VALUATION
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
Re-Exports:
• 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.
Re-Imports:
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
