Customs valuation excludes trademark licence and management fees where they are unrelated to imported goods and not sale conditions.

Rule 10(1)(c) permits additions to customs value only for royalties or licence fees related to the imported goods and payable directly or indirectly as a condition of sale, where not already included in the price. Trademark licence fee paid for use of a mark on finished goods manufactured in India was linked to external sales of the finished products, not to the import of raw materials or components, so it was not shown to be related to the imported goods or a condition of their sale. Management fee paid under a cost allocation arrangement was reimbursement for administrative and management services independent of the import transaction, and likewise not includible in assessable value.

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Issues: Whether trademark licence fee and management fee paid to foreign group entities were includible in the assessable value of imported goods under the Customs Valuation Rules, 2007.

Analysis: Rule 10(1)(c) permits addition only of royalties and licence fees related to the imported goods, payable directly or indirectly as a condition of sale, where such amounts are not already included in the price actually paid or payable. The licence fee in the present case was payable for use of the trademark on finished goods manufactured in India and was linked to external sales of the manufactured products, not to the import of the raw materials or components. It was therefore not shown to be a payment related to the imported goods or a condition of their sale. The management fee under the cost allocation arrangement represented reimbursement for administrative and management services rendered by group entities. Those services were independent of the import transaction and were not contingent on the import of goods from the related suppliers.

Conclusion: Trademark licence fee and management fee were not includible in the assessable value of the imported goods.

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