AI Drafter 
TaxTMI 
TaxTMI 
The Schedule
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....to Rule 4 Price actually paid or payable The price actually paid or payable is the total payment made or to be made by the buyer to or for the benefit of the seller for the imported goods. The payment need not necessarily take the form of a transfer of money. Payment may be made by way of letters of credit or negotiable instruments. Payment may be made directly or indirectly. An example of an indirect payment would be the settlement by the buyer, whether in whole or in part, of a debt owed by the seller. Activities undertaken by the buyer on his own account, other than those for which an adjustment is provided in Rule 9, are not considered to be an indirect payment to the seller, even though they might be regarded as of benefit to the seller. The costs of such activities shall not, therefore, be added to the price actually paid or payable in determining the value of imported goods. The value of imported goods shall not include the following charges or costs, provided that they are distinguished from the price actually paid or payable for the imported goods : (a) Charges for construction, erection, assembly, maintenance or technical assistance, undertaken after import....
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....alue. 2. Rule 4(3)(a) provides that where the buyer and the seller are related, the circumstances surrounding the sale shall be examined and the transaction value shall be accepted as the value of imported goods provided that the relationship did not influence the price. It is not intended that there should be an examination of the circumstances in all cases where the buyer and the seller are related. Such examination will only be required where there are doubts about the acceptability of the price. Where the proper officer of customs has no doubts about the acceptability of the price, it should be accepted without requesting further information from the importer. For example, the proper officer of customs may have previously examined the relationship, or he may already have detailed information concerning the buyer and the seller, and may already be satisfied from such examination or information that the relationship did not influence the price. 3. Where the proper officer of customs is unable to accept the transaction value without further inquiry, he should give the importer an opportunity to supply such further detailed information as may be necessary to enable him to exa....
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....rs may vary from case to case, it would be impossible to apply a uniform standard such as a fixed percentage, in each case. For example, a small difference in value in a case involving one type of goods could be unacceptable while a large difference in a case involving another type of goods might be acceptable in determining whether the transaction value closely approximates to the "test" values set forth in rule 4(3)(b). Notes to Rule 5 1. In applying rule 5, the proper officer of customs shall, wherever possible, use a sale of identical goods at the same commercial level and in substantially the same quantities as the goods being valued. Where no such sale is found, a sale of identical goods that takes place under any one of the following three conditions may be used : (a) a sale at the same commercial level but in different quantities; (b) a sale at a different commercial level but in substantially the same quantities; or (c) a sale at a different commercial level and in different quantities. 2. Having found a sale under any one of these three conditions adjustments will then be made, as the case may be, for : (a) quantity factors only; (b) commercial lev....
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....ities. Sale quantity Unit price Number of sales Total quantity sold at each price 1-10 units 100 10 sales of 5 units, 5 sales of 3 units 65 11-25 units 95 5 sales of 11 units 55 Over 25 units 90 1 sale of 30 units, 1 sale of 50 units 80 The greatest number of units sold at a price is 80, therefore, the unit price in the greatest aggregate quantity is 90. 3. As another example of this, two sales occur. In the first sale 500 units are sold at a price of 95 currency units each. In the second sale 400 units are sold at a price of 90 currency units each. In this example, the greatest number of units sold at a particular price is 500, therefore, the unit price in the greatest aggregate quantity is 95. 4. A third example would be the following situation where various quantities are sold at various prices. (a) Sales Sales quantity Unit price 40 units 100 30 units &nbs....
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....d be taken as a whole. The figure for the purposes of this deduction should be determined on the basis of information supplied by or on behalf of the importer unless his figures are inconsistent with those obtaining in sales in India, of imported goods of the same class or kind. Where the importer's figures are inconsistent with such figures, the amount for profit and general expenses may be based upon relevant information other than that supplied by or on behalf of the importer. 7. The "general expenses" include the direct and indirect costs of marketing the goods in question. 8. Local taxes payable by reason of the sale of the goods for which a deduction is not made under the provisions of rule 7(1)(iii) shall be deducted under the provisions of rule 7(1)(i). 9. In determining either the commissions or the usual profits and general expenses under the provisions of rule 7(1), the question whether certain goods are "of the same class or kind" as other goods must be determined on a case-by-case basis by reference to the circumstances involved. Sales in India, of the narrowest group or range of imported goods of the same class or kind, which includes the goods being valued, ....
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....eing valued supplied by or on behalf of the producer. It is to be based upon the commercial accounts of the producer, provided that such accounts are consistent with the generally accepted accounting principles applied in the country where the goods are produced. 3. The "cost or value" shall include the cost of elements specified in clauses (1)(a)(ii) and (1)(a)(iii) of rule 9. It shall also include the value, apportioned as appropriate under the provisions of the relevant note to rule 9, of any element specified in rule 9(1)(b) which has been supplied directly or indirectly by the buyer for use in connection with the production of the imported goods. The value of the elements specified in rule 9(1)(b)(iv) which are undertaken in India shall be included only to the extent that such elements are charged to the producer. It is to be understood that no cost or value of the elements referred to in this paragraph shall be counted twice in determining the computed value. 4. The "amount for profit and general expenses" referred to in clause (b) of rule 7A is to be determined on the basis of information supplied by or on behalf of the producer unless the producer's figures are ....
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....ation can be provided, should be examined. For the purposes of rule 7A "goods of the same class or kind" must be from the same country as the goods being valued.] Note to Rule 8 1. Value of imported goods determined under the provisions of rule 8 should to the greatest extent possible, be based on previously determined customs values. 2. The methods of valuation to be employed under rule 8 may be those laid down in [rules 4 to 7A], inclusive, but a reasonable flexibility in the application of such methods would be in conformity with the aims and provisions of rule 8. 3. Some examples of reasonable flexibility are as follows : (a) Identical goods. - The requirement that the identical goods should be imported at or about the same time as the goods being valued could be flexibly interpreted; identical imported goods produced in a country other than the country of exportation of the goods being valued could be the basis for customs valuation; customs values of identical imported goods already determined under the provisions of [rules 7 and 7A] could be used. (b) Similar goods. - The requirement that the similar goods should be imported at or about the same time as the....
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....ed by the importer. 4. As an illustration of the above, an importer provides the producer with a mould to be used in the production of the imported goods and contracts with him to buy 10,000 units. By the time of arrival of the first shipment of 1,000 units, the producer has already produced 4,000 units. The importer may request the proper officer of customs to apportion the value of the mould over 1,000 units, 4,000 units or 10,000 units. Rule 9(1)(b)(iv) 1. Additions for the elements specified in rule 9(1)(b)(iv) should be based on objective and quantifiable data. In order to minimise the burden for both the importer and proper officer of customs in determining the values to be added, data readily available in the buyer's commercial record system should be used in so far as possible. 2. For those elements supplied by the buyer which were purchased or leased by the buyer, the addition would be the cost of the purchase or the lease. No addition shall be made for those elements available in the public domain, other than the cost of obtaining copies of them. 3. The case with which it may be possible to calculate the values to be added will depend on a particular firm's....