World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

The reply to the five specific questions is as under:

1. 
   Yes.
   
2. 
   The "six circumstances" are given only for the purposes of illustration. There could be more than the six circumstances mentioned in Rule 12 of the Customs Valuation Rules, 2007 for raising doubts on the truth or accuracy of the declared value depending on the facts of the case.
   
3. 
   Yes, risk analysis and risk criteria are also applied based on a number of risk parameters. The acceptance of the declared value would be based on the facts and circumstances of each transaction, as envisaged in the CVA.
   
4. 
   Based on the query raised by the Customs, the importer is required to furnish a copy of the agreement between him and the seller and all other documents as may be required to justify the truthfulness of the declared value. The CVA provides for a process of consultation between the Customs and importer with a view to arriving at a basis of value of goods.
   
5. 
   The Indian Customs law gives primacy to transaction value; in case of rejection of the declared value, the methods prescribed in the WTO CVA are applied sequentially for determination of customs value.
   

11. 
    Can India explain what are "tariff values" (reference prices) and what purpose do they serve in practice?
    

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 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.

WTO Secretariat's report, page 40, para. 21

The Secretariat's report states that a "landing charge" of 1% of the c.i.f. value is added to the c.i.f. value in order to obtain the transaction value."

11. 
    Could India clarify if this 1% charge is a charge to be paid to customs authorities, or is part of a method to calculate the transaction value? If the charge is to be paid to customs authorities, how does this charge reflect the approximate cost of service rendered as required by Article VIII of the GATT?
    

Reply: Article 8.2 of the CVA states that, in framing its legislation, each Member shall provide for the inclusion in or the exclusion from the customs value, in whole or in part, the loading, unloading and handling charges associated with the transport of the imported goods to the port or place of importation. India has provided for the inclusion in the assessable value of landing charges which represent the cost of unloading and handling charges of the imported goods at the port of importation.