Thursday, 26 December 2019

Unit 9: Valuation of Custom Goods

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Unit 9: Valuation of Custom Goods


When the transaction value is not accepted by Customs, the Agreement lays down five methods for establishing value.

In determining value on the basis of these methods, Customs is required to consult the importers and take their views into account.

The detailed WTO rules on the valuation of goods for customs purposes are contained in the Agreement on Customs Valuation (full title: Agreement on Implementation of Article VII of GATT 1994).

The Agreement’s valuation system is based on simple and equitable criteria that take commercial practices into account.

As a general rule, the Agreement visualizes that where a transaction value is not accepted, the value should be determined by using the above standards on the basis of the information available within the country of importation.

Valuation in Customs Act has to be done as per valuation rules.

These rules are based on ‘WTO Valuation Agreement’ (Earlier termed as GATT Valuation Code).

The rate of exchange applicable for conversion of foreign currency in Indian currency is the rate in force on the date of presentation of the Bill Entry under Section 46.

Such exchange rates are notified by the  from time to time by notifications issued under clause a (i) of Section



Computed Value: It is determined by adding to the cost of producing the goods being valued “an amount for profit and general expenses equal to that usually reflected in sales of goods of the same class or kind as the goods being valued which are made by producers in the country of exportation for export to the country of importation.

Customs Duty: It is payable as a percentage of ‘Value’ often called ‘Assessable Value’ or ‘Customs Value’.

Deductive Value: It is determined on the basis of the unit sales price in the domestic market of the imported goods being valued or of identical or similar goods after making deductions for such elements as profits, customs duties.

Tariff: A tariff is a tax on imports or exports.

Money collected under a tariff is called a duty or customs duty.

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