Valuation for Customs Duty

Customs duty is payable as a % of value

Often called as Assessable value (AV) or
Customs Value (CV).
This value may be
Value defined u/s 14(1) of Customs Act
Tariff Value defined u/s 14(2) of Customs
Act

Tariff Value:- CBEC may fix value

of any class of imported goods. Duty
is payable as a % of this value (not
practiced often)
Customs Value 14(1):- Fixed as per
Sec 14 (1) or this value is normally
used for calculation of CD. It is often
called as AV or CV.

Value for the purpose of

customs duty
Price

at which such goods or similar goods are

ordinarily sold.
Price should be in the course of international trade.
Price should be the sole consideration.
Rate of exchange as on the date of presentation of
bill of entry as fixed by CBEC by notification should
be considered.
Seller and buyer have interest in each other
business.
Custom value shall always be a Deemed Value
finded as per sec 14(1).

CUSTOM VALUE INCLUDES

Commission

and brokerage paid to local agents

and agents of
exporter except buying
commission.(agent of importer).
Packing cost is to be included except cost of
durable and reusable containers.
Value of goods supplied by buyer.
Value of engineering, development, art work,
design work and plans, sketches undertaken by
buyer which is necessary for production of
imported goods is taxable only if it is done outside
India.

 Royalties

and license fee if paid separately.

Value of subsequent re sale if payable to foreign
supplier, its cost is included in the customs value
Any other payment made by buyer to seller as a
condition of sale.
Cost of transportation from exporting country to
Indian port should be included .i.e.(CIF value
shall be considered)
Cost of unloading and handling associated with
delivery is taxable
If goods are imported by air,maximum of 20% of FOB
value shall be considered.
Cost of transportation within India not to be
considered.

Insurance

charges: Actual or if not

ascertainable, 1.125%of FOB value.

Landing

charges : Unloading and

landing charges 1% of CIF value or
actual landing charges.

CIF

value
+insurance.

=FOB

price+freight

Items to be excluded from

Assessable Value
Charges

of errection, testing,
assembly etc. are excluded from
AV

Bank

charges paid for the

services rendered by the banker
should not be included