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CMA Final · Indirect Tax Laws and Practice · Duty Drawback

Under the Customs Act, 1962, a trader re-exports easily identifiable imported goods on which customs duty was paid on importation. Subject to the conditions being met, what share of the import duty is re-paid as drawback under the main rule in section 74(1)?

Ninety-eight per cent of the import duty paid is repaid as drawback under section 74(1) on re-export of identifiable duty-paid goods, if identity is established to the officer's satisfaction and the goods are entered for export within two years of payment of duty.

  1. AFifty per cent of the duty paid
  2. BSeventy-five per cent of the duty paid
  3. CNinety-eight per cent of the duty paidCorrect
  4. DOne hundred per cent of the duty paid

Explanation

Section 74(1) provides that ninety-eight per cent of the duty paid on importation is re-paid as drawback, provided the goods are identified as those imported and are entered for export within the permitted period. The 100% option ignores the two per cent retained; the lower options have no basis in the text.

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