Customs Duty
Levy and exemptions of duty

Terms to understand
Customs duty act __1962______
CBIC – Central Board of Indirect Taxation
Customs is levied by ___________ Government
GST has no impact on Basic Customs duty, Education cess, Anti
dumpling duty,Safeguard
Additional duties like Countervailing duty and special additional
duty of customs would be replaced with levy of IGST

Important definitions
Baggage: unaccompanied baggage but does not include motor
vehicles
Beneficial owner: It means any person on whose behalf the
goods are being imported or exported
Conveyance --- a vessel, aircraft and a vehicle
Customs Area- place where imported or exported goods are
kept
Customs Port- inland container depot
Customs Station – Customs port, airport or land station

Important terms
• Nautical mile = 1853 km
• Indian Exclusive Economic Zone - 200 nm
• Levy
Levy •Declaration of
liability
Assessment
•Quantification
of the amount
payable
Collection
• Tax
collected

4
Introduction Charging Section
Determination of
Taxable Event
Clearance for
Home
Consumption and
Warehousing
Date for
Determining the
Rate Of Duty and
Tariff Valuation
Duty Liability in
Certain Special
Circumstances
Date for
Determining the
Rate Of Duty and
Tariff Valuation
Goods Derelict,
Wreck
No Duty on
Pilfered Goods
Remission of Duty
on Goods Lost,
Destroyed or
Abandoned
Abatement of Duty
on Damaged or
Deteriorated
Goods
Denaturing or
Mutilation of
Goods
Exemption From
Customs Duty
Imported Goods
Used for Inward
Processing Of
Goods
Re-imported
Goods Used for
Outward
Processing
Availment of
Exemptions
Procedure and
Conditions

Introduction
The liability towards customs duty is broadly based upon the following 3 factors:
The goods, the point
and the circumstances
under which the
customs duty becomes
leviable
The procedure,
mechanism and
the
the
organization for determining
the amount of customs duty
and collection thereof
The exemption to the levy either
on grounds of morality or equity
or as a result of the discretionary
planning tax structure
powers vested in the
Government as a tool for
and
control of economic growth of
the country
6

7
Charging Section – Sec 12
This is the charging section of the Act
Duties of customs shall be levied on goods. However the levy is subject to the provisions with respect to
Section 13 - No duty on pilfered goods
Section 22 – Reduced duty on damaged goods
Section 23 – Remission of duty on destroyed goods
The goods shall be such as are imported or exported to or from India
The duty shall be charged at such rates as may be specified under the Customs Tariff Act, 1975
Government goods shall be treated at par with non-Governmental goods for the purposes of levy of customs duty
Indian Navy,
Equipmentsrequired by police
Ministry of Defence,
Coastal Guard
are fully exempt from customs
duty by specific notifications
However, imports by

8
Charge on goods
The charge of customs duty is considered to be on the goods and not on the
person importing them or paying the duty
Taxable event
Importation or exportation of goods into or out of India is the taxable event for payment of the duty of customs
Import means bringing into India from a place outside India
Export means taking out of India to a place outside India
Analysis of
Section 12

9
The main test for determining the taxable event is the happening of the event on which the charge is affixed
Imports
In case of goods cleared for home consumption
Import of goods will commence when they cross the territorial waters and is completed when they become
part of the mass of goods within the country
The taxable event being reached at the time when the goods reach the customs area and Bill of Entry for
home consumption is filed
In case of goods cleared for warehousing
The custom barriers would be crossed when they are sought to be taken out of
customs and brought to the mass of goods in the country
Exports
Export of goods is complete when the goods cross the territorial waters of India
Determination of Taxable Event

In case of clearance for home consumption, the customs duty on import of the goods has been
discharged and the goods are cleared for utilization or consumption
However, the goods may instead of being cleared for home consumption be deposited in warehouse
and cleared at a later time
When the goods are deposited in the warehouse the collection of customs duty will be deferred till
such goods are cleared for home consumption
In case of clearance for warehousing, the importer shall execute a bond with the Government binding
himself for a sum equal to twice the amount of duty assessed on the goods at the time of import
Distinction between Clearance for Home
Consumption
10
and Clearance for Warehousing

