World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

Malaysia 10:

Report by the Secretariat (WT/TPR/S/249 04), page 40, paragraph 22

The Central Board of Excise and Customs is authorized, by notification in the Gazette of India, to fix "tariff values" (reference prices) for any type of imported (exported) good. At present, India uses "tariff values" to calculate customs duty applicable on imports of, inter alia, palm oil and palmolein oil (crude and RBD), as well as crude soybean oil, poppy seeds, and brass scrap. According to the authorities, "tariff values" are revised every two weeks and are adjusted to align with international market prices; however, "tariff values" for edible oil remain unchanged since 2006 (Table III.2).

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  Could India please elaborate on the reason for the use of "tariff values" to calculate customs duty for the relevant products, instead of the transaction value.
  
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  Could India please elaborate on the reason for not revising the tariff values for edible oil since 2006.
  

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 computed 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.

The tariff values are neither arbitrary or fictitious values nor minimum customs values. As these values on identified goods are fixed on the basis of 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. These values are in fact floating values and are frequently reviewed and revised so as to keep them closer to the transaction values under Article 1.1 of the CVA.