Problem No. 16 A company imported from USA of CIF price is 3300 dollars. From the following information determine the assessable value and customs duty payable. a) Freight from America to Indian Airport 330 dollars b) Insurance 75 dollars c) Design and development charges paid to consultancy firm in USA 1000 dollars d) The company also spent an amount of % 6600 in India for installation of Machine. e) Exchange rate as notified by CBEC is = 58.50 = 1 dollar f) BCD payable is 10% g) IGST at 12% h) GST compensation cess at 4% i) Social welfare surcharge as applicable.Problem No. 16 A company imported from USA of CIF price is 3300 dollars. From the following information determine the assessable value and customs duty payable. a) b) c) d) e) f) 8) h) i) Freight from America to Indian Airport 330 dollars Insurance 75 dollars Design and development charges paid to consultancy firm in USA 1000 dollars The company also spent an amount of % 6600 in India for installation of Machine. Exchange rate as notified by CBEC is 58.50 = 1 dollar BCD payable is 10 % IGST at 12% GST compensation cess at 4% Social welfare surcharge as applicable. Calculation of FOB Value Particulars CIF Price Less: Freight 330$ Less: Insurance 755 FOB ValueDreicie meer Stree e Uae as Pee trier sid Pre Arce es) ena ele) Solution Calculation of Assessable Value (1 us $ = 58.5: cued Amount (%) FOB Value (2895 x 58.50) 1,69,358 Add: Air Freight (Note — 1) ( 330 X 58.50 ) pick [0-9 Add: Insurance (75 x 58.50) CL 7f Add: Design and Development Charges (1000 x 58.50) 58,500 pe CRC 2,51,550Soluti CONGNEG OO mN M ROU CU CROC Oue Diamar kL (a Tales EXC) Basic Custom duty (2,51,550 x 10%) Social Welfare Charges (25,155 x 10%) Sub Total Add: IGST (2,79,221 x 12%) Add: GST Compensation Cess (2,79,221 x 4%) Beet aCe Rett lig] eter N em Rec ing Pai eral 33,506 Be 5 3,23,896 Py Aol 33,506 Be 5 epee TTYProblem No. 17 Compute the assessable value and custom duty payable from the following information: I. I Ml. IV. Vv. Vi. Vil. Vill. F.0.B value of the machine — 8000 UK Pounds Freight paid (Air) — 2500 UK Pounds Design and development charges paid in UK — 500 UK pounds Commission paid to local agent at 2% Of FOB in Indian rupee Date of bill of entry — 24-10-2018 (Rate of BCD 20%, Exchange rate as notified by CBEC = % 68 per UK Pound) Date of entry inward 20-10-2018 (Rate of BCD 18%, Exchange rate notified by CBEC @ 70 per UK Pound) GST at 12% Social welfare surcharge as applicable Insurance charges actually paid but details not available @Problem No. 17 Compute the assessable value and custom duty payable from the following information: I. i MM. IV. Vv. Vi. Vil. F.0.B value of the machine — 8000 UK Pounds Freight paid (Air) — 2500 UK Pounds Design and development charges paid in UK — 500 UK pounds Commission paid to local agent at 2% Of FOB in Indian rupee Date of bill of entry — 24-10-2018 (Rate of BCD 20%, Exchange rate as notified by CBEC = & 68 per UK Pound) Date of entry inward 20-10-2018 (Rate of BCD 18%, Exchange rate notified by CBEC 70 per UK Pound) GST at 12% Vill. Social welfare surcharge as applicable Insurance charges actually paid but details not available Note :1 Calculation of Air Freight: 1. Actual freight =2500£ 2. 20% on FOB (8000 x 20%) = 1600 £ Freight Charges : 1600 £ ‘WEL eIK £ FOB Value (8000 x 68) 8,000 arti lc ed LE aw BA Insurance (8000 X 1.125%) ( 90 x 68 ) esign and development Charges (500 x 68 ) elling Commission ( 5,44,000 X 2%) Assessable ValueSoluti Calculation of total customs value and Custom Duty Payable Polar Pee Me Clee iad Pete AYE AEE Basic Custom duty (7,03,800 x 20%) pet) 1,40,760 Social Welfare Charges (1,40,760 x 10%) BR) 14,076 Sub Total EAA) bE EEL) Add: IGST (8,58,636 x 12%) eB Aci} BR Ri 1} BEA CE Rec m el saucy 9,61,672 2,57,872Problem No. 18 An importer has imported a machine from Japan at FOB cost of 13,00,000 yens other details as follows:- a)Freight from Japan to Indian port was 18,000 yens. b)Transit insurance charges were1.125% of FOB. c)Design and Development charges of 95,000yens were paid to a consultancy from Japan for design of machinery. d) Packing charges of 25,000 yens were extra charged. e) & 24,000 was spent in design cost on machine in India. e f) An amount of 95,000 yens was payable to Japanese manufacture towards charges were installation and commissioning machine in India. g) Rate of exchange as announced by RBI was 1yen=& 0.405. h) Rate of exchange announced by CBEC lyen= & 0.401. i) BCD at 20%, social welfare charges and IGST at 18%.Retinrs Calculation of Assessable Value (1 Yen ¥ = % 68) VERE ETS oe §| FOB Value (13,00,000 x 0.401) 13,00,000 UCC ig (18000 x 0.401 ) 18,000 Add: Insurance (13,00,000 X 1.125%) { 14625 x 0.401) bC R717 i Add: Design and development Charges (95000 x 0.40: EAU Add: Packing Charges (25,000 X 0.401) 25,000 ‘Amount (*) Eye Ret) 7,218 EF) ES AU} CR)Coyne Calculation of total customs value and Custom Duty Payable Assessable Value §| Basic Custom duty (5,82,503 x 20%) BT RU