The main rules of import valuation :
The main import valuation rules are –
| Rule-3 | The value of imported goods shall be the transaction value adjusted in accordance with provisions of Rule 10 relating to cost of services to be added to invoice price ( i.e.FOB VALUE ) to find transactional value .However , where for any reason transaction value is not acceptable ,or the same cannot be determined ,then the value shall be determined proceeding sequentially through Rules 4 to 9 as discussed herein after |
| Rule-4 | Transaction value of identical goods i.e. goods which are same in all respects, including physical quantity.
This method is applicable only when following conditions are satisfied- · Identical goods can be compared with the other goods of the same country from which import takes place. · These goods must be valued at a price which is produced by the same manufacturer. · If the price is not available ,then , the price of other manufacturers of the same country is to be taken in to account · If more than one value of identical goods is available, lowest of such value should be taken. |
| Rule-5 | Transaction value of similar goods i.e. Goods have like characteristics and components and perform same functions like say Her Honda Splendor and Bajaj Scooter are similar goods . But, Hero Honda two wheeler products namely Splendor and Passion are identical products. |
| Rule-6 | Determination of value- If the value of imported goods cannot be determined under the provisions of rule 3,4 & 5 as discussed above ,then the value shall be determined under the provisions of rule-7 OR when the value cannot be determined under rule -7 then ,under rule-8 |
| Rule-7 | Deductive Value : Based on the request of the importer ,if the custom officer approves ,either the deductive method or computed value method as the case may be can be adopted.
In this method valuation will be as under- · Assessable value is calculated by reducing post importation costs and expenses from selling price Ø Example: Selling price minus selling commission ,transportation ,insurance and other associated costs within India and duties and taxes paid in India. · The method may be used when goods are extracted on High seas e.g. minerals ,crude oil etc and brought in to India for sale.It will be import and dutiable. |
| Rule-8 | Computed Value : The value of imported goods shall be based on a computed value ,which shall consist of the sum of –
· The cost or value of materials and fabrication and other processing employed in producing imported goods; · An amount for profit and general expenses equal to that usually reflected in sales of goods of the same class or kind ,as the goods being valued which are made by producers in the country of exportation for export to India.; · The cost or value of all other expenses under sub rule (2) of rule -10 |
| Rule-9 | Residual Method or Best Judgement method : This method is applicable when all aforesaid methods are not applicable. |
| Rule-10 | Determination of cost of services : The following costs and services ,to the extent they are incurred by the buyer but have not been included in the price actually paid or payable for the imported goods shall be added to the invoice price (i.e. FOB Value ) to determine the transaction value for imported goods:
(i ) Cost and service charges : · Commission and brokerage ,except buying commission; · The cost of containers which are treated as being one for customs purpose with the goods in question i.e. cost of containers imported along with goods; · Cost of packing whether for labour or materials; (ii) Apportioned value of goods and services supplied by the buyer free or at concessional rate , to the extent the same is not included in price actually paid or payable; (iii) Royalties and license fee payable as condition of sale ,to the extent the same is not included in price actually paid or payable; (iv ) The value of any part of the proceeds of any subsequent resale ,disposal or use of the imported goods that accrues ,directly or indirectly to the seller; (v) All other payments actually made or to be made as a condition of sale of the imported goods ,by the buyer to the seller ,or by the buyer to the third party to satisfy an obligation of the seller ,to the extent that such payments are not included in the price actually paid or payable; |