Report by the Secretariat: III. Trade policies and practices by measure: (2) Measures directly affecting imports: (ii) Customs valuation and clearance: Para. 22:
Could India explain the purpose of using reference prices, and how the use of such values corresponds to the valuation hierarchy established in the Agreement on Customs Valuation? Second, the revision of "tariff values" every two weeks and on the basis of international market prices could prima facie appear to be a "variable import levy" rather than an "ordinary customs duties" within the meaning of article 4.2 of the Agreement on Agriculture (and refers) and operate similarly to a safeguard mechanism. Could India elaborate on whether the values are aligned with international market prices?
Reply: Tariff values have been notified for palm oils, crude soybean oil, poppy seeds and brass scrap. 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.
The tariff value is a value for customs purposes. Customs duties are levied on this value. The tariff value is neither a "variable import levy" nor does it operate as a safeguard mechanism.
