid. Subject to the conditions of the section, what share of the import duty is repaid as drawback?
Ninety-eight per cent of the import duty paid is repaid as drawback under section 74 when identifiable imported goods are re-exported, if they are identified to the officer's satisfaction and entered for export within two years from the date of payment of duty.
- AFifty per cent of the duty paid
- BSeventy-five per cent of the duty paid
- CNinety-eight per cent of the duty paidCorrect
- DThe full one hundred per cent of the duty paid
Explanation
Section 74(1) provides that ninety-eight per cent of the duty paid on importation is repaid as drawback, provided the goods are identified and entered for export within the time limit. The full 100% is wrong because the section expressly fixes the figure at 98%.
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