lire MO are Coe MMSE aa ty Add: IGST (7,10,653 x 18%} 5,82,503 pee 11,650 1,27,917 pete 11,650 1,27,917Problem 19 : Compute the duty payable under the Customs Act, 1962 for an imported equipment based on the following information: Assessable value of the imported equipment US$ 10,100. Date of Bill of Entry 25.4.2019. Basic customs duty on this date 15% and exchange rate notified by the Central Board of Excise and Customs US$ 1 = 65. Date of Entry inwards 21.4.2019. Basic customs duty on this date 16% and exchange rate notified by the Central Board of Excise and Customs US $ 1 =" 50. Social Welfare Surcharge @ 10% in terms of the Finance Act, 2018. Make suitable assumptions where required and show the relevant workings & round off your answer to the nearest Rupee Solution-16 Computation of Customs Duty Description Amount Rs ‘Total Customs Duty Assessable Value (10,100 x 65) 6,56,500 (BCD) Basic custom duty (6,56,500*.15) 98,475 98,475 Social Welfare Surcharge @ 10% of 98,475 9,847 9,847 Sub-total for IGST 7,64,822.5 IGST- on (7,64,822.5 x 18%) ( not given assumed as 18%) 1,37,668 ‘Total Customs Duty 2,45,990 Total duty rounded to 2,45,990 Note: different dates are given, date of entry notified exchange rate should be takenExample :2 An importer imported some goods for subsequent sale in India at $ 10,000 on assessable value basis. Relevant exchange rate and rate of duty are as follows: Particulars Exchange rate declared | Rate of Basic by the CBIC Customs Duty %56/USD 10% 2 58.75/USD 12% Date of submission of bill of entry 25th February 2018 Date of entry inwards granted fo the vessel Sth March 2018 Calculate Assessable value and Customs Duty in indian rupees? Answer: Relevant rate of duty for the imported goods is 12% (i.e. Date of submission of bill of entry or Date of entry inwards granted to the vessel whichever is later) Exchange Rate is € 58 per USD (Le. the rate of CBIC as on the date of submission of Bill of Entry by the importer) Assessable value = 5,80,000 (Le, USD 10,000 x @ 58) Basic Customs Duty = £69,600 (Le. € 5,80,000 x 12%) 10% Social Welfare Surcharge = 2 6,960 (i.e. % 69,600 x 10%) IGST (Assume 18%) 1,18,181 (Le., 18% on (580000 + 69600 + 6960) Total Customs Duty including IGST = 1,94,741/-Example: 3 An importer imported some goods. Entry inwards granted to the vessel on 7th February, and the goods were cleared from Chennai port for warehousing on &th February, after assessment. The Bill of Entry was presented on Ist February for warehousing. Assessable value was US $ 10,000. Assume that no additional duty is payable. The goods were warehoused at Chennai and were cleared from Chennai warehouse on 4th March. What is the duty payable while removing the goods from Chennai warehouse on 4th March? Exchange rates and rate of Customs Duties are as follows: Particulars Date | Exchange rate declared | Basic Customs by the CBIC Duty Date of submission of bill of entry for warehousing | Ist February &55/USD 10% Date of entry inwards granted to the vessel 7th February &59/USD 15% Date of clearance of goods from warehouse ‘4th March = 60/USD 12% Answer: Relevant rate of duty for the imported goods warehoused is 12% (i.e. Date of submission of sub-bill of entry) Exchange Rate is = 55 per USD (i.e. the rate of CBIC as on the date of submission of Bill of Entry by the importer) Assessable value =%5,50,000 (1.e. USD 10,000 x % 55) Basic Customs Duty =% 66,000 (i.e. & 5,50,000 x 12%) 10% Social Welfare Surcharge = 6,600 (i.e. ¥ 66,000 x 10%) Total Customs Duty (excluding IGST) * 72,600/-Example: 4 Compute export duty from the following data: (FOB price of goods: US $ 1.00.000 (i) Shipping bill presented electronically on 26-02-2018 (ii) Proper officer passed order permitting clearance and loading of goods for export on 01-03-2018. (iv) Rate of exchange and rate of export duty are as under Duly Rate of Exchange _| Rate of Export (On 26-02-2018 TUS $865 Onor-os-2018 | luss=rss | (¥) Rate of exchange is notified for export by Central Board of Excise and Customs (Make suitable assumptions wherever required and show the workings) Answer: Particulars Valve in? Remarks FOB 65,00.000| _1,00,000 x 865 Customs Duty 5.20,.000] _%65 lakhs x 8% Note: Export duty does not carry Social Welfare Surcharge.Particulars Relevant date Goods entered for home | Date of presentation of bill of entry Gonssmion under section oR Date of entry inwards of the vessel/anival of the aircraft or (vehicle w.e.f. 6-8- 2014) whichever is later Goods cleared from | Date of presentation of bill of entry for home consumption. warehouse under section 68. Other goods Date of payment of dutyBasic Customs Duty (BCD) on imported goods Basic Customs Duty U/s 12 Rate of duty at the time of Rate of duty at the time of entry submission of Bll of Entry inwards granted to the vesse! Ls Whichever dates later }#— Exchange rate for imported goods e Exchange of CBE&C More than one exchange of CBE&C + Exchange of CBE&C as on the date of submission of Bill of Entry