How is assessable value calculated by customs for imports?


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How assessable value is calculated by customs for imports?


How is assessable value calculated by Customs for determining Import Duty?

Import duty is calculated on the basis of assessable value of goods imported. How to find assessable value of goods imported? I this article, I would like to explain the method of calculating assessable value of imported goods in simple and easy to understand. I hope this method of calculating assessable value helps importers and exporters to find import duty.


Method of calculating Assessable Value under import of goods in India.



In simple terms, 1% added to CIF value of imports is assessable value.

Let me explain the method of calculating assessable value by customs department How is assessable value calculated by customs for imports with a simple example to make you easily understand. You have imported goods worth USD 1000.00 FOB value. If any design and development charges involved, the same cost is added – say USD 100.00. In order to find CIF value, the freight and insurance cost are to be added. 20% of FOB value is taken as freight. Means USD 200.00. Insurance is calculated as 1.125% - USD 13.00 (rounded off). The total amount of CIF value works out to USD 1313.00. If any local agency commission involved, the same also is added on CIF value of goods - say 2% on FOB – USD 20.00. So the total amount works out to USD 1333.00. The said CIF value of USD 1333.00 is converted in to local currency. The exchange rate of foreign currencies is decided time to time by customs and issues notification frequently. Once after adding up 1% on the said amount you will get assessable value. The import duty amount is calculated on the said assessable value.

Please note, I have given the above example on an import under FOB terms of delivery. The above example is only a basic structure adopted by Customs department. Means, if no design and development charges or no agency commission involved, such information can be omitted to calculate Assessable value.


Moreover, if the consignment is on CFR, CIF, DAP, DDU, DDP or any other Inco Terms, you can declare the actual freight amount and insurance amount. However, such amount of freight and insurance should not be an abnormal amount than market value. These value is mentioned electronically when filing Bill of Entry with customs for import clearance procedure by importer or his Customs House Agent.


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I hope, I could explain the calculation of assessable value under imports with example in simple language to make you easily understand. Do you more information to add up to this subject about calculation of assessable value of goods? Share your experience in calculating assessable value to determine import duty under import customs clearance procedures and formalities.




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Adithya: Sir, Is it required the assessable value be claculated only on CIF instead of CFR or FOB ? "assessable" its should have been only the Basic price or say at max. FOB, why the Insurance or Freight to be taken for assesable value. Just wanted to to know the intent behid the calculation Adithya

VANDANA SHARMA: Sir, The articles are very useful and easy to understand. Wish you should always be writing on each and every term and condition of exports and imports. Your articles are really beneficially not only for beginners but for experienced also. Pl give article on INCO terms also in details.

Ravindra Patil: From where can we get the actual current duty value levied on materials imported wide various HSS Codes?

Chahat: Sir, thanks for sharing this article. i) Please confirm if FSC/SSC charges applicable in Air Freight should be included in the Freight. We sum up Freight and CC Fees for calculating Freight. Do we also need to add FSC and SSC Charges. ii) If these charges are not to be mentioned as freight then it implies that no Customs duty is applicable on FSC/SSC Charges. Is it true?


anjali: What is the difference between basic sale value and assessable value?

Surendran Kollerath: Hi Ravindra Patil, You can find online from authorized agencies. is launching this arrangements shortly.

Surendran Kollerath: Hi Chahat, There is a balancing freight charges from port of loading to port of delivery adopted based on different parameters by customs authorities of importing countries. In other words, most of customs of importing countries fix a minimum percentage of freight amount.

