Report by the Secretariat (WT/TPR/S/249):III. TRADE POLICIES AND PRACTICES BY MEASURE: (2) Measures Directly Affecting Imports: (ii) Customs valuation and clearance: Page 41, paragraph 25:
The report indicates transaction value is not used to assess additional duty on imports of packaged goods. Please explain this in light of Article 1 of the CVA.
Reply: Central excise duty is chargeable on domestically produced goods. While some goods are charged to excise duty based on transaction value, certain packaged goods are subject to excise duty based on maximum retail sale price less abatement. Hence, when like packaged goods are imported, they are assessed to additional duty on maximum retail sale price less abatement so to provide a level playing field to the domestic industry.
U.S. Follow-Up Question: We understand from India's response that rather than using transaction value as contemplated by CVA Article 1, India applies a value based on the Maximum Retail Sale Price, and that the reason for this departure from Article 1 is to "provide a level playing field to the domestic industry." Please explain how, under WTO rules, this explanation excuses India from complying with the CVA Article 1 general requirement to use transaction value.
