TaxTMI 
TaxTMI 
Assessment under the Special Valuation Branch (SVB) of Indian Customs
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....ssessment under the Special Valuation Branch (SVB) of Indian Customs<br>By: - YAGAY andSUN<br>Customs - Import - Export - SEZ<br>Dated:- 25-7-2025<br>Assessment under the Special Valuation Branch (SVB) of Indian Customs is a specialized procedure used when goods are imported between related parties or involve transactions that may affect the declared value of the goods. The aim is to ensure correc....
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....t valuation and prevent under-invoicing or transfer pricing manipulation. Here's a comprehensive guide on Checklist, Documentation, Precautions, and Preparation for assessment under SVB: 1. Checklist for SVB Assessment When you're importing from a related party or under certain circumstances (e.g., royalty payments, technical fees), the following items should be part of your SVB assessment prep....
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....aration checklist: A. Triggering Criteria * Importer and exporter are related (as per Rule 2(2) of Customs Valuation Rules, 2007). * There are any of the following: * Royalty / license fee payments * Buyback / technical assistance agreements * Free-of-cost supplies by buyer * Post-importation services * Parties with inter-company transactions or influence B. Documents Required (Ini....
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....tial Filing) * SVB Questionnaire (duly filled) * Covering letter requesting SVB order * Declaration of relationship * Copy of Importer Exporter Code (IEC) * Copy of PAN * Copies of: * Agreements (e.g., royalty, technical collaboration, buyback, distribution) * Transfer pricing report (if applicable) * Invoices and packing lists (samples) * Bill of Entry (at least 5 recent ones)....
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.... * Audited financial statements of last 3 years * CA certificate for royalty / license fee payments 2. Key Documentation Details A. SVB Questionnaire * Must be filled carefully - includes detailed questions about the nature of relationship, pricing mechanisms, cost elements, etc. B. Inter-company Agreement * Must be aligned with actual practices and consistent with TP report * Should ....
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....clearly define: * Scope of services * Payment terms * Licensing clauses * Any cost sharing arrangements C. Transfer Pricing Report * Should reflect the arm's length nature of the transaction * Should include CUP (Comparable Uncontrolled Price) method or any other method adopted 3. Precautions to Take * Avoid inconsistencies in documentation (e.g., agreement vs. invoice vs. actual t....
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....ransaction). * Ensure all agreements are signed and dated properly before submission. * Cross-check declarations - e.g., any royalty should also reflect in the invoice if applicable. * Be prepared to justify: * Why the declared value reflects true transaction value * Why the relationship has not influenced the price * Always maintain copies of all submitted documents. 4. Preparation S....
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....trategy A. Before Importing * Identify if your vendor is related - check under Rule 2(2). * Review if your transaction has any special payments outside the invoice (royalty, services, etc.). * Review agreements and pricing to ensure clarity. B. At Time of Import * Declare relationship in the Bill of Entry. * Mention in declaration that SVB is being initiated / already exists. C. Post ....
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....Filing * Keep track of communication from SVB department. * Cooperate during the inquiry; provide timely clarifications. * Attend personal hearings if called. 5. Post SVB Order * Once SVB order is issued, its reference must be mentioned in future Bills of Entry. * Review order for any condition or direction (e.g., periodic reporting). * SVB orders are valid for a defined period unless....
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.... a significant change occurs. SVB Assessment Timeline Generally, the process can take 3 to 6 months, but can vary depending on: * Jurisdiction * Completeness of documentation * Complexity of the case Pro Tips * Consult a customs/indirect tax expert for complex cases. * If multiple related party vendors exist, prepare a consolidated TP study. * Regularly monitor the valid....
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....ity of SVB orders and any changes in agreements. ***<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....