customs implication on transfer pricing adjustment india

[Sudhir M]

What are the customs implications of the price paid to a foreign entity from which goods are imported, in the event of a retrospective transfer pricing adjustment at year-end? Do we need to pay customs duty.

[YAGAY and SUN]

It will have an impact on your SVB Assessment, if you are dealing with Related Parties as mentioned in Customs Circular No. 05/2016-Customs. You need to disclose this new development to the jurisdictional customs Authorities with whom your SVB Assessment is being conducted/or already done.  In this matter, please do contact with your Customs Broker who in-turn have discussions with the Jurisdictional Customs Authorities to conclude the impact on valuation of the goods which had been imported by your Company.

AI Summary

Customs valuation impact: disclose retrospective transfer pricing adjustments to enable reassessment of dutiable value and liability.
Retrospective transfer pricing adjustments to prices paid to foreign related parties can affect customs valuation and Special Valuation Branch (SVB) assessments; taxpayers must disclose such developments to the jurisdictional customs authorities and consult their customs broker so the customs office can determine whether the declared dutiable value and customs liability require reassessment.