Circular No. 39/2017 Dated 26/09/2017
To,
All Principal Chief Commissioners of Customs All Chief Commissioners of
Customs
All
Principal Commissioners of Customs All Commissioner of Customs
Sub:-
Amendment to Customs Valuation Rules – Notification No. 91/2017 (NT) dated
26.9.17
The valuation of imported and export goods is governed by the
provisions of Section 14 of the Customs Act, 1962 and the rules made
thereunder. The Customs Valuation (Determination of Value of Imported Goods)
Rules, 2007 (CVR) contain the detailed provisions for arriving at the
transaction value of the imported goods, on which the customs duty is levied.
2.
A
need had
arisen to
examine certain
provisions of
the CVR
in light
of Supreme
Court’s ruling in the case
of M/s Wipro Ltd. Vs. Assistant Collector of Customs - 2015 (319) ELT 177 -
S.C dated 16/04/2015
2.1
After
examination and public consultations, the Government has amended the CVR vide
Notification 91/2017 Customs (N.T) dated 26th
September,
2017, as explained below:
Definition of the
term ‘place of importation’
3.
The
term “place of importation” has been used in the CVR; however, the term
was not defined. To bring in clarity, the “place of importation” has been
defined as:
“Place
of Importation” means the customs station where the goods are brought for
being cleared for home consumption or for being removed for deposit in a
warehouse”
3.1
In view of
the above definition, the transaction value of the imported goods in terms of
section 14 of the Customs Act, 1962 would include the costs incurred up to the
place of importation, as defined above.
Treatment of the
loading, unloading and handling charges
4.
The
Hon’ble Supreme Court had ruled in the case of M/s Wipro Ltd. Vs Assistant
Collector of Customs-2015 (319) ELT 177 (S.C.) dated 16/04/2015 that the
landing charges to be added to the value of
goods, should
be based
on actual
charges incurred,
and not
a notional
charge of
1% as has been provided in the Rules.
4.1 By
virtue of the amendment now carried out to the CVR, 2007, the loading,
unloading and handling charges
associated with the
delivery of
the imported goods
at
the place
of importation, shall no longer be added to the CIF value of the
goods.
4.2 The phrase
“loading, unloading
and handling
charges” appearing
in the
amended Rule
10(2)
(a) is
to be
understood in context of
Article 8(2)
of the WTO
Agreement which reads
as “the
cost of transport of the
imported goods
to
the port
or place
of importation”.
Thus, only
charges incurred for delivery of
goods “to”
the place
of importation (such as
the loading
and handling
charges incurred at the load
port) shall now be includible in the transaction
value.
Computation of
freight and insurance
5.
Now,
the 2nd
and 4th
provisos to
Rule 10 (2) impart more clarity in computation of transport and insurance
charges, when actuals of each individual element are not known, but the
cumulative value of FOB and freight, or, FOB and insurance charges are
known.
Treatment of transshipment costs
6.
In
the erstwhile 4th
proviso to
Rule 10(2), while the transshipment charges with respect to a container
being moved
from port
to an
ICD and
CFS were
excluded from
the transaction value of
the goods, there was
no mention
of a
similar treatment
to transshipment of goods
by sea
or air.
Now, by virtue of the 6th
proviso to
Rule 10 (2), costs related to transshipment of goods (from ports to
ICDs;
port to port, port to CFS, Airport to Airport etc.) within India will
be excluded, providing uniform treatment to different modes of transshipment.