Technical know-how fees excluded from customs valuation where they are not a condition of sale or tied to imported goods.

Technical know-how fees are not includible in the assessable value of imported capital goods unless the payment is a condition of sale and has a direct nexus with the goods at the time of importation. The collaboration agreement showed that the technology transfer fee was consideration for disclosure of know-how and related technical assistance, not for the sale of the imported capital goods. Because the fee related to post-importation technical assistance and was not tied to the imported goods, its exclusion from customs valuation was upheld and the departmental challenge failed.

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Issues: Whether the technical know-how fee of EURO 40,000 was includible in the assessable value of the imported capital goods.

Analysis: The collaboration agreement showed that the technology transfer fee was consideration for disclosure of know-how and related technical assistance, and not a condition for the sale of the imported capital goods. The payment had no direct nexus with the imported goods so as to form part of the assessable value at the time and place of importation. Amounts payable for post-importation technical assistance or know-how, when not linked to the sale of the imported goods, are not liable to be added to customs valuation.

Conclusion: The technical know-how fee was not includible in the assessable value and the Commissioner (Appeals) was in directing exclusion of that amount.

Final Conclusion: The departmental challenge to the exclusion of the technical know-how fee failed, and the lower appellate order was sustained.

Ratio Decidendi: A technical know-how fee is not includible in the assessable value of imported goods unless it is shown to be a condition of sale and to have a direct nexus with the imported goods at the time of importation.

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