Case
Date for Determining the Rate Of Duty
andTariff Valuation – Sec 15
11
Goods entered for home consumption
Determination Date
Date of presentation of bill of entry
OR
Date of entry inwards of the vessel/arrival of the
aircraft or vehicle,
whichever is later.
Goods cleared for home consumption
from the warehouse
Date on which a bill of entry for home consumption in
respect of such goods is presented
Any other goods Date of payment of duty

Duty Liability in Certain Special Circumstances
Re-importation of goods produced/manufactured in India – Sec 20
If the manufactured goods are re-imported (for any purpose) into India after exporting from India
Such goods shall be liable to duty
Goods manufactured or produced in India, which are exported and thereafter re-
imported are treated on par with other goods, which are otherwise imported
However, there are certain concessions for re-importation of goods produced/manufactured in India:
Concessional duty payable in case of re-importation of goods exported for repairs or exported under duty drawback* (Sec 25A)
Exemption to re-import of goods and parts thereof for repairs, reconditioning, reprocessing, remaking or similar other process (Sec 25B)
* Duty drawback is the refund of duty on re-export of duty-paid goods or drawback on imported
goods used in the manufacture of goods which are exported

Conditions
13
Conditions to be satisfied for claiming the Concessional duty payable in case of re-importation
of goods exported for repairs or exported under duty drawback are:
Concessions would not be applicable if
Re-imported goods had been
exported by EOU or a unit in
FTP
Re-imported goods had been
exported from a
public/private warehouse
Re-imported goods which fall under
Fourth schedule to the Central Excise Act,
1944 (tobacco and tobacco substitues and
mineral products)
The time limit for re-importation is 3 years which is extendable on sufficient cause upto 2 years
The exported goods and the re-imported goods must be the same The
ownership of the goods should also not have changed

S. No. Particulars
Time-limit for re-
importation from the
date of exportation
Other conditions to be satisfied (only for
Point No. 1)
1
Goods manufactured in India and re-
imported for repairs or for
reconditioning other than the specified
goods (specified in Notification No.
60/2018 – Customs – electrical
equipments)
3 years
(a) Goods must be re-exported within six
months (extendable till one year) of the
date of re- importation.
In case of export to
Nepal, such time-limit is
10 years.
(b) The AC/DC of Customs is satisfied as
regards identity of the goods.
2
Goods manufactured in India and re-
imported for
1 year
(c) The importer at the time of importation
executes a bond with customs authority to
export the goods after repairs or pay the
duties in case of failure
(a) Reprocessing
(b) Refining
(c) Re-making
Contd.
14
Conditions to be satisfied for claiming exemption to re-import of goods and parts
thereof for repairs, reconditioning, reprocessing, remaking or similar other process

16
Derelict Refers to any cargo, vessel, etc. abandoned in the sea with no hope of recovery
Jetsam Refers to goods jettisoned* from the vessel to save her from sinking
Flotsam Jettisoned goods which continue floating in the sea
Refers to cargo or vessel or any property which are cast ashore by tides after ship wreck
Wreck
-All goods, derelict, jetsam, flotsam and wreck brought or coming into India,
-Shall be dealt with as if they were imported into India, -
-Unless it be shown to the satisfaction of the proper officer that they are entitled to be admitted duty-free under this Act
The concept of ‘goods brought into India’ is not confined to goods, which are intentionally brought into
India, but also extends to derelict, jetsam, flotsam and wreck brought or coming into India
This implies that apart from goods which are normally imported in the course of international
trade, flotsam, and jetsam, which are washed ashore and derelict and wreck brought into India
out of compulsion are also treated on par with trade goods
Goods Derelict,
Wreck – Sec 21
* throw or drop (something) from an aircraft or ship