Vidya : Separate Air Freight Invoice. If the Consignor send a separate invoice for Air Freight charges, how it can be entered in the Bill of Entry. He is not in a position to add freight in the individual invoices. Example (Inv No) (Date) ) Art No)(Description)(UOM)( Rate/PerPC USD) (NetValueUSD 90123456849- 21-12-13 PRD-01 ABC CHEM PC 20 100 2000 90123456850-21-12-13 PRD-02 DEF CHEM PC 30 150 4500 90123456851-21-12-13 PRD-03 GHI CHEM PC 40 300 12000 90123653860-24-12-13 AIR FREIGHT FOR INV 90123456849/50 & 51 700 These are the 4 invoices and the consignee has to pay - USD 18500 being the Commodity Value and USD 700 as freight and Net payable is USD 19200. In the Bill of Entry it is easy to show the commodity Invoices 90123456849, 50 & 51 but how can they show Invoice No 90123653860 dated 24-12-13. Is there any provision to show exclusive freight value in the BE since Freight itself is not a commodity. Without all the invoices shown on the BOE the bank will not allow remittance. Put together this shipment is under INCO Terms C&F or DAT . Is there any solution?

Rahul : Hi, I have query let assume example as under, By Sea, FOB Price is 100 Freight is 5 Insurance is 2 so total ass. value will be 108.07 By Air FOB Price is 100 Freight is 25 Insurance is 2 so total ass. value will be 128.27 Good are same & even imported under same hs code Let say avg total duty is 30% of ass value so Duty for SEA shipment will be 32.42 & for air shipment it is 38.48 so there is difference of 6 Basic purpose of import duty is to protect domestic industry & product valuation should be same so why does customs doesn't standard freight as buyer or seller decides the mode based on urgency of the material. why customs charge different duty on same products.

SVBHASKER: Sir, Good article on computation of customs duty with illustrations taking incoterm FOB. It is also mentioned in the article that if the consignment is on CFR, CIF, DAP, DDU, DDP or any other Inco Terms, one can declare the actual freight amount and insurance amount. But if the terms of invoice(TOI) is mentioned as CIF and the Bill of Entry is ticked as CIF, then the system does not allow the CHA/importer to put freight amount on BE. In that case, is it advisable legally to separate cost, insurance and freight elements of CIF so as to fill the Bill of Entry ticking terms of invoice as FOB. Can CIF terms be converted as FOB so to pay customs duty legally.Learned author and the readers are requested to respond with provisions of law and CBEC circulars on the issue.

RAJI REDDY. K: Hello Vidya, You have informed that terms of invoice is C&F. Then it is not understood, why freight is not included in the commodity value in first place. The very term C&F indicate that the price in the invoice is sum total of commodity cost and freight. I think system does not have a provision to show freight amount when you tick CIF as Terms of invoice on the Bill of Entry. Now the option left in the present case is to split freight element of USD 700 in three proportions in the ratio of weight of the goods in three invoices mentioned and show as miscellaneous charges on the Bill of Entry . Hope you are convinced.

Sainath Kalangutkar: Sir, I just want to know what would be the import duty structure if the cost of goods is less then the cost of tooling development? I am planning to import some Bare PCB's from Hongkong. The cost of goods is USD 6.54 and development cost is USD 1340 In such case the how the duties are calculated and what would be the import duty structure?

MAHESH S AKERKAR: Sir, We as exporters entered into contract with buyer that he should nominate a vsl with crane for loading and FOB price was agreed. Also, it was accepted by the buyer, that in case, he nominates a vsl without crane then, he will make arrangement for loading the cargo into the vsl and we will only keep the cargo alongside the vessel in barges. SB was filed with FOB value in the contract. Vsl was loaded and left the port. Later, it was brought to our notice, that as the transaction is FOB, the loading charges paid by the buyer should be included in the cost of FOB and duty to be paid for the loading charges including the service tax element on loading. Pls clarify on follwg : 1. Duty was paid incl. differential duty as per the Bank Realisation Certificate. 2. Buyer has paid the loading charges as agreed in the contract for nominating a vsl without crane. 3. Exporter is eligible for Service Tax refund if he has made loading arrangements. In this case, the buyer made arrangement and the Loading operator raised invoice on buyer. In such case, is the duty applicable on (a) Both Loading + Service tax or (b) only on the loading charges. Reply on above, may kindly be sent on most urgent basis to rgds MAHESH

