World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

Reply: Data is not readily available.

US 34:

Report by the Secretariat (WT/TPR/S/249):III. TRADE POLICIES AND PRACTICES BY MEASURE: (2) Measures Directly Affecting Imports: (i) Customs procedures: Page 39, paragraph 18:

The Secretariat report indicates that India has mandatory preshipment inspections requirements for imports of metallic waste and scrap. Has India notified such requirements to the WTO? If not, when will India submit its notification of these preshipment inspection requirements? Does India plan to phase out these requirements? If so, when?

Reply: Indian will be notifying the requirement to WTO shortly; however, the procedure to import the metallic waste and scrap is given at para 2.32 of the Handbook of Procedures Volume 1 and a copy of the same is available at http://dgft.gov.in.

US 35:

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 39, paragraph 20:

The report states that transaction value may be rejected if reasonable doubt arises concerning the accuracy of the declared value such as a significantly higher value at which identical or similar imports at (or about) the same time, in comparable quantities and comparable commercial transaction, were assessed. What is considered a significantly higher value which gives rise to a reasonable suspicion? The report also states that royalties and license fees must be included in the transaction value if not included in the price actually paid or payable. How is this requirement consistent with Article 8 of the CVA?

Reply: Under Rule 12 of the Customs Valuation Rules, 2007 the Customs may raise doubts on the truth or accuracy of the declared value of the goods where identical or similar goods are imported at a significantly higher value at or about the same time in comparable quantities in a comparable commercial transaction. The term "significantly higher value" has not been defined under the said Rules. The ordinary meaning of the term "significantly higher value" is "substantially higher value" or "considerably higher value".

It is relevant to mention here that Rule 12 by itself does not provide a method for determination of value; it provides a mechanism and procedure for rejection of declared value in cases where there is reasonable doubt that the declared value does not represent the transaction value. The acceptance of the declared value is based on the facts and circumstances of each transaction, as envisaged in the CVA.

The customs valuation legislation of India has been framed on the lines of the CVA. Following the CVA, the law provides that where the declared value is rejected, the value will be determined by proceeding sequentially in accordance with rules 4 to 9 of the said Customs Valuation Rules, 2007.

Under Article 8 1(c) of the CVA, royalties and license fees related to the goods being valued that the buyer must pay, either directly or indirectly, as a condition of sale of the goods being valued, to the extent that such royalties and fees are not included in the price actually paid or payable, are taken into account in determining the customs value under the provisions of Article 1. This provision has been incorporated in the customs valuation legislation of India.

US 36:

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 39, paragraphs 20 25:

Does India apply paragraph 2 of the Decision on the Valuation of Carrier Media Bearing Software for Data Processing Equipment? If not, why not, and would India consider applying paragraph 2?

Reply: India follows the valuation practice mentioned in Para 1 of the Decision No. 4.1 adopted during the Tenth Meeting of the Committee on Customs Valuation held on 24 September 1984. Para 2 of the Decision indicates that the approach to include only the cost or value of the carrier medium and not to include the cost or value of the data or instructions for valuation purposes is optional. Further, Para 3 of the Decision requires that only those Parties which adopt the practice of not including cost or value of the data or instructions while assessing carrier media will be required to notify the committee.

In India's case, the approach on valuation is based on transaction value under Section 14 of the Customs Act, 1962 read with the Customs Valuation Rules, 2007 which provide for inclusion of additional elements such as royalties and license fees in the assessable value under certain conditions. In view of Para 3 of the aforesaid Decision, India is not required to notify its position to the Valuation Committee.