MCQ Challenge On Determining Rate Of Duty Under Customs Act

MCQ SELF CHALLENGE #0086 ON DETERMINING RATE OF DUTY UNDER CUSTOMS ACT

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Warm Greetings from tax consultant in Gurgaon,

Here is the Next post of #MCQ on concept based practical professional knowledge on Determining Rate of Duty Under Customs Act in a unique manner to be self answered by participants. The detailed answer of these MCQs shall be posted next day for the self assessment of the participants

MCQ 86.1: Mr. Tapas has Exported Goods valuing Rs 8,00,000 to UK by vessel. He filed the shipping bill for Export on 28-02-2017 rate of duty - 5%). The permitting Clearance and loading of the goods for Exportation was made by the proper afficer on 1-03-2017rate of Duty 15%). The Ship left for UK on 04-03-2017 (rate of Duty 10%) and ship crossed the territorial waters of India on 5-03-2017(on this date. goods were exempt from Duty)

A) Export Duty Payable Rs. 800.000*5%

B) Export Duty Payable Rs. 6,00,000*15%

C) Export Duty Payable Rs. 800,000*10%.

D) Export Duty Payable is Nil

MCQ 86.2 What is the Export Duty payable for clearances of Good from Domestic Tariff Area (DTA) to Special Economic Zone under the SEZ Act. 2005 of the Customs Act 1962.

A) Duty Payable is rate prevailing for that good on that Date

B) Duty payable is 5%

C) No Duty payable as Export from DTA to SEZ is out of Scope of the Acts.

D) None of the Above

Answer MCQ Self Challenge #0086

This post of MCQ is on Determining Rate of Duty Under Customs Act

Answer MCQ 86.1:

B) Export Duty Payable Rs. 5,00,000*15%

Practical Analysis for MCQ 86.1:

• As per Section 15(a) the date of determination of Duty and tariff valuation in case of export goods is the date on which proper officer makes an offer for Loading & Clearance of goods for Exportation u/s 51
• Hence the Relevant Date in this case is 01-03-2017 and rate of Duty is 15%
• Export Duty payable by Mr. Tapas 800000 * 15%= Rs. 1,20,000

Based on the above analysis. Correct answer to MCQ 86.1: B) Export Duty Payable Rs. 800.000*15%

Answer MCQ 86.2:

C) No Duty payable as Export from DTA to SEZ is out of Scope of the Acts.

Practical Analysis for MCQ 86.2:

• If a person is not expressly brought within the Scope of Charging Section he cannot be taxed at all
• SEZ Act doesn't contain any provision for levy & Collection of Export Duty from DTA un to a unit in SEZ. Since there is no charging Section in SEZ Act providing for levy of Customs Duty on such goods. Export Duty cannot be levied under this Act.
• Reading Section 12(1) of the Customs Act, 1962 makes it apparent that customs duty can be levied only when the goods are imported into or exported beyond territorial water of India
• Since Both DTA & SEZ are located with in the territorial Waters of India, Supplies from DTA to SEZ would not Attract Section 12(1) of Custom Act & hence out of purview of Customs.

Based on the above analysis. Correct answer to MCQ 86.2: C) No Duty payable as Export from DTA to SEZ is out of Scope of the Acts.

(Disclaimer: The objective of the MCQ post is just to discuss the concept, it may happen by change of facts, the answer may be different Please do not treat this as professional opinion; you can definitely have your own opinion.)

Sincere Regards!

CA Sanjay Kumar Agrawal

Mobile: 9810116321