Dmitry Lebedev: good day! We have inquiry fr delivery and Customs clearance of 1 roll to Bokaro. Pls advise if it possibile to effect customs clearance without payment if import Customs dues, as this roll 'll be shipped instead of the defective one. Customs code 8455 3031 00 Shipper and Cnee ready to provide any documents confirmed defect of previous roll and confirmed that new roll hv same specifications. In case of positive reply, Shipper ‘ll provide us cgo details. Either, pls advise what terms must be met to rcvd right for duty-free import of roll. In case Customs dues to be paid in any case, pls provide us copy of confirming / explaining document or address of website, when we can find this information. 'll appreciate fr your soonest reply and comments. thanks and brgds Dmitry Lebedev

N.YOGEESWAR: how to calculate high sea sales amount and how to calculate rsp


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vijay bansal: i am a customs broker and would like be a part of this discussion form i can advise Mr.Dmitry Lebedev about customs duty aspect provided all relevent documents r available

Sumit Arya: Sir, Do we pay this 1% to customs or it is just used to calculate duty. please clarify. regards

Admin: Hi Sumit Arya, 1% is added on CIF value for customs calculation of assassable value purpose only

Admin: Hi Sumit Arya, 1% is added on CIF value for customs calculation of assassable value purpose only

Ranjit Gurav: Dear Sir, In case of Imports with Invoice value 500 USD,While deriving Assessable value for EXW incoterm, if the Origin charges are 100 USD & Port to Port Freight is 80 USD So total Charges till Mumbai is 180 USD then How much we have to take freight for calculating Duty 1.Does it will be 180 USD ? 2.Does it will be 20 % of 500 USD? 3.Does it will be 20% of 180 USD? Kindly clarify on this & also please inform the circular or notification no. on this topic to refer.

RAJI REDDY. K: Dear Ranjit, In my personal view, you have to add origin charges of 100 USD to 500 USD of EX Works incoterms to arrive at FOB value of 600 USD first. Then take port to port freight of 80 USD. Please refer Rule 10(2) of Customs Valuation (Determination of Value of Imported Goods) Rules 2007. Mention FOB value as 600 USD in Bill of Entry and 80 USD as freight in the columns provided on Bill of Entry in addition to insurance and other 1% landing charges of FOB . In case actual Air freight incurred is more than 20% of FOB, then the freight is restricted to 20% of FOB in terms of above valuation Rules.

Sounder: Hey My Supplier agreed to reduce the value of goods from USD 600 to USD 180 dollars in the invoice. on which value i will be charged for customs

Admin: Hi Sounder, You can amend commercial invoice before filing import documents to customs of importing country. However, such reduction of value in invoice should not be an abnormal value of market price of same product in importing country.

Syed: My name is Syed. An importer in Ireland. Recently i have a container rejected by irish goverment authority for not declearing product on related documents therefore i shiped that container back to exporter. But I am woried about the money i have paid for. How to get my money back now?/

AMAN LAHKAR: I want to buy a computer game( Fifa 15 ) from As this game is not available on so i have to import it from The game will cost me £37.52 which is in indian rupees equals to 3616.89 rs including packing and shipping but on delivery i have to pay import tax( VAT ) for it. So will u kindly tell me the amount i have to pay for import tax.

Admin: Hi Aman Lahkar, You may read our article about HOW TO FIND ASSESSABLE VALUE in this website

ankush garg: Hi this is ankush garg, We have always paid a custom duty as per SUGGESTED Value(SV) not actual Imported value (AIV) of goods. for example actual if AIV is 65/kg then sv if 75/kg hence making Assessable Value(AV) is 100/kg. is there any special rule in hardware which allows them to make calculation diffrently.

