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Chapter 2

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Relevant Date for Imported Goods (Cleared for Home Consumption - Non-Warehoused)

Topic: Time of SupplyChapter: Chapter 2
Relevant Date=max⁡(Date of presentation of Bill of Entry for home consumption,Date of entry inwards of vessel/aircraft/arrival of vehicle)\text{Relevant Date} = \max(\text{Date of presentation of Bill of Entry for home consumption}, \text{Date of entry inwards of vessel/aircraft/arrival of vehicle})
This formula, based on Section 15(1)(a) of the Customs Act, 1962, determines the date for applying the rate of duty and tariff valuation for imported goods cleared directly for home consumption without being warehoused. The later of the two specified dates is considered for this purpose.

Relevant Date for Imported Goods (Cleared for Home Consumption - Warehoused)

Topic: Time of SupplyChapter: Chapter 2
Relevant Date=Date of presentation of Bill of Entry for home consumption from warehouse\text{Relevant Date} = \text{Date of presentation of Bill of Entry for home consumption from warehouse}
This formula, based on Section 15(1)(b) of the Customs Act, 1962, determines the date for applying the rate of duty and tariff valuation for imported goods cleared for home consumption from a customs warehouse. The date of presentation of the Bill of Entry for home consumption from the warehouse is the sole determining factor.

Relevant Date for Export Goods

Topic: Time of SupplyChapter: Chapter 2
Relevant Date=Date of presentation of Shipping Bill or Bill of Export\text{Relevant Date} = \text{Date of presentation of Shipping Bill or Bill of Export}
This formula, based on Section 17 read with Section 50 of the Customs Act, 1962, determines the date for applying the rate of duty and tariff valuation for goods being exported. The date on which the Shipping Bill or Bill of Export is presented is the relevant date.

Exchange Rate Determination Date

Topic: Time of SupplyChapter: Chapter 2
Exchange Rate Date=Relevant Date for duty determination as per Section 15 or 17\text{Exchange Rate Date} = \text{Relevant Date for duty determination as per Section 15 or 17}
The exchange rate applicable for converting foreign currency into Indian Rupees for valuation purposes (as per Section 14) is the rate notified by the Central Board of Indirect Taxes and Customs (CBIC) on the relevant date determined as per Section 15 (for imports) or Section 17 (for exports). This ensures consistency in valuation.

Assessable Value (Transaction Value Method)

Topic: Valuation under CustomsChapter: Chapter 2
AV=P+AAV = P + A
This is the primary method for valuation. 'AV' represents the Assessable Value, which is the value on which customs duty is levied. 'P' stands for the price actually paid or payable for the goods when sold for export to India. 'A' denotes the total additions to the price actually paid or payable, as mandated by Rule 10(1) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.

Additions to Price Actually Paid or Payable (Rule 10(1))

Topic: Valuation under CustomsChapter: Chapter 2
A = C_B + C_P + R + V_M + P_R + T_I_H
This formula details the components that must be added to the price actually paid or payable ('P') to arrive at the Assessable Value. 'A' is the sum of: 'C_B' (commissions and brokerage, excluding buying commissions); 'C_P' (cost of packing); 'R' (royalties and license fees related to the imported goods); 'V_M' (value of materials, components, tools, dies, moulds, etc., supplied by the buyer free of charge or at reduced cost); 'P_R' (proceeds of any subsequent resale, disposal or use of the imported goods that accrue to the seller); and 'T_I_H' (cost of transport, insurance, loading, unloading, and handling charges associated with the delivery of the imported goods to the place of importation).

Conversion of Foreign Currency to Indian Rupees

Topic: Valuation under CustomsChapter: Chapter 2
AVINR=AVFC×ERAV_{INR} = AV_{FC} \times ER
When the Assessable Value ('AV') is determined in a foreign currency, it must be converted into Indian Rupees for duty calculation. 'AV_{INR}' is the Assessable Value in Indian Rupees. 'AV_{FC}' is the Assessable Value determined in foreign currency. 'ER' is the exchange rate as notified by the Central Board of Indirect Taxes and Customs (CBIC) under Section 14(3) of the Customs Act, 1962, applicable on the date of presentation of the Bill of Entry.

Assessable Value (CIF Basis)

Topic: Valuation under CustomsChapter: Chapter 2
AV=Costext(FOB)+Insurance+FreightAV = Cost ext{ (FOB)} + Insurance + Freight
The standard method to arrive at the Assessable Value for customs duty calculation, where Cost is the Free on Board value, plus the cost of insurance and freight to the port of entry.
Chapter 2 Formulas — CA Final | Kartavvya