TaxTMI 
TaxTMI 
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.
Tax impact of International trade
27 May 2023 
2 Replies 
1098 Views Asked by
Guest 
Apportioned cost of moulds must be included in transaction value, affecting customs duty on imported finished goods.
The apportioned cost of moulds supplied for use in production abroad must be added to the transaction value of imported finished goods under Rule 10(1)(b)(ii). The moulds' value equals acquisition cost from an unrelated seller or production cost (adjusted for prior use if applicable), and must be apportioned reasonably over units produced-options include charging to the first shipment, units produced to date, or anticipated production-subject to documentation; accounting treatment requires capitalisation and systematic allocation so customs duty is calculated on the adjusted transaction value. (AI Summary)
The apportioned cost of moulds supplied for use in production abroad must be added to the transaction value of imported finished goods under Rule 10(1)(b)(ii). The moulds' value equals acquisition cost from an unrelated seller or production cost (adjusted for prior use if applicable), and must be apportioned reasonably over units produced-options include charging to the first shipment, units produced to date, or anticipated production-subject to documentation; accounting treatment requires capitalisation and systematic allocation so customs duty is calculated on the adjusted transaction value. (AI Summary)