17
However, where such goods are restored to the importer after pilferage, the importer becomes liable to duty
the importer shall not be liable to pay the duty leviable on such goods.
If any imported goods are pilfered
after the unloading thereof and before the proper officer has made an
order for clearance for home consumption or deposit in a warehouse,
‘pilfer’ means “to steal, especially in small quantities; petty theft”. Therefore, the term does not include loss of total package
No Duty on Pilfered Goods –
Sec 13
In order to claim pilferage the following circumstances should exist:
• there should be evidence of tampering with the packages
• there should be blank space for the missing articles in the package; and
• the missing articles should be unit articles [and not part articles]

18
the AC/DC of Customs shall remit the duty on such goods
at any time before clearance for home consumption,
any imported goods have been lost (otherwise than as a result of pilferage) or destroyed,
Where it is shown to the satisfaction of the AC/DC of Customs that
However, the owner of any such imported goods shall not be allowed to relinquish his title to such goods regarding
whichan offence appears to have been committed under this Act or any other law for the time being in force.
he shall not be liable to pay the duty thereon.
Relinquish* his title to the goods and thereupon
at any time before an order for clearance of goods for home consumption or an order
for permitting the deposit of goods in a warehouse has been made,
The owner of any imported goods may,
Lost or
Destroyed
Abandonment
*Relinquish - means to give over the possession or control of, to leave off
Remission of Duty on Goods Lost, Destroyed or
Abandoned –Sec23

19
Goods damaged/deteriorated
before or duringunloading
by accident after unloading but before examination
for assessment by the customs authorities Provided such accident is not
due to any wilful act, negligence
or default of the importer, his
employee or agent
by accident in warehouse before their actual
clearance from such warehouse
Abatement is available if the goods are damaged/deteriorated under any of the following circumstances:
• Damage denotes physical damage to the
goods. This implies that the goods are
not fit to be used for the purpose for
which they are meant.
• Deterioration is reduction in quality of
goods due to natural causes
Amount of duty chargeable after abatement
= Duty on goods before
Damage/Deterioration
Value of damaged / deteriorated goods
Value of goods before damage / deterioration
*
• Value ascertained by Customs Officer
Or
• If not, then sale proceeds from the sale
made by the customs officer by public
auction/tender or any other manner
agreed by importer
Abatement of Duty on Damaged or Deteriorated Goods–
Sec 22

General exemption
goods of any specified description from the whole or any part of duty
of customs leviable thereon
as may be specified in the notification,
exempt generally either absolutely or subject to such conditions (to
be fulfilled before or after clearance)
it may, by notification in the Official Gazette,
If the CG is satisfied that it is necessary in the public interest so to do,
under circumstances of an exceptional
nature to be stated in such order
exempt from payment of duty,
it may, by special order in each case,
If the CG is satisfied that it is necessary in
the public interest so to do,
No duty shall be collected if the amount of duty leviable is equal to, or less than, Rs 100
Special exemption
Exemption From Customs
Duty – Sec 25
19

Usedfor Inward
Processing Of Goods –
Sec 25A
20
Where the Central Government is satisfied that it is necessary in the public interest, it may, by
notification, exempt such of the goods which are imported for the purposes of repair, further
processing or manufacture, as may be specified therein, from the whole or any part of duty of customs
Conditions
• The goods shall be re-exported after such repair, further processing or
manufacture, as the case may be, within a period of 1 year from the
date on which the order for clearance of the imported goods is made;
• The imported goods are identifiable in the export goods; and
• Such other conditions as may be specified in that notification
No goods are notified yet by the Government

Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification,
exempt such of the goods which are re-imported after being exported for the purposes of repair, further
processing or manufacture, as may be specified therein, from the whole or any part of duty of customs
Conditions
• The goods shall be re-imported into India after such repair, further
processing or manufacture, as the case may be, within a period of 1 year
from the date on which the order permitting clearance for export is made;
• The exported goods are identifiable in the re-imported goods; and
• Such other conditions as may be specified in that notification
Used for
Outward Processing –
Sec 25B
21
No goods are notified yet by the Government

