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Purchase value in case of import

yashsr (CA) (2285 Points)

19 July 2012

Hello,

What shall be my purchase value in case of imports? I actually convert the amount of purchases from dollars to rupees using the exchange rate given in RBI website on the date of purchase. Is this correct? Or should I use FOB value instead? I prefer not to use FOB value since the Customs Dept does hike the purchase value by some % as it has its own norms of valuation.

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7 Replies

Raghav (Audit & Accounts ) (30 Points)
Replied 19 July 2012

In case of Import in the purchase means the Purchase Value (USD) as per the Exchange rate of the Custom clearance date + the custom duty (BCD+CVD+EDU cess on Custom +Sec high Edu cess on Custom + SAD ). Logistic charges will also added to the purchase price.

So this is the total purchase in the books

Also the CHA will send the Import check list in which the Invoice Value , disc , exchnage rate is mentioned so take that to calculate the purchases.

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yashsr (CA) (2285 Points)
Replied 20 July 2012

Hello Raghav,

So you mean instead of taking the RBI's rate of exchange as on the date of purchase, the exchange rate mentioned in the custom documents should be taken? Or do I have an option to take either as long as I'm doing it consistently?

Raghav (Audit & Accounts ) (30 Points)
Replied 20 July 2012

Hi Yashsr The rate should be mentioned on the Import check list & the Invoice of the purchase date. So on that basis the Value of purchase can easily be determined. Now to calculate the custom duty take the Value * Exchange rate mentioned on invoice/Import checklist. Also add 1% Landing charges after the Purchase value or Assessable Value than the custom duty will be calculated. I hope it is helpful.

Raghav (Audit & Accounts ) (30 Points)
Replied 20 July 2012

Actually the Exchange rate mentioned the Bill of Entry for Home Consumption should be taken as the rate for purchase value calculation & on that basis the custom duty is calculated.

Elumalai (Manager) (21 Points)
Replied 21 July 2016

Import Purchase Value is Foreign Supplier USD Value * exchange rate as per BOE. For arriving cost of import purchase only we have to add the Customs Duty minus CVD availed on that + Ocean Freight (if FOB basis) + Insurance (if FOB basis) + C & F Charges etc.

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Naresh Infinitheist Vajawat (2 Points)
Replied 28 November 2018

Hi All,
A told earlier - the USD value mentioned most of the time is higher than the RBI rate. I want to know what should i do in the below scenario.

Total Invoice - 1000 USD
USD Conversion in BOE - 75
USD Conversion as per RBI on that day - 73.75

I take my purchase into my book on the above day should my total invoice value in INR be 75000 or 73750.

Is there a document which I can refer to validate the above ?

Abhishek (Chartered Accountant) (149 Points)
Replied 09 January 2019

In the above case , BOE rate is 75 and the USD Conversion rate is 73.75. BOE i.e.75 rate is only used for the purpose of calculation of Custom duty and other duties and IGST.

Therefore , rate of USD 73.75 wil be used to account purchase in the books.