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What are the different methods of customs valuation allowed under the ACV?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Uma asked over 2 years ago

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6 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 acharya answered about 2 years ago

Deductive Value Method based on subsequent sale price in the importing country; 5. Computed Value Method based on cost of materials, fabrication and profit in the country of production; and 6. Fallback Method based on previous methods with greater flexibility. These methods require to be applied in the given sequence, starting with the first. Only when a method specified earlier in the sequence cannot be applied, can resource be taken on the next method in the sequence

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 veeru answered over 2 years ago

The preamble to the ACV recognizes that, to the greatest extent possible. the basis of customs value should be the transaction value. However, in all, it provides for 6 methods of valuation to be applied in the following order: 1. The Transaction Value Method; 2. Comparative Value Method based on Transaction Value of Identical goods;

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Picsjoin 2017224123730582 Archana answered over 2 years ago

Hie Uma, The preamble to the ACV recognizes that, to the greatest extent possible. the basis of customs value should be the transaction value. However, in all, it provides for 6 methods of valuation to be applied in the following order: 1. The Transaction Value Method; 2. Comparative Value Method based on Transaction Value of Identical goods; 3. Comparative Value Method based on Transaction Value of Similar goods; 4. Deductive Value Method based on subsequent sale price in the importing country; 5. Computed Value Method based on cost of materials, fabrication and profit in the country of production; and 6. Fallback Method based on previous methods with greater flexibility. These methods require to be applied in the given sequence, starting with the first. Only when a method specified earlier in the sequence cannot be applied, can resource be taken on the next method in the sequence.

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Open uri20170510 32134 1c996lj?1494421732 Anil answered over 2 years ago

