Assessable value excludes reimbursed licence fee where it is not extra consideration for the sale of medicines.

Licence fee paid to the Food & Drugs Administration for obtaining a loan licence, and later reimbursed by the loan licensee, was not treated as extra consideration flowing back to the assessee. Duty had already been computed on the market price at which the loan licensee sold the medicines, and the fee was found to be a separate licensing cost rather than part of the sale price. On that basis, the fee was held not includible in the assessable value, and the demand was unsustainable.

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Issues: Whether the licence fee paid to the Food & Drugs Administration on behalf of the loan licensee, and later reimbursed, was required to be added to the assessable value.

Analysis: The duty had been computed on the market price at which the loan licensee sold the medicines. The licence fee was paid for procuring the licence for the loan licensee and was subsequently reimbursed. On these facts, the amount was not an extra consideration flowing back from the loan licensee to the assessee.

Conclusion: The licence fee was not includible in the assessable value, and the demand was not sustainable.

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