Application
Applies to an importer, who intends to avail
- the benefit of an exemption under Sec 25 (Sec 25 empowers CG to exempt goods in public interest)
-And where the benefit of such exemption is dependent upon the use of imported goods for the
purpose of manufacture of any commodity or provision of output service
Information about intent to avail benefit of exemption notification – Rule 4
An importer who intends to avail the benefit of the above mentioned exemption shall be required to provide the
following information to the Deputy Commissioner (DC) of Customs or, Assistant Commissioner (AC) of Customs
The name and address of the manufacturer
The goods produced at his manufacturing facility
The nature and description of imported goods used in the
manufacture of goods or providing an output service
Goods at Concessional
Rate of Duty) Rules,
2017
22

Procedure - Rule 5 The importer shall provide
• In duplicate, to the AC/ DC of Customs (respective jurisdiction) where the imported goods shall be put to use for
manufacture of goods or for rendering output service, the estimated quantity and value of the goods to be imported,
particulars of the exemption notification applicable on such import and the port of import in respect of a particular
consignment for a period not exceeding 1 year
• The above information to be provided In one set, to the AC/ DC of Customs at the Custom Station of importation
The importer shall submit a continuity bond with such surety or security as deemed appropriate by the AC/ DC of Customs
(respective jurisdiction)
The AC/ DC of Customs (respective jurisdiction), shall forward one copy of information received from the importer to the AC/ DC
of Customs at the Custom Station of importation
After scrutiny, the AC/DC of Customs at the Custom Station of importation shall allow the benefit of the exemption notification
to the importer
Proce
dure
23

The importer shall intimate within 2 days of such receipt to the jurisdictional Customs Officer
The importer shall maintain an account in such manner so as to clearly indicate the quantity and value of goods
imported, the quantity of imported goods consumed in accordance with provisions of the exemption notification such as
quantity of goods re-exported, the quantity remaining in stock
The importer who has availed the benefit of an exemption notification shall submit a quarterly return (format prescribed in
the rules) by the 10th day of the following quarter
Information Regarding
Receipt of Imported Goods
and Maintenance of Records
- Rule 6
24

Other
Conditions
25
-The importer who availed exemption may re-export the unutilised or defective imported goods,
-Within 6 months from the date of import,
-With the permission of the jurisdictional AC/DC of Customs (respective jurisdiction)
Rule 7
Rule 8
In case of failure to utlise the goods imported under exemption in accordance with conditions in the
exemption notification or failure to re-export as per rule 7, the jurisdictional AC/DC of Customs
(respective jurisdiction) shall initiate recovery proceeding for the leviable amount of customs duty

Presentation
Schema
Introduction Technical Terms Relating to
Valuation
Valuation of Goods under
Customs Act, 1962
Customs Valuation
(Determination of Value
Of Imported Goods)
Rules, 2007
Customs Valuation
(Determination of Value Of
Export Goods) Rules, 2007
Date For Determination
of Rate of Duty and Tariff
Value

Introduction
Customs duty is an indirect tax
It is a tax on the goods and it is not a tax on the person having or
owning the goods
The manner in which duties of customs are charged on goods imported into India (import duty) or goods
exported from India (export duty) is basically either by way of
Specific Duty
Ad valorem
Based on the quantity of the
goods e.g.: Rs. 1000 per metric
tone of steel
or
Expressed as percentage of the
value of the goods for e.g.: 40%
ad valorem
Appropriate conversion dates shall be used accordingly for exported and imported goods

Technical Terms Relating to Valuation
Ex Factory Price
• The price of the goods at the factory gate
• It includes cost of production and manufacturer’s margin of profit
• The cost at which the export goods are delivered alongside the ship, ready for
shipment
• It includes ex-factory +local freight + local taxes
Free Alongside (FAS)
• FOB means the stage at which the goods are placed on board the conveyance
carrying the vessel
• It can be said to include FAS + loading charges + export duty cess
Free on Board (FOB)
The cost at which the goods are delivered at the Indian port (F.O.B. +Insurance +
Freight)
Cost Insurance
Freight (CIF)

