TIOL-DDT 577 · the untouched capture
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<html> <head> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <title>Taxindiaonline's DDT 402</title> </head> <body > <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT 577</font><br> 21.03.2007<br> Wednesday</b></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Draft Customs Valuation Rules released – as usual, casual and careless mistakes</font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBEC has released the draft valuation rules for import and export and have sought public comments.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">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. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">First the bloomers:-</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. <b>Rule 3 of the Export Valuation Rules -Determination of the method of valuation. – </b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(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 <b><font color="#FF0000">sale</font></b> consideration;</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">This is perhaps <b>sole </b>and not <b>sale.</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. <strong>Rule 14 of the Import valuation Rules: Interpretative Notes. — </strong>The interpretative notes specified in the Schedule to these rules shall apply for the interpretation of these rules.</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">The schedule is not made available for public comment.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. <strong>Rule 2(1)(a) Definitions. —</strong> (a) "computed value" means the value of imported goods determined in accordance with<font color="#FF0000"> <b>Rule 9A</b></font> of these rules;</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">There is no <b>Rule 9A</b> in the Rules. Only God and Board know where they got it from.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. <b>Rule 9(c)</b>- the cost or value of all other expenses under <b><font color="#FF0000">sub-rule (2) of rule 9</font></b> of these rules.</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Rule <b>9 has no sub rule 2</b>; what they mean is perhaps Sub rule 2 of Rule 11. </font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. <b>Rule 4 Transaction value.</b> — 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 <b><font color="#FF0000">Rule 9</font></b> of these rules;</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">This must also be <b>Rule 11</b>.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. Rule 4(3)(iii) of export valuation rules - difference in composition, quality, design, size, type of <b><font color="#FF0000">acking</font></b>, 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;</font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">This must be <b>packing!</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>The Highlights:</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An explanation is added to Rule 11,</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">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.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <b><font color="#006600">Includibilty</font></b><font color="#006600"><b> of ship demurrage charges in the assessable value- the saga continues - the finale?</b></font><b> </b>in<b><u> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=4368" target="_blank">DDT 466 10 10 2006</a></u>. </b>It is indeed the finale!</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>No Settlement? </b>The Rule on settlement of dispute has been deleted (erstwhile rule 11)</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Rejection of declared value?</b>Explanation has been provided to Rule 13 wherein it has been specified that the said Rule only provides a mechanism and procedure for rejection of declared value in cases where there is reasonable doubt that the declared value does not represent the transaction value. Some reasons for rejecting the declared value have been highlighted in the said explanation </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Export value by comparison</b> – This may open a Pandora’s box !!! If the officers have doubt about the valuation, we may find the comparison method come to play and maybe the hitherto relatively hassle free clearance of exports may get stuck up with the comparison jargon which also provides for adjustments on the basis of list of factors. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Overseas enquiry report</b>, Market Enquiry Report, expert opinion of the Trade and specialized bodies to assist valuation officially and legally.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please send in your comments on the draft Rules. CBEC has been kind enough to make these documents public; let’s help them in framing the law (assuming they are willing to listen)</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/cusdraft.htm" target="_blank">The Draft Rules – <u>import</u> <u>export</u></a></font></b></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Supari</font></b><font color="#006600"><b> King wins in Supreme Court </b></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When we carried the story, <b><u><font color="#663399"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=3719">“Supari Killing”</a> ,</font></u></b> many officers of the department found fault with us for carrying a story about somebody who was not paying duty. Now the Supari King has got an order from the Supreme Court that his product is not excisable after all! He was not required to pay the duty after all! But now will he get the refund from the department, the duty which the department forced him to pay?.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See</strong> <u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=5195" target="_blank">Breaking News</a></u><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=5195"> </a><strong>for more details of the case.</strong></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">The National Tax Tribunal (Amendment) Bill, 2007</font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The RajyaSabha has passed the <i>The National Tax Tribunal (Amendment) Bill, 2007</i> which seeks to make certain changes in the original Act. </font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more DDT </font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></span></font></p> </body> </html>