1. Value of Material (At Ex-Factory Price) XXX
2. Carriage, Freight, Insurance upto the Port of Shipment in the Exporter’s
3.Charges for Loading on to the ship at the shipping Port in the exporter’s
4. Value of Goods and tooling supplied by the buyer . XXX
FOB (Free on Board) XXXX
ADD: If not included in the above.
1.Commission and brokerage(except buying commission) XXX
2.Packing Cost ( except cost of durable and returnable packing) XXX
3. Cost of engineering, development and plan or sketches XXX
(Undertaken outside India)
4.Royalties and Licences fees XXX
5.Value of subsequent resale (if payable to foreign supplier) XXX
6.Cost of freight and Insurance upto the place of importation XXX
• Cost of Freight – If not specified : @ 20% of FOB
(Cost of Actual Air Freight Exceeds @ 20% FOB, only @ 20% FOB Price will be
• Insurance : If not Specified @ 1.125% fob
7. Ship Demurrage charges on chartered vessels, Lighterage or Barge charges XXX
LESS: If Included in the above:
1.Duties and Taxes in India XXX
2.Cost of Erection Charges in India XXX
CIF Value(Cost Insurance Freight) XXXX
ADD: Loading and Unloading Charges @ 1% on cif XX
ASSESSABLE VALUE (AV) XXXXX
1. Buying Commission : Fees paid by an importer to his agent for the service of – Representing him abroad in the purchase of goods being valued .
2.Any expenditure like right to reproduce the imported goods in India – Not to be added .
3. Apportioning the cost of tools are not immediately consumed by the importer
4. Demurrage charges payable to port trust authorities for delay in clearing of goods – not to be added to the transaction value.
5. Exchange Rate :
Considered the Exchange rate of ‘ CBE & C’ for finding the assessable value in Indian Rupees .
a. Exchange rate of CBE&C b.More than one CBE &C Exchange rate of CBE & C as on the date of Submission of Bill of Entry.6. Rate of determination of Basic Customs Duty.
Basic Customs Duty u/s 12
a. Rate of Duty at the time of Submission
b. Rate of Duty at the time of Bill of entry. entry inwards granted to the vessel.
whichever is LATER.
Eligibility of CENVAT credit :
a. If the importer is Manufacturer :
Eligible to avail the CENVAT credit of the following
1. Additional Customs Duty ( CVD)
2. Special Additional Customs Duty(SPCVD)
b. If the importer is service provide
Additional Customs Duty (CVD)
c. If the importer is trader – who sells imported goods in India after charging VAT
Special Additional Customs Duty ( SPCVD)
Rule 10 : Cost of services
The following Shall be added to the invoice price ( i.e FOB value) to determine the transaction value of imported goods.
1. Commission and Brokerage ( except buying commission)
2. Packing Cost ( Except Cost of durable and returnable packing)
3. Cost of engineering, development and plan or sketches (undertaken outside India)
4.Royalties and Licence fees
5. Cost of subsequent re-sale if payable to foreign supplier
6. Cost of freight and insurance upto the place of importation
Cost of freight – if not specified @ 20% of FOB
Insurance – If not specified @ 1.125% of FOB
7. Ship demurrage charges on chartered vessels, Lighterage or Barge Charges.
The following shall not be added to the Invoice price (i.e FOB value) to determine the transaction value for imported goods.
1. Duties and Taxes in India.
2. Cost of Erection Charges in India .
3. Cost of Transport and Insurance from port to factory of importer in India.
4. Cost of development Charges in connection with imported machinery.
5. Post demurrage charges and unloading charges in India.
6. Any other charges incurred after importation ( post shipment charges unless such post shipment charges are precondition for importation).
IMPORTANT POINTS FOR IMPORTED GOODS:
1. Where the cost of insurance and cost of transportation are not ascertainable
a. Cost of transportation is not ascertainable – 20% of FOB value .
b. Cost of insurance is not ascertainable – 1.125% of FOB Value.
c. Landing Charges – 1% of CIF Value.
d. Cost of Freight if the goods are imported by AIR – Restricted to 20% of FOB Value
i.e. Actual Air Freight OR 20% of FOB Value
Whichever is less.
