Computation problems in Custom Duty
Computation of customs duty: An importer imported some goods in February 2008 and the goods were cleared from Mumbai port for warehousing on 8th February 2008 after assessment. Assessable value was Rs.4,86,000 (US $ 10,000 at the rate of exchange Rs.48.60 per US $). The rate of duty on that date was 25% (assume that no additional duty is payable). The goods were warehoused at Pune and were cleared from Pune warehouse on
4th March 2008, when rate of duty was 20% and exchange rate was Rs.48.75 =1 US $. What is the duty payable while removing the goods from Pune on 4th March 2008?
Sol: As per section 14 of the Act, the assessable value is to be determined by applying rate of exchange in force on the date on which bill of entry is presented u/s 46. Under section
46, bill of entry is presented either for home consumption or for warehousing. Therefore, in
case of warehoused goods, the rate of exchange in the force on the date on which the into- bond bill of entry for warehousing is presented, i.e. in this case, Rs.48.60 per US $ on 8-2-
2008, shall be the rate applicable for arriving at the assessable value.
However, as per 15(1)(b) of the Act, the rate of duty applicable on goods cleared from warehouse U/s 68 shall be the rate in force on the date on which ex-bond bill of entry for home consumption is presented. Therefore, the rate of duty in force on 4-3-2008 i.e. 20% shall be applicable.
Accordingly, the duty, payable while removing the goods from warehouse shall be computed as follows –