Assessable value of data processing systems excludes application software and training charges, with duty deducted on technical charges.

Application software supplied with the goods and training charges were excluded from the assessable value of the data processing system under the governing valuation principles and the controlling Supreme Court ruling on application software. Technical charges were not contested in the appeal and were treated as includible, but the amount referable to duties falling within the statutory exclusion in Section 4(4)(d)(ii) had to be deducted, with the technical charges valued on an ex-duty basis. The assessable value was therefore to be computed by excluding application software and training charges and by applying the statutory deduction for duties in relation to the technical charges.

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Issues: Whether the value of application software and training charges was includible in the assessable value of the data processing system, and whether duty relatable to technical charges had to be excluded while arriving at the assessable value.

Analysis: The application software supplied with the goods and the charges recovered for training did not form part of the assessable value, in view of the governing valuation principles and the controlling Supreme Court ruling on the treatment of application software. Technical charges were not pursued in the appeal and were treated as includible. While computing the assessable value, the amount referable to duties falling within the statutory exclusion in Section 4(4)(d)(ii) also had to be deducted and the value taken ex-duty in respect of the technical charges.

Conclusion: The assessable value was to be worked out by excluding the value of application software and training charges, and by adopting an ex-duty basis for the technical charges.

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