Buying commission exclusion applies when foreign agent acts only as procurement representative for the importer.

Amounts paid to a foreign buying agent for documentation and service charges were held to be excludible from the assessable value of imported goods as buying commission. The agreement and import documents showed that the foreign party acted only as a buying agent, with services confined to procurement-related functions and representation of the importer abroad. Rule 9 of the Customs Valuation Rules permits exclusion of buying commission, and the explanatory note treats it as fees paid to an agent for such representation. The description of the charges did not alter their true character, and the claim was accepted in favour of the assessee.

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Issues: Whether the amount paid to a foreign buying agent described as documentation and service charges was excludible as buying commission while determining the assessable value of imported goods.

Analysis: The agreement and import documents showed that the foreign party acted only as a buying agent for the importer. The services rendered were confined to procurement-related functions, and the charges described as documentation and service charges were not shown to be anything other than commission for representing the importer abroad in the purchase of goods. Rule 9 of the Customs Valuation Rules permits exclusion of buying commission, and the explanatory note treats it as fees paid to an agent for such representation. On the facts, the nature of the payment was substantially the same as in the cited precedent, and the description given to the charges did not alter their true character.

Conclusion: The amount paid to the foreign agent was buying commission and was excludible from the assessable value; the issue was decided in favour of the assessee.

Ratio Decidendi: Where a foreign agent acts only as a buying agent, amounts paid for procurement-related incidental services are excludible as buying commission if they are in substance remuneration for representing the importer abroad in the purchase of goods.

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