Valuation of imports

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CA sheenu jain (Querist)

12 September 2013 whether there is any diff between fob price, fob value & transaction value.also on which value i.e. whether on fob price plus adjustment under rule 10(1) like material supplied by buyer ,design charges etc 20% / 1.125% of air freight and insurance is to be charged or on fob price alone without adjusting for rule 10(1) it is to be charged

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)

09 October 2013 According to the Customs Valuation Rules, 1988, the Customs Value should normally be the "Transaction Value", i.e., the price actually paid or payable after adjustment by Valuation Factors (see below) and subject to (a) Compliance with the Valuation Conditions (see below) and (b) Customs authorities being satisfied with the truth and accuracy of the Declared Value.

Rule 3(i) of the Customs Valuation Rules, 1988 states that the value of imported goods shall be the transaction value. Rule 4(i) thereof states that the transaction value of imported goods shall be the price actually paid or payable for the goods when sold for export to India, adjusted in accordance with the provisions of Rule 9.
The price actually paid or payable is the total payment made or to be made by the buyer to the seller or for the benefit of the seller for the imported goods. It includes all payments made as a condition of sale of the imported goods by the buyer to the seller or by the buyer to a third party to satisfy an obligation of the seller.
If objective and quantifiable data do not exist with regard to the Valuation Factors, if the Valuation Conditions are not fulfilled, or if Customs authorities have doubts concerning the truth or accuracy of the declared value in terms of Rule 10A of the Customs Valuation Rules, valuation has to be carried out by another method in the following hierarchical order:

Comparative Value Method – Comparison with Transaction Value of Identical goods (Rule 5);
Comparative Value Method – Comparison with Transaction Value of Similar goods (Rule 6);
Deductive Value Method – Based on sale price in the importing country (Rule 7); Computed Value Method – Based on cost of materials, fabrication and profit in the country of production (Rule 7A);
Fallback Method – Based on previous methods with greater flexibility (Rule 8)

MORE INFO:

https://www.dov.gov.in/newsite3/brief_on_customs_valuation.asp

https://wirc-icai.org/%28S%281hatnybmbnqedj4514nrwjil%29%29/ezine-new/VolumeII/articleforthemonth-customduty.aspx?AspxAutoDetectCookieSupport=1

https://www.dateyvs.com/tax/customs-law-primer/valuation-for-imports-and-exports/

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