A-9 , (IInd Floor ), Chittranjan Park
New - Delhi -110019
Tel: +91-11- 41600470
Fax: +91-11- 26272255
Most of the import duties and export incentives are based on the value of the goods imported or exported as the case may be.
The valuation is as per the customs guidelines for which the governing provisions are:
• Section 14 of the Custom Act 1962
• Customs Valuation (Determination of Value of Imported Goods) Rules 2007
• Customs Valuation (Determination of Value of Export Goods) Rules 2007
Primarily the declared transacted value is accepted as value of the goods (except in specific cases). However the customs may not accept the declared value based on various reasons such as :--
• Related party transactions
• Significantly higher value of comparable identical/similar goods imported at or about the same time
• Abnormal / specific and special discounts.
• The mis-declaration/ non-declaration of specified parameters.
The export valuation rules have been introduced recently only and the implications on the supply chain and financial aspects of the business are not fully understood but it is advisable to carry out an analysis on the business transactions to avoid any compliance issues.
RE-EXPORTS and RE-IMPORTS
• Export of Imported Goods : in the same or substantially the same form may be made without a license / certificate / permission provided that the item to be imported or exported is not mentioned as restricted for import or export in the ITC (HS). Goods, including those mentioned as restricted item for import (except prohibited items) may be imported under Customs Bond for export in freely convertible currency without a license / certificate / permission provided that the item is freely exportable without any conditionality / requirement of license / permission as may be required under ITC (HS) Schedule II. If the goods have to be exported after having been paid duty, for reasons of being defective or unusable etc, they can be exported under drawback.
• Import on Export basis : New or second hand capital goods, equipments, components, parts and accessories, containers meant for packing of goods for exports, jigs, fixtures, dies and moulds may be imported for export without a license / certificate / permission on execution of Legal Undertaking / Bank Guarantee with the Customs Authorities provided that the item is freely exportable without any conditionality / requirement of license / permission as may be required under ITC (HS) Schedule-II.
Capital goods, equipments, components, parts and accessories, whether imported or indigenous, may be sent abroad for repairs, testing, quality improvement or up-gradation or standardization of technology and re-imported without a license / certificate / permission.
Re-imports of goods for reasons of being defective or rejected etc. can be re-imported wherein all the benefits that had been claimed are required to be reversed.
Special Valuation Branch (SVB)
Special Valuation Branch of the customs deals with cases involving related party transactions and follows a procedure as laid down in the circulars issued by CBEC from time to time. The procedure involves extensive investigation spread over a period of time and requires the importer to reply to a set of questionnaire and also maintain extensive documentation and furnish the information as and when required. After the investigation the customs may accept or reject the value. On rejection the value is re-determined based on the sequential methodology (identical/similar valuation, deductive valuation, computed valuation, residual valuation). At times such a redetermination may involve imposition of fine and penalty depending on the reasons of rejection of the value