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Considering GST on Insurance in the Calculation of Customs Duty


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.

Kindly advise.




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