Computation of Value Addition where some Materials are Supplied Free of Cost Determination of Drawback under Rule 6 or Rule 7 of Drawback Rules

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.... Date. 26.10.2006 PUBLIC NOTICE NO. 62/2006 Sub : Computation of Value Addition where some Materials are Supplied Free of Cost Determination of Drawback under Rule 6 or Rule 7 of Drawback Rules reg. Attention of all the Importers, Exporters, CHAs and Members of the Trade is invited to Ministrys Circular No. 25/2006 Customs vide F. No. 602/9/2005-DBK dated 19.09.2006 regarding Computation ....

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....aterials used in the manufacture of such goods. In this connection, it has been brought to the notice of the Ministry that in the business of exports sometimes the main raw material is supplied free of cost by the overseas buyer for maintaining the quality of the final product. In such cases the notional value of the free of cost material is declared to Customs only for the purpose of payment of d....

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....rt value (FOB value) of goods and the CIF value of inputs for the purpose of calculation of value addition. 4. The matter has been examined by the Ministry. Is has been observed that for the sake of equity the value of the free of cost material should be added both to the FOB value of goods and CIF value of materials or this value should not be added to the FOB and CIF values at all. If this is....