CMA Final Indirect Tax Laws and Practice Syllabus

What is the time limit for availing ITC on an invoice in GST?

ITC must be availed by the 30th November following the end of the financial year to which the invoice/debit note relates, or the date of filing the annual return, whichever is earlier.

What is the ITC set-off order (utilisation sequence) under GST after the IGST credit rule?

IGST credit must be fully utilised first (against IGST, then CGST/SGST in any order). Only after IGST is exhausted can CGST credit be used (against CGST then IGST) and SGST credit be used (against SGST then IGST). CGST cannot be set off against SGST and vice versa.

What is the rule for reversal of ITC when payment is not made to the supplier within 180 days?

If the recipient fails to pay the supplier the value plus tax within 180 days of the invoice date, the ITC availed must be reversed (added to output liability with interest); it can be re-availed when payment is subsequently made.

List three items on which ITC is blocked under Section 17(5) of the CGST Act.

Blocked credits include: motor vehicles for transport of persons (seating up to 13, with exceptions); food and beverages, outdoor catering, club/health/fitness membership; works contract and goods/services for construction of immovable property (other than plant & machinery); and goods lost, stolen, destroyed, or given as gifts/free samples.

How is ITC apportioned when inputs are used for both business and non-business or taxable and exempt supplies?

Under Section 17(2) and Rules 42/43, ITC must be apportioned; credit attributable to exempt supplies and non-business use is reversed, and only the portion attributable to taxable (including zero-rated) business supplies is allowed.

What is the charging section of the Customs Act, and on what is customs duty levied?

Section 12 of the Customs Act, 1962 is the charging section; duties of customs are levied at rates specified in the Customs Tariff Act, 1975 on goods imported into or exported from India.

Define 'taxable event' for import and export duty under customs law.

For imports, the taxable event is the crossing of the customs barrier / when goods reach the customs port (on goods cleared for home consumption, the date of presentation of bill of entry). For exports, the taxable event is when goods cross the territorial waters of India / when proper officer makes order permitting clearance for export (let export order).

What is the difference between 'India', 'customs waters' and 'Indian customs waters'?

'India' includes territorial waters (up to 12 nautical miles). 'Indian customs waters' extend to the Exclusive Economic Zone of India (up to 200 nautical miles), giving customs officers wider powers of search, arrest and seizure.

What is a Bill of Entry and a Shipping Bill in customs?

A Bill of Entry is the document filed by an importer for clearance of imported goods (home consumption or warehousing). A Shipping Bill is the document filed by an exporter for clearance of goods for export.

What is the relevant date for determining the rate of duty and tariff valuation for imported goods cleared for home consumption?

For goods entered for home consumption under Section 46, the relevant date is the date of presentation of the bill of entry (or arrival of the vessel/aircraft, whichever is later) under Section 15 of the Customs Act.

What types of customs duties are levied under the Customs Tariff Act?

Basic Customs Duty (BCD), Integrated GST (IGST) on imports, GST Compensation Cess, Social Welfare Surcharge, Anti-Dumping Duty, Countervailing Duty, Safeguard Duty, and Protective Duty.

What is the difference between Anti-Dumping Duty and Safeguard Duty?

Anti-Dumping Duty counters imports priced below normal value (dumping) that injure domestic industry — it is country/exporter specific. Safeguard Duty is a temporary measure against a sudden surge in imports causing serious injury — it applies to all sources irrespective of country.

What is 'transaction value' as the basis of customs valuation for imported goods?

Under Section 14 of the Customs Act and the Customs Valuation (Determination of Value of Imported Goods) Rules 2007, transaction value is the price actually paid or payable for the goods when sold for export to India, adjusted for specified additions, where buyer and seller are unrelated and price is the sole consideration.

What is the basis of customs value for imported goods — CIF or FOB?

Customs (assessable) value for imported goods is based on CIF, i.e. Cost + Insurance + Freight, plus landing/handling charges as prescribed, converted at the notified exchange rate.

What additions are made to the price under Rule 10 of the Customs Valuation Rules for imported goods?

Additions include commissions and brokerage (except buying commission), cost of containers and packing, value of goods/services supplied by buyer (assists), royalties and licence fees, cost of transport to port of importation, insurance, and loading/handling charges.

How is the assessable value of imported goods computed when freight or insurance is not ascertainable?

Where freight is not ascertainable, it is taken at 20% of the FOB value; where insurance is not ascertainable, it is taken at 1.125% of the FOB value (as per Customs Valuation Rules).

What is the sequence of valuation methods under the Customs Valuation (Imported Goods) Rules when transaction value cannot be determined?

