Technical assistance fee excluded from customs value where it was not a condition of sale of the imported goods.

Technical assistance fee paid under an assistance and service agreement was not includible in the assessable value of imported goods under Rule 10(1)(c) of the Customs Valuation Rules, 2007. The agreement covered technical, marketing and post-import support such as plant set-up, production assistance, quality control, product development and sales support, and the fee was payable irrespective of whether goods were sourced from the related supplier or third parties. The record did not show that payment of the fee was a condition of sale of the imported goods. Only royalty or licence fees related to the imported goods and payable as a condition of sale can be added to transaction value.

---

---

Issues: Whether the technical assistance fee paid under the assistance and service agreement was includible in the assessable value of the imported goods under Rule 10(1)(c) of the Customs Valuation Rules, 2007.

Analysis: The agreement was for technical, marketing and other assistance connected with setting up the plant, production support, quality control, product development and sales assistance. The fee was payable for such assistance irrespective of whether goods were imported from the related supplier or from third parties. The imported capital goods were tools and spares used for installation and trial purposes, and the record did not show that payment of the fee was a condition for the sale of the imported goods. The governing principle is that only royalty or licence fee related to the imported goods and payable as a condition of sale can be added to the transaction value; payments for manufacturing or post-import activities are not includible.

Conclusion: The technical assistance fee was not includible in the value of the imported goods under Rule 10(1)(c) of the Customs Valuation Rules, 2007, and the addition made by the authorities below could not be sustained.

Ratio Decidendi: A fee for technical assistance or know-how is includible in customs valuation only when it is related to the imported goods and is required as a condition of their sale; payments for post-import or manufacturing-related assistance are not part of the assessable value.

---