Vinayak Company imported goods valued at 10,00,000 vide a Bill of Entry presented before the proper officer on 15th December, 2024, on which date…
CA Final · Indirect Tax Laws · MTP · May 2025
Vinayak Company imported goods valued at 10,00,000 vide a Bill of Entry presented before the proper officer on 15th December, 2024, on which date the rate of customs duty was 20%. The proper officer decided that the goods should be subject to chemical or other test and therefore, the same were provisionally assessed at a value of 10,00,000 and Vinayak Company paid provisional duty of 2,00,000 on the same date. Vinayak Company wants to voluntarily pay duty of 1,50,000 on 20th January, 2025. (1) Can Vinayak Company provisionally pay the duty and what are the conditions which are to be complied before such payment is made? (2) Determine the amount of interest payable, if any, under section 18 of the Customs Act, 1962 assuming that the payment of 1,50,000 as stated above is made on 20th January, 2025 and that the final duty is assessed on 31st January, 2025 at 4,00,000 and the balance duty is paid on the same day.
Suggested Answer and Working Notes:
(1) Provisional assessment of duty is permitted in case where the proper officer deems it necessary to subject any imported goods or export goods to any chemical or other test [Section 18 of the Customs Act, 1962]. Thus, Vinayak Company can pay the duty on provisional basis. Before, the provisional assessment of duty, the importer must furnish such security as the proper officer deems fit for the payment of the deficiency, if any, between the duty finally assessed/re-assessed and the duty provisionally assessed. (2) Section 18 of the Customs Act, 1962 further stipulates that the importer is liable to pay interest, on any amount payable consequent to the final assessment order @ 15% p.a. from the first day of the month in which the duty is provisionally assessed till the date of payment thereof. Accordingly, amount of interest payable will be = [₹ 1,50,000 x 15% x 51/365] + [₹ 50,000 x 15% x 62/365] = 3,144 +1,274 = 4,418
Topics: Customs: Importation and Exportation of Goods
Related Questions in this Topic
- Bharti Company imported goods valued at ₹ 10,00,000 vide a Bill of Entry presented before the proper officer on 15th Jul...
- What is the procedure of disposal of goods imported from place outside India mentioned under section 48 of the Customs A...
- With reference to customs law, state the mandatory documents required for (any two for each): (i) Export of goods (ii) I...
- Mr. Sujoy, an Indian entrepreneur, went to London to explore new business opportunities on 01.04.2025. His wife also joi...
- Mrs. Subhadra, an Indian resident (36 years old) who was on a visit to China, returned after 6 months. She was carrying ...