30 June 2013
I have alredy gone through the link.The link also does not give complete answer to the query.Because the link say CIF vaue means CIF price paid or payable to the Exporter....... the price inludes Freight and Insurance cost which means the expert belives that Import is always done by CIF value it not correct,import is also done on Ex works price,FOB (Free On Board) Price,C&F ( Cost and Freight) price.The Expert does not say how to calculate assessable if expoert is on EX work,FOB or on C&F basis The Expert also does not say how to calculate assessable if the import is on Ex work,FOB or C&F and the importer does not submit proof of Freight paid or payable and Insurance charge.
Import duty is calculated on the assessable value of goods imported. In simple terms, 1% added to CIF value of imports is assessable value. Let me explain the method of calculating assessable value by customs department. For example, you have imported goods worth USD 1000.00 FOB value. If any design and development charges involved, the same cost is added – say USD 100.00. In order to find CIF value, the freight and insurance cost are to be added. 20% of FOB value is taken as freight. Means USD 200.00. Insurance is calculated as 1.125% - USD 13.00 (rounded off). The total amount of CIF value works out to USD 1313.00. If any local agency commission involved, the same also is added on CIF value of goods - say 2% on FOB – USD 20.00. So the total amount works out to USD 1333.00. The said value of USD 1333.00 is converted in to local currency . The exchange rate of foreign currencies is decided time to time by customs and issues notification frequently. Once after adding up 1% on the said amount you will get assessable value. The duty amount is calculated on the said assessable value.
My question is the Customs will consider 20% of FOB as freight in all cases of Import on FOB basis? of which amount the Customs will take 1.125% as insurance charges?.
Secondly your reply of Commission as the commission does not exceed 12.5% of Invoice value is NOT CORRECT NOW this is an old provision.What is new provision?
22 August 2013
If the air freight amount is not ascertainable or if the actual air freight is more than 20% of FOB,then 20% of FOB is considered as the air freight for calculation of CIF value.
as per Transaction value of imports (14)& Rule 3(1) read with rule 10
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