TaxTMI 
TaxTMI 
TaxTMI 
If you import goods into India, chances are you already know the hustle—coordinating with foreign suppliers, clearing payments, tracking shipments, and sorting out GST and TP paperwork. But even after all that, there’s one department that can quietly shake up your bottom line—Customs Valuation.
Many businesses think once the invoice is ready and the goods are here, the job is done. But Customs sees things differently. They’re not just looking at what’s on your invoice. They’re digging deeper to see if the value you declared truly covers everything—and if it doesn’t, they’ll add what’s missing and charge you for it.
Here’s how they do it—and why even smart businesses often get caught.
1. Paying Royalties or Brand Fees to a Foreign Company? That Could Be Added to Your Import Value
Let’s say you’re paying a royalty to use a brand name or technology—maybe to your parent company or another group firm abroad. Even if you’re not paying the actual supplier of the goods, Customs can still include that royalty in your import value if it’s related to the goods.
Many businesses miss this because the payment is shown separately. But Customs connects the dots. If that fee is a condition of sale, it’s dutiable.
2. Received “Free” Samples or Bonus Goods? Customs Doesn’t Believe in Freebies
Who doesn’t like free samples or extra stock from their supplier? But here’s the catch—Customs often won’t accept that it’s free. If they think those goods are tied to your main purchase, they’ll add a value to them and charge you duty. So, even if your supplier shows “zero value” on paper, Customs might see it as part of the deal.
3. Product Designed Abroad? Customs May Add That Design Cost to Your Import Value
If you paid for any design, R&D, or tooling done outside India—and those designs are linked to the imported goods—Customs can include those costs in your declared value. It doesn’t matter if you paid another company entirely or if it wasn’t part of the invoice. If it helps make the product, it could be added to your import value.
4. Replacing Defective Goods Under Warranty? You Still Might Have to Pay Duty
This one shocks many businesses. You’re just importing parts or goods to replace something that failed under warranty. No one’s paying you. Your customer isn’t even aware. So, there shouldn’t be any duty, right?
Wrong. Customs may still charge you, because they see it as a new import—even if you’re not charging money for it. And unless your paperwork is rock-solid, you might end up paying duty out of pocket.
5. Deferred Payments or Bonus to Supplier Later? That’s Still Part of Import Value
If you’ve agreed to pay your supplier something extra later—like a year-end bonus or profit share—it might feel like a separate business deal. But if it’s connected to the goods you imported, Customs will likely add it to your import value. It doesn’t matter that the payment happens months later.
6. Your Transfer Pricing Report Looks Great? Customs Might Not Care
Just because your Transfer Pricing (TP) report says your pricing is fair doesn’t mean Customs will agree with it. TP is all about income tax and profit-sharing. Customs, on the other hand, is only interested in what the goods really cost. If they think the price is too low, they’ll push it up.
7. GST, TP, and Customs Speak Different Languages—And That Can Cost You
Your GST consultant, your TP expert, and your import manager might all be doing their best. But here’s the problem—these teams often don’t talk to each other, and the laws they follow aren’t aligned. What works for GST may not work for Customs. And that misalignment is where big risks lie.
Many importers in India get caught in these traps—not because they’re doing something wrong—but because no one warned them.
So What Should You Do?
Start by bringing all your teams together—GST, TP, Customs, and finance. Review your contracts, foreign payments, and any extras you send or receive with shipments. If you're making additional payments abroad—even if not on the invoice—check if they could affect your import value.
Also, don't assume that what passed in the past will pass again. Customs scrutiny is getting sharper every year. Post-clearance audits are common, and even old imports can be reopened.