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G RAVI KUMAR: in the HSS shipment, HSS 2% will be calculated either CIF Value or Ass.Value i.e. CIF VALUE x 2% HSS value = x 1% LC = A.V. X BCD OR CIF VALUE X1%LC = A.VALE X 2% HSS = AV+HSS X BCD

Rajesh Upadhayay: dear sir please clarify suppose I import goods @ Rs 100/- per kg and discount also received from vendor @ Rs 10/- by way of credit note and same has been enclosed with invoice and invoice reference also mention on credit note. on the format of bill of entry discount column is also mention which please note. kindly suggest whether duty will be calculate on Rs 100/- on on after set off discount 100-10=90/- kind regards Rajesh Upadhayay

Kruger India (Imports) : We have following query, request you to please answer the same. 1. For preparing ARE-I the duty is calculatted on FOB OR CIF value ? 2. We have to export our product (industrial fans) to our parent company in Singapore for testing & return.We have to send the goods as no commercial shipment with GR waiver from bank. After testing our parent co. will charge testing charges. Now bank says that for closure of GR waiver the reimport value should match with export value for the GR waiver obtained. But as per customs we have to clear by paying duty on testing charges plus freight & insurence both ways not on total value of fans, since it is reimport after testing. Please advise us, how can we convice our banker to close the GR waiver. Also advice the freight to be declared on shipping bill as we have send the shipment on DDP basis. We have to declare Total freight from Mumbai Airport to Singapore factory or only Airport to Airport.

Rajesh Upadhyay : Please clarify the query regarding custom duty calculation method Suppose I have import goods @ Rs 100/- per kg and along with invoice supplier also give credit note/discount @ Rs 5/- per kg and credit note itself send along with invoice. Please suggest whether custom duty calculation will be done by custom authority @ Rs 100/- per kg or after set off the discount Rs 100-5=95 per kg. For your ready reference I want to share that discount column will also mention on bill of entry

Adeel Aziz: Dear, Thanks for useful article. Just to clarify can you advise if customer is importing to USA and invoice clearly mentions the FOB separately and then Freight is added. Then total C&F value is mentioned on invoice too. e.g. FOB Value: 1500 $ Freight: 250$ Total C&F: 1750$ Terms of Delivery: DDP Which value is Dutiable: ?? 1500$ or 1750$

Vishal Patial: Why we add 1% Landing Charges after adding Freight & Insurance...

Parth Enterprises : Thanks for putting up a wonderful resource website of I'm a small time importer from Mumbai. If I may ask, I want to understand why is that there is difference in assessment value of same product across various port. For example 1.5mm clear glass sheet that I'm importing is last assesed at Rs. 123 / SQM @ Nhavasheva port, while in mundra / kolkata / cheenai ports, its valued at a very low prices. Can you put some light on this aspect. Also the assessment value rates are not published anywhere. How does one get access to this information?

Richpal Singh: Please clarify the query regarding if freight invoice is $10.50 PMT but giving with less commission 1.25% then will customs calculate duty on $ 10.50 or less commission?

sasi kumar: I have purchased one SAMSUNG LED HD tv ( SMART) and is taken as accompanying baggage on my travel to India from Saudi Arabia. Since I am an NRI, I am entitled for duty free import upto Rs. 45000/ > This TV costs only Rs. 35000/ in Saudi, whereas it may cost about Rs. 80000/- in india. In this case, how the customs is going to value the goods. I have a proof of invoice

Ramesh Menon: Hello, my query is regarding Ex-bond shipment clearance. We are based in a SEZ unit. I have a ex-bond shipment to be cleared from Panvel warehouse to Seepz. The supplier has raised an EXW invoice on us. Now while filling BOE at Seepz customs will there be a problem based on the incoterm as my invoice mentions term as EXW & as per my agent while filing BOE in Seepz freight needs to be mentioned separately while filing EXW invoice. Is it correct. Can I not file the total value of the invoice & not mention the freight in the BOE. Kindly advise

Shakti Chauhan: Dear sir Thanks for this information,i donot properly understand about custom duty under calculating HS Code 85258090 from SHENZHEN (CHINA) TO dELHI AIR CARGO (INDIA) Waiting for your reply, Shakti Chauhan (91-75289-34264)

Srinivas: Dear Sir, I had a query, is the total duty for any raw material to be paid on material cost only or duty need to be paid including freight also.

