Page 154 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Unit 9: Valuation of Custom Goods

 Customs value determined in past import transactions occurring at about the same time Notes
between unrelated buyers and sellers of identical or similar goods, or

 Deductive or computed values calculated for identical or similar goods.

Task Discuss the rules of valuation of custom duty.

Self Assessment

Fill in the blanks:

1. The rule that ............................... values declared by importers should be used for valuation
of goods applies not only to arms-length transactions but also to transactions between
related parties.
2. The detailed ............................... rules on the valuation of goods for customs purposes are
contained in the Agreement on Customs Valuation.

3. When the transaction value is not accepted by ..............................., the Agreement lays
down five methods for establishing value.
4. The Agreement on Customs ............................... requires Customs to determine the value
on the basis of the price paid or payable by the importer in the transaction that is being
valued.

9.1.2 Five Other Standards

How should Customs determine dutiable value when it decides to reject the transaction value
declared by the importer? In order to protect the interests of importers and to ensure that the
value in such cases is determined on a fair and neutral basis, the Agreement limits the discretion
available to Customs to using the five standards it lays down. The Agreement further insists that
these standards should be used in the sequence in which they appear in the text, and only if
Customs finds that the first standard cannot be used should the value be determined on the basis
of the succeeding standards. The standards, presented in the sequence in which they are to be
used, are discussed below:
The transaction value of identical goods: Where value cannot be determined on the basis of the
transaction value, it should be established by using an already determined transaction value for
identical goods.

The transaction value of similar goods: Where it is not possible to determine value on the basis
of the above method, it should be determined on the basis of the transaction value of similar
goods.

Under both these methods, the transactions selected must relate to imported goods that were
sold for export to the country of importation and at about the same time as the goods being
exported.

Deductive Value

The next two methods are the deductive method and the computed value method.
Deductive value 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

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