Valuation under Customs Act, 1962

Transaction Value
 As per Sec 14, the value of the imported goods and export goods shall be the transaction
value of such goods
 Transaction value refers to the price actually paid or payable for the supply of goods and
or services where the supplier and the recipient are not related and price is the sole
consideration for the supply
The transaction value shall be
In case of export goods
price is the sole consideration for the sale
where the buyer and seller of the goods are not
related and
for delivery at the time and place of exportation
the price actually paid or payable for the goods when
sold for export from India
In case of imported goods
price is the sole consideration for the sale
where the buyer and seller of the goods are not related
and
for delivery at the time and place of importation
the price actually paid or payable for the goods when sold
for export to India
However, in both the cases further conditions may be specified in the rules in this behalf

Specific Consideration for Imported Goods
In case of Imported Goods, such transaction value shall also include in addition to the price as aforesaid,
any amount paid or payable for costs and services, including:
Commissions
and brokerage engineering design work
royalties and
licence fees
costs of
transportation insurance
loading unloading
handling
charges
Further conditions may be specified in the rules (discussed subsequently). Such rules may provide for
The circumstances in which the buyer and the seller shall be deemed to be related
The manner of determination of value in respect of goods when there is no sale, or the buyer and
the seller are related, or price is not the sole consideration for the sale or in any other case
The manner of acceptance or rejection of value declared by the importer or exporter, where the
Proper Officer has reason to doubt the truth or accuracy of such value, and determination of
value for the purposes of this section
Proper Officer
The officer of customs who is assigned those functions by the Board or the Principal Commissioner of
Customs or Commissioner of Customs

Related Party
Persons shall be deemed to be related if
they are officers or directors of one another’s businesses
they are legally recognised partners in business
they are employer and employee
any person directly or indirectly owns, controls or holds 5 % or more of the outstanding
voting stock or shares of both of them
one of them directly or indirectly controls the other
both of them are directly or indirectly controlled by a third person
together they directly or indirectly control a third person
they are members of the same family

Conversion
Dates
The conversion in value shall be done with reference to the rate of exchange
prevalent on the date of filing bill of entry
Imported
Goods
The conversion in value shall be done with reference to the rate of
exchange prevalent on the date of filing shipping bill (vessel or aircraft) or
bill of export (vehicle)
Exported
Goods

Currency of Conversion
Rate
The rate of exchange is notified by three agencies
Central Board of Indirect taxes and
Customs (CBIC)[Board]
Dealers’
Reserve Bank of India
Foreign Exchange
Association of India
However for the purpose of customs valuation, rate of exchange
means the rate of exchange
determined by the Board or
ascertained in such manner as the
Board may direct

The CBIC notifies the rates periodically (generally every fortnight)
There are separate rates for imported goods (selling rate) and export goods (buying rate)
A declaration by an importer of the exact nature, precise quantity and value of goods that have
landed
The legal document filed with the customs department by an exporter for allowing shipment
Bill of Entry
Bill of Export/
Shipping bill

(Determination of
Value of
Imported Goods)
Rules, 2007

Overview of Rules
Rule 3
Rule 4
Rule 5
Rule 7
Rule 8
Rule 9
Cost and Services Rule 10
Note: The above rules shall be followed in chronological order from Rule 3 to 10
Transaction Value of Identical Goods
Determination of the Method of Valuation
Deductive Value
Computed Value
Residual Method
Rule 6
Transaction Value of Similar Goods
Determination of value where value cannot be
determined under Rules 3,4 and 5

Determination of the Method of Valuation – Rule 3
Subject to rule 10, the value of imported goods shall always be the transaction value
Value of imported goods shall be accepted provided that
there are no restrictions as to the disposition or use of the goods by the buyer
the sale or price is not subject to condition or consideration for which a value cannot be
determined in respect of the goods being valued
no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will
accrue directly or indirectly to the seller
the buyer and seller are not related, or where the buyer and seller are related, that transaction
value is acceptable for customs purposes
Where the buyer and seller are related, the transaction value shall be accepted if the imported goods
indicate that the relationship did not influence the price
If the relationship influences the price, Rule 4 to Rule 10 shall be applied in a sequential manner

