CA Foundation P4 · Chapter 9 · Question 5 of 15
An ad valorem import tariff of 15% is levied on a machine with an assessable value of Rs. 40,000. The tariff payable is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Rs. 6,000
Explanation
An ad valorem tariff is a percentage of the value of the good. Tariff = 15% x 40,000 = Rs. 6,000. Rs. 46,000 is the value including the tariff. A specific tariff, by contrast, would be a fixed amount per unit.
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