2. Cost of Freight in case of goods imported by SEA
Incase of goods imported by sea , stuffed in a container for clearance in ICD (Inland Container Depot) or container Freight station ( CFS) – Cost of Freight from the port of entry to ICD / CFS / Shall not be included in the cost of transport.
3. FOB VALUE:
Cost at the factory of exporter
Carriage /Freight /Insurance upto the port of shipment in the exporter’s Country
Charges for loading onto the ship at the shipping port.
4. Exchange rate of CBE&C is relevant.
if this rate is not given – Take the Govt of India rate
5. Charges for bringing the goods from outer anchorage to jetty is known as – Barging / Lighterage or Barge charges – Included in the Assessable Value.
6.Ship demurrage on Charted vessels.
Demurrage Charges is payable when ship was not unloaded within the specified time – Included in the Assessable Value.
7. Cost of Post shipment expenditure
a. Precondition for such import b. Not precondition for Importation
Addable to the Assessable Value Not addable to AV
8.Transportation of goods from port of entry to inland container depot ( ICD) – Not addable to AV.
9.Importer imports machinery as well as accessories:
Classified under two different headings with different rate of duties.
a. Accessories are essential for Machinery. b. accessories are not essential for operation machinery.
Rate of Duty Applicable for machinery Rate of duties applies separately as is also applicable to the accessories. applicable to them.
Note: Common expenditure – Apportion in the ration of value of accessories and machinery.
10. Additional Customs Duty ( CVD)
Any article imported into India – Liable to duty ( In addition to BCD ) equal to the EXCISE duty for the time being leviable on the like article if production or manufacture in India.
CVD – cannot be levied , if exemption from CED is based on
a. Goods manufactured by SSI Unit or
b.Goods manufactured without aid of power.
• CVD can be levied – only when the imported manufactured goods .
• it means CVD can be levied – only if goods are obtained by a process of manufacture.
• If the goods manufactured in India – are exempt from EXCISE Duty – No CVD.
• W.E.F 17.03.2012 CVD is equal to Basic Excise Duty ( Excluding Excise Duty )
• If imported goods attract Excise duty in India as per Section 4A of Central Excise Act – CVD will be calculated as per MRP Basis only.
11. Persons shall be deemed to be “Related” , If one of them directly or indirectly controls the other.
Control : is Established when one enterprise holds atleast 51% of the equity share holding of the other company.
12.According to explanation to Rule 10(1) – Any Royalties / Licence fees / any other payment made for a process – which carried out on the imported goods after importation there off – Shall be included in the AV of imported goods
a. If the same is related to the imported goods and it is paid as condition of sale.
13. Additional Customs Duty :
Excise duty payable as per tariff is 14%
There is an excise exemption notification which exempts the duty as in excess of 10% – Excise Duty rate has to be considered after considering excise exemption notification i.e. Rate of CVD = 10%.
14. Where FOB Value , Cost of Insurance and Cost of Transportation are not ascertainable:
a. Cost of Transport ( i.e. Freight not known )
= 20% X (FOB Value + Cost of Insurance )
Remarks : CIF Value X 20/120.
b. Insurance ( Not Known)
= 1.125% X (FOB Value + Cost of Transport)
Remarks: CIF Value X 1.125/101.125
c. FOB Value = CIF Value – Cost of Transport – Cost of Insurance .
15. U/S 15 date for Determination of the rate of duty and tariff valuation of imported goods.
a. Goods entered for ” Home consumption ” u/s 46 – Dated on which bill of entry in respect of such goods is presented under that section.
b. Goods cleared form a warehouse u/s 68 – Dated on which a bill of entry in respect of such goods is presented under that section.
c. Any other goods – Dated of payment of duty .