Commercial discount on imported goods accepted for assessable value where quantity-based pricing was shown to be normal trade practice.

A foreign supplier's discount on imported goods was treated as a permissible commercial discount for assessable value purposes where the supplier's certificate showed similar discounts to other buyers and variation by quantity ordered. The absence of a specific discount schedule in the price list did not, by itself, justify disallowance of the deduction. The decisive enquiry was whether the discount was actually available in the ordinary course of commerce and founded on commercial considerations. As the department failed to show that the discount was abnormal or outside normal trade practice, assessable value had to be based on the invoice price.

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Issues: Whether the discount allowed by the foreign supplier on imported goods was a deductible commercial discount for the purpose of determining assessable value.

Analysis: The discount was supported by the supplier's certificate showing that similar discounts were extended to buyers elsewhere and that the rate varied according to quantity. The absence of a specific discount schedule in the price list did not, by itself, justify rejection of the deduction. The relevant enquiry was whether the discount was actually available in the ordinary course of commerce and founded on commercial considerations, including quantity ordered. On the materials before it, the department failed to show that the discount was abnormal or outside normal commercial practice.

Conclusion: The discount was held to be a permissible commercial discount and the assessable value was required to be based on the invoice price; the appeal failed.

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