SHARAD: Dear Sir, Please provied the calculation of bill of entry as per detail gevin velow. purchase of primal (TM) 3208 emulsion 10 drum 2150kg. net weight rate 8.00 total USD 17200 and USD 4064.64 freight and 1.125% insurance and miss charges USD 740.70 but Assessable value made by custome departmant in bill of entry 1463930.24, bill of entry rate(66.70) Sir,how to calculate assessable value bcd 146393 cvd-201290.40 addi duty 72881.80 total duty 430995/-

Rashmi : If the design and development charges are borne by seller, will it be included in fob price?

Harish: Dear all , Anyone could you please tell me the HS code and Import duty for Rose Bud protective sleeve nets. Please Help me .

svbhasker: Dear Sharad, Customs duty is calculated as hereunder: Let assessable value be Rs 100, BCD 10%,CVD 12.5%, SAD 4% and ED cess 2%,SHE cess 1%. Step 1: BCD = 100X10%= 10 Step 2: CVD = (100+10)X 12.5%=13.75 Step 3: SAD = (100+10+13.75)X4% =4.95 Cessesses = 2%+1%=3% on (10+13.75)=23.75X3%=0.713 Total Customs duty payable BCD 10,CVD 13.75, SAD 4.95 Cesses 0.713 Total duty = 29.413 Please check up for arithmetical accuracy if any. Hope you understood the duty calculation method.

samiullah: hi this is samiullah from kadapa andhra pradesh, please explain me how to get decide the price of any good for export. for example the rice price per ton is 450 dollars, then what will be the minimum price we have to quote to the customer after calculating the customs and other charges. please explain me in detail.....iam waiting for your reply.

Pankaj Jaju: Sirs, We appreciate this service and the good work being done by you. We are importing certain Ferrous and Non-Ferrous goods at Nhava Sheva and Mormugao ports. However, irrespective of the actual cost of the goods, the Customs have their own methodology of "Loading" their own prices. When the Customs department considers the Assessable value at a far higher price then the actual martket price, it becomes expensive to us. How do the Customs calculate this "Load" rate? Is there any web-site which gives these rates? Thanks, Pankaj Jaju

PRAKASH SORATHIYA: If one can import Betel nut of HS Code: 08028010 from Vietnam to India in SEZ ( special economic zone) unit in India . and CIF Value is $2500/- PMT ( CIF) then what amount take for Assessable value for calculating duty? & what amount come for Duty forgone ?? Kindly reply on my mail id.

Sanjay Kumar: Our Parent company is in Sydney, Australia. Indian company is 100% subsidiary of the Australian Company engaged in web and software development. Now parent company want to send some used computer equipment to setup the Indian company (such as Computers, routers, switches, LCD Projectors and other bits and PCs). We need to know whether parent company can send used computer equipment to Indian company for setup and what sort of duties or custom formalities we need to follow? Please help us. Thanks

Krishna: Proviso (ii) to rule 9(2) of customs act about 1% loading for loading,unloading,handling was struck down by supreme court in Garden silk Mills case. Customs still applies the rule to arrive at assessable value , I believe. What is the correct position as on date?

