Customs duty on warranty from foreign exporter

Jayanta Bandyopadhyay (238 Points)

01 February 2022  

While buying software plus hardware, European vendor is giving 2 years free warranty. Possibly, price is all inclusive. Now as Indian buyer wants extended 3 years, they will charge separately.

This warranty is probably paper based and to be generated after Supply invoice is settled. How to assess customs valuation, pay duty, applicable accounting standard, depreciation due to 3 years economic life, segregation from 2 years free out of 5 years warranty in totality.

Kindly guide.