Draft Customs Valuation Rules released – as usual, casual and careless mistakes

By Vijay Kumar

The CBEC has released the draft valuation rules for import and export and have sought public comments.

The usual cut and paste and callous and silly mistakes which are a result of an absence of a second reading or proof reading, are aplenty. We reiterate our demand that the Board should immediately appoint a couple of proof readers.

First the bloomers:-

1. Rule 3 of the Export Valuation Rules -Determination of the method of valuation. –

(i) For the purpose of Section 14(1), and subject to Rule 7, the value of the export goods shall be the transaction value, that is to say the price actually paid or payable for the goods when sold for export from India for delivery at the place of exportation provided the sale is under fully competitive conditions, and price is the sale consideration;

This is perhaps sole and not sale.

2. Rule 14 of the Import valuation Rules: Interpretative Notes. — The interpretative notes specified in the Schedule to these rules shall apply for the interpretation of these rules.

The schedule is not made available for public comment.

3. Rule 2(1)(a) Definitions. — (a) "computed value" means the value of imported goods determined in accordance with Rule 9A of these rules;

There is no Rule 9A in the Rules. Only God and Board know where they got it from.

4. Rule 9(c)- the cost or value of all other expenses under sub-rule (2) of rule 9 of these rules.

Rule 9 has no sub rule 2; what they mean is perhaps Sub rule 2 of Rule 11.

5. Rule 4 Transaction value. — proviso (c) - no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of Rule 9 of these rules;

This must also be Rule 11.

6. Rule 4(3)(iii) of export valuation rules - difference in composition, quality, design, size, type of acking, stage of manufacture, fashion and design in items such as textiles and readymade garments, brand value, and other characteristics between the goods to be assessed and the goods with which they are being compared;

This must be packing!

The Highlights:

An explanation is added to Rule 11,

Explanation : The cost of transport of the imported goods referred to in clause (a) above includes, the ship demurrage charges on chartered vessels, lighterage or barge charges.