Transaction Value of Identical Goods – Rule 4
If transaction value of imported goods is not determinable, the transaction value of identical goods sold
for export to India and imported at or about the same time as the goods being valued, shall be
considered
Where the costs and charges are included in the transaction value of identical goods, an adjustment shall
be made, if there are significant differences in such costs and charges due to differences in distances and
means of transport
which are same in all respects, including physical characteristics, quality and reputation as the goods being
valued except for minor differences in appearance
produced in the country in which the goods being valued were produced
Identical
Goods
produced by the same person who produced the goods
shall not include imported goods where engineering, development undertaken in India were completed
directly or indirectly on these imported goods free of charge or at a reduced cost
A condition for adjustment shall be made only on the basis of demonstrated evidence that clearly establishes
the reasonableness and accuracy of the adjustment
e.g. valid price lists containing prices referring to different levels or different quantities

Transaction Value of Similar Goods – Rule 5
If the transaction value of identical goods is not available, the transaction value shall be considered of
similar goods sold for export to India and imported at or about the same time as the goods being valued
The Proper Officer of customs shall, wherever possible, use a sale of similar goods at the same
commercial level and in substantially the same quantities as the goods being valued.
which although not alike in all respects, have like characteristics and like component materials
which enable them to perform the same functions and to be commercially interchangeable with
the goods being valued having regard to the quality, reputation and the existence of trade mark
produced in the country in which the goods being valued were produced
produced by the same person who produced the goods being valued, or where no such goods are
available, goods produced by a different person,
Similar
Goods

Deductive Value – Rule 7
Range
of
Quantit
y
Un
it
Pric
e
Number of Sales
Aggregate
Quantit
y sold
1-10 units 100
10 time sales
of 5 units
65
5 time sales
of 3
units
11-25 units 95
5 time sales
of 11 units
55
Rule 7 shall be applied only if value of imported goods cannot be determined under Rule 3, 4 and 5 –
Rule 6.
In case of imported goods or Identical or Similar goods being valued in the past
The value of imported goods shall be based on the unit price at which the imported goods or
identical or similar imported goods are sold in the greatest aggregate quantity to persons who
are not related to the sellers in India
Illustration
The aggregate quantity of units sold is 80,
whereby the unit price is 90, thus, 90 shall
be considered as transaction value

Contd
.
In case past data is not available for neither the imported goods nor identical goods nor similar goods
The unit price at which the imported goods or identical or similar imported goods are sold in India in similar
condition, at the earliest date* after importation but before the expiry of 90 days after such importation
If the above is not possible, then, the value shall be based on the unit price at which the
imported goods, after further processing, are sold in the greatest aggregate quantity to persons
who are not related to the seller in India
If the value cannot be determined under this rule, then Rule 8 shall apply
*earliest date shall be the date by which sales of the imported goods or identical or similar imported, goods are made
sufficient quantity to establish the unit price

Computed Value – Rule 8
The value of imported goods shall be based on the sum of
the cost or value of materials and fabrication or other processing employed in
producing the imported goods
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 India
the cost or value of all other expenses

Residual Method – Rule
9
Rule 9 shall apply only if the value of imported goods cannot be determined under the provisions of any
of the preceding rules
The value shall be determined using reasonable means consistent with the principles and general
provisions of the rules and on the basis of data available in India
• The value determined shall not exceed the price at which such or like goods are ordinarily sold or
offered for sale for delivery
• the seller or buyer shall have no interest in the business of other and price is the sole consideration
for the sale or offer for sale
No value shall be determined under the provisions of’ this rule on the basis of
the selling price in India of the goods produced in India
a system which provides for the acceptance for customs purposes of the highest of
the two alternative values
the price of the goods in the domestic market of the country of exportation
the cost of production other than computed values which have been determined
for identical or similar goods
the price of the goods for the export to a country other than India
minimum customs values
arbitrary or fictitious values

Cost and Services – Rule 10
In determining the transaction value, there shall be added to the price actually paid or payable for the
imported goods:
(a) the following to the extent they are incurred by the buyer namely:-
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 labour or materials
(b) The following, if used in production of or incorporated in the imported goods
materials, 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 production of the imported goods
engineering, development, art work, design work, and plans and sketches undertaken elsewhere than in
India and necessary for the production of the imported goods

