Tax impact of International trade

[Lakshmi Narayan Padhy]

Hello Sir, Company A Ltd of India purchased Moulds from China & sent to Job worker of Japan for manufacturing finished goods using such moulds. The Mould never come to India. Finally finished goods are imported from Japan to India. Please explain the taxability and accounting treatment of moulds purchase.

AI Summary

Customs Duty on Moulds: Apportion Cost for Goods Made in Japan, Imported to India; Follow Valuation Rules. A discussion on the tax implications of international trade involves a scenario where an Indian company, Company A Ltd, purchases moulds from China and sends them to Japan for manufacturing finished goods, which are then imported to India. The moulds never enter India. A respondent advises that customs duty must be paid on the apportioned cost of the moulds based on their use in manufacturing the imported goods. The cost should be apportioned over the production quantity and added to the transaction value to determine the correct customs value. The discussion references specific rules for customs valuation and apportionment methods.