Payment of Tooling Amortisaton to Foreign Supplier

[Pradeep Jain]

Dear Sir,

We want to import the automobile components for overseas supplier. In this connection toolings has been developed by the said suppliers. Our components would be produced from these tools. Now we need to pay the value of tooling to the overseas supplier. As  there would be no physical movement of Tools from country to another.

What procedure to be followed to comple the Excise , Customs and FEMA  formalities.

Regards

Pradeep Jain

[YAGAY andSUN]

You may get a certificate from your supplier (who has developed tool for you for manufacturing of components as per your specification) that this tool is your property and is being used for manufacturing of components as per your specification and need.  This tool will not be used by the supplier of components for manufacturing of components of any other party except for your company.

On the basis of such certificate you may remit the foreign exchange to your supplier.

At the time of importation of component into India you would have to share the information of the foreign remittance to the customs authorities for it's inclusion in the assessable value as amortization cost for calculation of Customs duties including CVD.

AI Summary

Customs valuation: include tooling amortisation paid to overseas supplier in assessable value with supplier certificate upon importation. Obtain a supplier certificate confirming the tool is purchaser's property, made to purchaser specifications, and exclusively used for the purchaser; remit foreign exchange to the supplier on that basis; and at importation furnish remittance information to customs so that the tooling amortisation is included in the assessable value of the imported components for calculation of Customs duties including CVD.