Neha : Hi Surendran, Thanks a lot for putting up this useful article together. It is indeed very informative. I would greatly appreciate if you could help me with a few question about importing into India. The thing is, I wish to import SAMPLES of products that I wish to sell later worth USD 20 ( total price including shipping =USD 110) from Aliexpress into India. I am not sure how much customs/import would I have to pay. Please help me ! I have the following quick questions: 1.The CIF value of the 7 wallpaper rolls that I am ordering is $110 which comes out to be approx 7700 !!! Does this mean I will have to pay customs even though the value of product is only $20? 2. Since these rolls are SAMPLES , do the custom officers actually confirm some way whether or not a shipment is a SAMPLE? 3. Is there any paperwork required on my side to be shown to the custom if need arises when importing SAMPLES (letter of authorization etc.... I don't have an IEC) 4.Since the products have a value of $20, do I ask the seller to print this value in the invoice when importing as a "SAMPLE" or should they just mark the shipment as SAMPLE with no invoice/ free sample ( since per definition a SAMPLE is one that is provided free of cost) 5. what are commercial documents? would my seller on Aliexpress know it? I might be bothering you with my questions, but I have been trying to find these answers for quite sometime now. I shall be grateful to you for this timely help! Thanks again!

ilyas: How to calculation of custom duty and VAT for electronic items for import from china ?

Vyankatesh S Repal : We want guidance to calculate import tax for our product Here is some basic information about our product. So, how import tax should calculate now? What is the formula to calculate.import tax Are there any additional taxes (like excise duty) we have to pay before taking these products to our company? Please help us to improve our business

Johnf289: you may have an important weblog here! would you prefer to make some invite posts on my blog? cgdefaeacegf

hyan arrow: my motherboard from aliexpress is 77$ ---how much customs duty,if its above 2000rs i wud like to send it back,how can i do it and claim refuns..thanks

Gunjan Nagda: Is 1% landing charges exempted for procuring any goods imported by a SEZ unit from another SEZ unit. Because Bill of Entry is only document for procurement of any goods from one SEZ to another SEZ.

K P Dave: Now a days it has become very difficult to justify import values specially when it is from China. Indian customes assess values almost two to three times higher. Just I have gone through such case. It was LED solar light imported from China price was 59 USD per 100 lights. consignment was of 500 lights means 295 USD and fedex air freight 160 USD. As per standard procedure assessable value must be 455 USD. Now custom has loaded assessable value Rs. 1,20,000 justifying that this product is sold in online shop at 220/- !! Can you guide me Mr Surender if any specific method is there.

bejapur shyam: Sir iam wishing to import copper scrap for resale if I get CIF 1000 US /MTS of 20 tons does banks arrange letter of undertaking or letter of comfort should we pay any percent of the total value of the import plz explain

Raman: There is a difference of US D 2700 between Comml invoice n value mentioned in BOE How can this difference arise ? BOE value is more than invoice

Vinod Amalzari : I have read the very detailed information on Import and Export from your link published: Thank you for the detailed information. We at Intellipredikt support a DG product company to sell their products in India. We are not subsidiary of US company. We import the US product (An electronic item used in Automotive diagnostics, it is shipped as Assembled PCB) and sell the product to an end customer. The charges added before we receive product on list price in US are Frieght + Land + Customs. However customs also adding 20% on the product on FOC. We are not able to find a suitable explanation why customs is apprising the assessable value by 20%? Could you please help us to understand how we can reduce this additional cost ? please let us know if you need more inputs.

Vinod Amalzari : We import the US product (An electronic item used in Automotive diagnostics, it is shipped as Assembled PCB) and sell the product to an end customer. The charges added before we receive product on list price in US are Frieght + Land + Customs. However customs also adding 20% on the product on FOC. We are not able to find a suitable explanation why customs is apprising the assessable value by 20%?Could you please help us to understand how we can reduce this additional cost ? please let us know if you need more inputs.

Balachandar N: Dear Mr.Vinod, Pl. refer to the CBEC Circular issued on 26 Sep 2017 on Customs Valuation. In this Circular, Government has attempted to bring the spirit of Supreme Court Decision in the case of Wipro Ltd. Versus Assistant Collector reported in 2015 (319) E.L.T. 177 (S.C.). One of the point dealt in the Circular is about adopting 20% addition and scenarios also provided. Hope, this would bring in more transparency. Industries is of the view that this 20% is to do with Valuation of the price of goods. This circular provides a different view and scope and accordingly, for finalisation of imports on Commercial basis, this basis may not hold good. Regards

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