Contd
.
(c) royalties and licence fees related to the imported goods
(d) The value of proceeds of any subsequent resale of the imported goods that accrues to the seller
(e) all other payments actually made or to be made as a condition of sale of the imported goods,
The value of imported goods shall additionally
include
20% of FOB value of the goods,
if not ascertainable
(a) the cost of transport, loading, unloading and handling charges associated with the
delivery of the imported goods to the place of importation
(b) the cost of insurance to the place of importation
1.125% of FOB value of the
goods, if not ascertainable

(Determination of
Value of Export
Goods) Rules, 2007

Overview of Rules
Rule 3
Rule 4
Rule 5
Rule 6
Rule 8
Determination of the Method of Valuation
Determination of Export Value by Comparison
Computed Value Method
ResidualMethod
Rejection of Declared Value
Rule 7 Declaration by Exporter

Determination of the Method of Valuation – Rule
3
The value of export goods shall be the transaction value
The transaction value shall be accepted even where the buyer and seller are related, provided
that the relationship has not influenced the price
Note: If the value cannot be determined under this rule (e.g. relationship has influenced the price), then the value
shall be determined by proceeding sequentially through Rules 4 to 6

The value of the export goods shall be based on the transaction value of goods of like kind and quality exported at or
about the same time to other buyers in the same destination country of importation or in its absence another
destination country of importation
Determination of Export Value by Comparison
– Rule 4
into consideration the
In determining the value of export goods the Proper Officer shall make adjustments taking
relevant factors, including-
difference in the dates of exportation,
difference in commercial levels and quantity levels,
difference in composition, quality and design between the goods to be
assessed and the goods with which they are being compared,
difference in domestic freight and insurance charges depending on the place
of exportation

Computed Value Method – Rule 5
It shall be based on a computed value, which shall include the following:
cost of production, manufacture or processing of export goods
charges, if any, for the design or brand
profit relating to export of goods
Residual Method – Rule 6
The value shall be determined using reasonable means consistent with the principles and general
provisions provided that local market price of the export goods may not be the only basis for determining
the value of export goods
Declaration by Exporter – Rule
7 The exporter shall furnish a declaration relating to the value of export goods

Rejection of Declared Value – Rule 8
When the Proper Officer has reason to doubt the truth or accuracy of the value declared
in relation to any export goods,
he may ask the exporter of such goods to furnish further information including
documents or other evidence and if, after receiving such further information, or in
the absence of a response of such exporter,
the Proper Officer still has reasonable doubt about the truth or accuracy of the
value so declared, the transaction value shall be deemed to have not been
determined in accordance with Rule 3
At the request of an exporter, the Proper Officer shall intimate the exporter in writing the ground for doubting the
truth or accuracy of the value declared in relation to the export goods by such exporter and provide a reasonable
opportunity of being heard, before taking a final decision
In case of rejection, the value shall be determined by proceeding sequentially in
accordance with Rules 4 to 6

Date For Determination of Rate of Duty And
Tariff Value

Date for Determination of Rate of Duty and Tariff
Value
For Imported Goods
Goods are entered for home consumption
For goods imported by a
vessel at a customs port
The relevant date is the date of filing the Bill of Entry or date of arrival
of vehicle, whichever is later
For goods imported by aircraft at
a customs airport
For goods imported by a vessel at
a customs port
The relevant date is the date of filing the Bill of Entry or date of arrival
of aircraft, whichever is later
The relevant date is the date of filing the Bill of Entry or date of entry
inwards to vessel, whichever is later
Goods cleared from a warehouse
The relevant date is the date on which a Bill of Entry for home consumption
In any other goods
The relevant date is the date of payment of duty

Contd
.
For Export Goods
In case of goods
entered for export
The relevant date is the date of the let export order of the Proper Officer
permitting export and loading of cargo on board
In case of any other
goods
The relevant date is the date of payment of duty

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