In order: (1) Transaction value of identical goods; (2) Transaction value of similar goods; (3) Deductive value method; (4) Computed value method; (5) Residual/fallback method. The deductive and computed methods can be interchanged at the importer's request.

What is the difference between 'self-assessment' and 'provisional assessment' in customs?

Self-assessment (Section 17) means the importer/exporter assesses duty themselves, subject to verification by the proper officer. Provisional assessment (Section 18) is done when value/classification/rate cannot be finalised, allowing clearance against a bond/guarantee pending final assessment.

What is the procedure for clearance of imported goods for home consumption?

Filing of Import General Manifest by carrier, filing of Bill of Entry by importer, self-assessment of duty, examination/verification by proper officer, payment of duty, and issue of 'out of charge' order permitting clearance under Section 47.

What is warehousing under customs and what is its main benefit?

Warehousing (Sections 57-73) allows imported goods to be deposited in a customs bonded warehouse without immediate payment of duty; duty is paid when goods are cleared for home consumption, allowing deferment of duty until the goods are actually needed.

What is the procedure and key document for clearance of goods for export?

The exporter files a Shipping Bill (electronically), goods are assessed and examined, the proper officer issues a 'Let Export Order' under Section 51, and the goods are then loaded for export.

What is an Import General Manifest (IGM) and Export General Manifest (EGM)?

IGM is the manifest filed by the person in charge of a conveyance declaring all imported goods on board, filed before arrival. EGM is filed after loading declaring all goods being exported; EGM is essential evidence of export for duty drawback and other benefits.

What are the main Export Promotion Schemes under the Foreign Trade Policy?

Key schemes include Advance Authorisation, Duty Free Import Authorisation (DFIA), Export Promotion Capital Goods (EPCG), RoDTEP (Remission of Duties and Taxes on Exported Products), RoSCTL, and schemes for EOUs and SEZs.

What is the EPCG (Export Promotion Capital Goods) Scheme?

EPCG allows import of capital goods at zero customs duty for pre-production, production and post-production, subject to an export obligation of 6 times the duty saved, to be fulfilled within 6 years.

What is the Advance Authorisation Scheme?

Advance Authorisation permits duty-free import of inputs that are physically incorporated in export products (with allowance for normal wastage), subject to a minimum value addition and fulfilment of export obligation. It is based on Standard Input Output Norms (SION).

What is the RoDTEP scheme?

RoDTEP (Remission of Duties and Taxes on Exported Products) refunds embedded central, state and local duties/taxes on exported goods that were not otherwise refunded (e.g. VAT on fuel, mandi tax, electricity duty), issued as transferable e-scrips. It replaced the MEIS scheme.

What is Duty Drawback under the Customs Act?

Duty Drawback (Sections 74 and 75) is the refund of customs/excise duties paid on imported/indigenous materials used in the manufacture of exported goods, to make exports duty-neutral and globally competitive.

What is the difference between Section 74 and Section 75 duty drawback?

Section 74 drawback is on re-export of imported goods on which duty was paid (refund of up to 98% if goods are unused, with reduced rates based on usage period). Section 75 drawback is on imported materials used in manufacture of goods that are then exported, granted at All Industry Rates or Brand Rates.

Under Section 74 drawback, how much duty is refunded on re-export of unused imported goods, and how does usage affect it?

If goods are re-exported unused, 98% of the import duty is refunded. If used after importation, drawback is reduced on a sliding scale based on the period of use (e.g. nil if used for more than a specified period such as 36 months for most goods).

What is the difference between All Industry Rate (AIR) and Brand Rate of duty drawback?

AIR is a standard rate fixed by the government for a class of goods (as a percentage of FOB value or per unit), available to all exporters. Brand Rate is fixed for an individual exporter when no AIR exists or the AIR is less than 80% of actual duties paid.

What is a Special Economic Zone (SEZ) and what is its main fiscal feature?

An SEZ is a specifically delineated duty-free enclave deemed to be foreign territory for trade operations, duties and tariffs. Supplies from the Domestic Tariff Area (DTA) to an SEZ are treated as exports (zero-rated), and supplies from SEZ to DTA are treated as imports.

How is the supply of goods from the Domestic Tariff Area (DTA) to a SEZ unit treated under GST and customs?

It is treated as a zero-rated 'export' supply under GST — the DTA supplier can supply under LUT/bond without payment of IGST or pay IGST and claim refund; the SEZ unit imports without payment of customs duty subject to authorised operations.

What are the key tax benefits available to a SEZ unit?

Duty-free import/domestic procurement of goods for authorised operations, zero-rated GST on supplies to SEZ, exemption from customs duties, and (historically) income-tax holiday under Section 10AA of the Income Tax Act for eligible units.