India is presently following the provisions of the WTO Agreement on Customs Valuation (ACV) for determination of value on imported goods where Customs duty is levied with reference to value (ad-valorem rates). However, this does not apply to cases where tariff values have been fixed (see legal provisions below). 2. India is a founding Member of the GATT (presently WTO) and was actively involved in the GATT negotiations (Tokyo Round, 1973-79), which developed the Agreement on Customs Valuation (ACV). India implemented the ACV in August 1988. Legal provisions 3. Section 2(41) of the Customs Act, 1962 defines ‘Value’ in relation to any goods to mean the value thereof determined in accordance with the provisions of sub-section (1) of Section 14 thereof. 4. Sub-section (1) of Section 14, in turn, states that when a duty of customs is chargeable on any goods by reference to their value, the value of such goods shall be deemed to be: - "The price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation or exportation, as the case may be, in the course of international trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or offer for sale". 5. The provisions of sub-section (1) of Section 14 apply for the valuation of both imported goods and export goods. However, a common valuation law at international level applies only to imported goods and its basic principles are laid down in Article VII of General Agreement on Tariffs and Trade (GATT), 1948, currently known as GATT 1994 (administered by the World Trade organization, WTO). The Indian valuation law under Section 14(1) of the Indian Customs Act is based on the principles of Article VII of the GATT. This is, however, a deemed value allowing uplifting (loading) of declared value in a given case even when it represents the actual price of transaction. The Agreement on Customs Valuation (ACV), which came into force on 1st January 1981, lays down well defined methods of valuation to be strictly followed so as to ensure uniformity and certainty in valuation approach and to avoid arbitrariness. 6. Sub-section 1 A of the Indian Customs Act 1962 requires that the value of imported goods shall be determined under the Rule made in this behalf. The Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 lays down the methods of valuation based on the ACV. Transaction value, which is the price paid or payable for the imported goods, is the primary basis for valuation. If the transaction value method is not applicable in a specific case, the other methods of valuation prescribed in the Rules (based on ACV) have to be followed in a hierarchical order, subject to certain exceptions 7. Under the Customs Act, 1962, the Central Government has also been empowered to fix Tariff Values (sub-section (2) of Section 14) for any product. If Tariff Value is fixed for any goods, then ad-valorem duties are to be calculated with reference to such Tariff Value. The tariff values may be fixed for any class of imported or export goods having regard to the trend of value of such or like goods and the same has to be notified in the official gazette. This measure is resorted to only in rare cases where the price fluctuations in the market are rampant having significant economic impact. Currently tariff values have been fixed in respect of imported Crude Palm Oil, RBD Palm Oil, Crude Palmolein, RBD Palmolein, Crude Soyabean Oil and Brass Scrap. 8. As far as export goods are concerned, provisions of sub-section (1) of Section 14 provide a complete code of valuation by itself and there are no separate valuation rules for that purpose. Methods of Valuation 9. The Customs Valuation Rules, 1988, lays down six methods for the valuation of imported goods. The primary basis for valuation is the "Transaction Value". However, it is subject to adjustment by certain Valuation Factors (see Rule 9). There are also certain conditions for the transaction value method to be applicable (see sub-rule 2 of Rule 4). In certain situations, the Customs authorities could reject the declared value (transaction value method), if the truth or accuracy of the declaration is reasonably suspected (see Rule 10 A). In all such cases where the transaction value method is not applied, goods shall be valued by applying the subsequent methods in a strictly hierarchical order (see Rule 3). 10. In order to enable the Customs to determine the value by application of the most appropriate method, the importer is required to truthfully declare the full particulars concerning the goods under import. These include full description and specifications of the goods, basis of valuation applied, relationship with the supplier, conditions and restrictions if any attached with the sale, elements of cost not included in the invoice price, royalty and license fee payable in relation to the imported goods, etc. These details are to be declared in a special Valuation Declaration Format designed for the purpose. This is in addition to the entry declaration (Bill of Entry). In respect of EDI processing, the valuation declaration is integrated as a part of the Electronic Declaration. The importer should also provide copies of invoice, purchase contract and other supporting documents. Transaction Value method: 11. 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 defines “transaction value” as the price actually paid or payable for the goods when sold for export to India, adjusted in accordance with the provisions of Rule 9. 12. The price actually paid or payable should be adjusted to include all the costs and services (dutiable valuation factors) specified in sub-Rule 9 (1) (see below) if not already included in the invoice value. In short, the transaction value should be determined by suitably adjusting the declared value so as to include 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. Since the assessment is on CIF basis, the invoice value should be suitably adjusted to include the freight, insurance and handling charges as applicable under sub-Rule 9 (2). Valuation factors: 13. Valuation Factors (see Rule 9) are the various elements (dutiable factors), which should be added while determining the Customs value. The factors should be added to the extent they are not already included in the price actually paid or payable (invoice value). These dutiable factors are: •Commissions and brokerage, except buying commissions; •The cost of containers which are treated as being one for Customs purposes with the goods in question; •The cost of packing whether for labor or materials; •The value, apportioned as appropriate, of the following goods and services where supplied directly or indirectly by the buyer free of charge or at reduced cost for use in connection with the production and sale for export of the imported goods, to the extent that such value has not been included in the price actually paid or payable:- •material, components, parts and similar items incorporated in the imported goods; •tools, dies, moulds and similar items used in the production of the imported goods; •materials consumed in the imported goods; •engineering, developing, artwork, design work, and plans and sketches undertaken elsewhere than in the importing country and necessary for the production of imported goods; •Royalties and license fees related to goods being valued that the buyer must pay either directly or indirectly, as a condition of sale of the goods being valued, to the extent that such royalties and fees are not included in the price actually paid or payable; •The value of any part of the proceeds of any subsequent resale, disposal or use of the goods that accrues directly or indirectly to the seller; •Advance payments; •Freight charges up to the place of importation; •Loading, unloading and handling charges associated with transporting the goods; •Insurance.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 jitendra etikala answered over 2 years ago

The preamble to the ACV recognizes that, to the greatest extent possible. the basis of customs value should be the transaction value. However, in all, it provides for 6 methods of valuation to be applied in the following order: 1. The Transaction Value Method; 2. Comparative Value Method based on Transaction Value of Identical goods; 3. Comparative Value Method based on Transaction Value of Similar goods; 4. Deductive Value Method based on subsequent sale price in the importing country; 5. Computed Value Method based on cost of materials, fabrication and profit in the country of production; and 6. Fallback Method based on previous methods with greater flexibility.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 lochan answered over 2 years ago

The preamble to the ACV recognizes that, to the greatest extent possible. the basis of customs value should be the transaction value. However, in all, it provides for 6 methods of valuation to be applied in the following order: 1. The Transaction Value Method; 2. Comparative Value Method based on Transaction Value of Identical goods; 3. Comparative Value Method based on Transaction Value of Similar goods; 4. Deductive Value Method based on subsequent sale price in the importing country; 5. Computed Value Method based on cost of materials, fabrication and profit in the country of production; and 6. Fallback Method based on previous methods with greater flexibility. These methods require to be applied in the given sequence, starting with the first. Only when a method specified earlier in the sequence cannot be applied, can resource be taken on the next method in the sequence Thanks

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