Implementation of decision of Hon’ble Supreme Court in case of M/s Fiat India ltd – reg .

Transaction value rejection limited to FIAT like facts; sub cost sales not automatically subject to reassessment under valuation rules.

The circular limits rejection of declared transaction value to cases matching the factual scope of the FIAT judgment and excludes a general rule that sub cost selling alone permits rejection. Officers should verify loss making pricing during audits, using CAS 4 for cost calculations and accepting accountant certified data unless Commissioner authorises cost audit or summons. The circular treats abnormally low pricing as extra commercial consideration for post judgment sales-potentially amounting to wilful misstatement-but advises that for periods before the judgment extended limitation may not apply where FIAT alone is the basis for scrutiny.