15 February 2023
When the Customs duty is calculated, should we consider GST on Insurance premium also to arrive at Assessable value ?
Example 1 : Insurance sum assured - Rs 30 Crores Premium paid - Rs 10 lakhs GST paid @ 18% - Rs 1.8 Lakhs % of insurance - (Rs 10 lakhs / Rs 30 crores) X 100 - 0.0033 % C & F price - USD 100 Insurance - 0.0033 ( 0.0033 % of USD 100) CIF price / Assessable value - USD 100.0033
Example 2 : Insurance sum assured - Rs 30 Crores Premium paid - Rs 10 lakhs GST paid @ 18% - Rs 1.8 Lakhs Premium paid and GST - Rs 11.8 Lakhs % of insurance - (Rs 11.8 lakhs / Rs 30 crores) X 100 - 0.0039 % C & F price - USD 100 Insurance - 0.0039 ( 0.0039 % of USD 100) CIF price / Assessable value - USD 100.0039
My opinion : Since the Input tax credit is availed for GST portion of Insurance premium, it need not be considered for arriving Assessable value. So, Example 1 is correct.