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 andSUN]

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

Retrospective Transfer Pricing Adjustments Affect SVB Assessment for Related Parties, Per Customs Circular No. 05/2016-Customs. A query was raised about the customs implications of retrospective transfer pricing adjustments in India, specifically whether customs duty needs to be paid on the price paid to a foreign entity for imported goods. A response indicated that such adjustments affect the Special Valuation Branch (SVB) Assessment if dealing with related parties, as per Customs Circular No. 05/2016-Customs. It is advised to inform the jurisdictional customs authorities about this development and consult with a customs broker to assess the impact on the valuation of imported goods.