duty on Extended warranty charges

This query is : Resolved

PRAKASH C K (Querist)
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10 December 2009 Hello to all,

I hereby request any one to clarify the following.

1. What is the % of duty payable on Import of Electronics goods to India along with extended warranty charges ie. If the Product Imported to India for USD 500.00 and Extended Warranty charges USD 200.00 for additional 2 years from the date of Import. Will it attract duty for Extended Warranty components USD 200.00?
2. If the Product was imported to India previously and we request to make payment for extended Warranty charges alone, will it attract duty on AMC? Here the product will not move through Cutoms but How to make remittance to overseas Supplier towards Extended warranty charges.

Regards.
C.K.PRAKASH,

SANJAY JAIN

SANJAY JAIN (Expert)
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11 December 2009 As per the Customs valuation provisions, the duty is levied upon the transaction value that no doubt includes warranty charges if there is single contract for supply of machine for USD 500.00 and Warranty for USD 200.00. The Customs duty is leviable upon USD 700.00.

If the contract is bifurcated, means AMC is excluded and not declared in the invoice at the time of importation, then no Customs duty is levied upon USD 200.00 payable for AMC. Though for getting AMC service from out side India shall attract service tax in reverse mechanism in terms of Section 66A of Finance Act,1994.

For further query, feel free to write sanjayinfbd@yahoo.com(M-09350048731)