World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

The landing charges do not represent the duties and taxes of the country of importation, viz. India.

US 38:

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 40, paragraph 22:

The report states that the Central Board of Excise Customs can fix "tariff values" (reference prices) for any type of imported good. The Secretariat report notes that India uses reference prices to calculate customs duties for imports of palm oils, crude soybean oils, poppy seeds, and brass strap. The report also notes that reference prices for edible oils have remained unchanged since 2006. Why are these particular products subjected to reference prices? How are these reference prices calculated? Please provide further details on the background and data source used to establish reference prices. Please explain the use of reference prices in light of Article 7 of the CVA.

Reply: Tariff values have been notified for palm oils, crude soybean oil, poppy seeds and brass scrap, as these goods are prone to undervaluation. Tariff values are fixed on the basis of prevailing international prices of these goods as observed from the various reputed international journals and other publications.

The tariff values are neither arbitrary or fictitious values nor minimum customs values. These values are floating values and are frequently reviewed and revised. As the tariff values on identified goods are computed based on the prevailing international prices, that is to say, the prices at which these goods are sold or offered for sale in the ordinary course of international trade under fully competitive conditions, such values are not inconsistent with Article VII of the GATT 1994 read with the CVA.

The tariff value system promotes greater uniformity and certainty in assessment practice. It checks undervaluation and thus acts as an important policy instrument for collection of appropriate amount of customs duty.

US 39:

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 40, paragraph 23:

The report indicates an importer may appeal against customs decisions on valuation matters. How many appeals are considered, on average, in any given year, and what percentage of appeals are successfully resolved in favor of the importer?

Reply: There is a well laid down procedure for filing appeals against the decisions related to assessment of imported or export goods including on valuation matters. However, no data on the percentage of appeals successfully resolved in favour of the importer or the department is maintained.

US 40:

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.

US 41:

Report by the Secretariat (WT/TPR/S/249): III. TRADE POLICIES AND PRACTICES BY MEASURE: (2) Measures Directly Affecting Imports: (iv) Tariffs: Page 43, Paragraph 27:

According to the Secretariat, "During 2007 10, the Government issued some 230 tariff rate amendment notifications. In addition to the standard rate, importers are required to pay an additional duty ("countervailing duty") and a special additional duty instead of local taxes (section (v)). To determine the applied tariff (and other customs duty) rate applicable to a particular product, separate customs and excise tax schedules must be consulted. These schedules should, in addition, be cross checked with any applicable customs or excise notification that may have raised or reduced the rate on the product." Under the WTO Agreement, does India view the countervailing duty and special additional duty as tariffs, other charges, or charges equivalent to internal taxes applied at the border? Please explain why India considers such categorization appropriate for these particular types of charges. How and when is the public, including non resident importers, notified that India has raised or lowered its tariffs and other customs duty rates applicable to imports? Is there a legal or policy reason why exempted tariff and excise rates are not incorporated directly into the tariff and excise schedules as "final" rates? Given that an importer must cross check multiple sources, some of which may not be readily available on the Internet, in order to determine the duties and charges applicable to a particular imported product, what steps would India consider taking to increase transparency and reduce the burden for importers?

Reply: The countervailing duty in lieu of central excise duty and special additional duty in lieu of state VAT and local levies are in the nature of charges equivalent to internal taxes applied at the border in order to provide level playing field for the domestic industry. These duties are charged at rates equivalent to those applied to like goods that are produced and sold domestically.

Within the ceiling prescribed in the tariff schedule, the Government is empowered to grant exemptions in public interest. These exemptions are published in the form of notifications in the Official Gazette and also uploaded on the departmental website soon after they are issued. Tariff schedules are an integral part of the statutes governing customs and excise duties. As such, they can be amended only through appropriate legislation (an amendment Bill) to be passed by both Houses of Parliament.