Skip to main content

Cross-border Trade Valuation

In last month’s Cross-border Trade Val-bytes, we saw an introduction to Cross-border Trade Valuation. I hope my previous introductory article helps you to understand the significance of valuation in international trade. In this month’s article, we will try to boil down the valuation in a more comprehensive manner.

Valuation is broadly defined into two parts in the form of rules namely:

Customs Valuation (Determination of Value of Exported Goods) Rules, 2007

The value of the export goods shall be based on the transaction value of goods of like kind and quality exported at or about the same time to other buyers in the same destination country of importation or in another destination country of importation adjusted. While determining the value of export goods several factors are taken into consideration like commercial levels, quality levels, differences in composition, quality, and design between the goods to be assessed and the goods with which they are being compared, differences in domestic freight, and insurance charges depending on the place of exportation, etc.

Customs Valuation (Determination of Value of Imported Goods) Rules, 2007

Here, the valuation is based on related party transactions and unrelated party transactions. Many times, during the importation of goods, there are high chances of dumping of goods into importing country. This leads to the imposition of various additional duties such as Anti-Dumping Duty, Safeguard Duty, etc. To prevent the act of dumping, valuation attracts special attention at the time of importation of goods.

I hope this concise article will add value to your knowledge. In my next column, we shall dig down a bit into valuation terminology. Until then goodbye.

If you have any suggestions, advice, or if you wish to refer to any other cross-border trade-related topic, you can always reach out to me here.

Thank you!

Labels:

Comments

Post a Comment

Popular posts from this blog

Practical issues in RoDTEP Scheme

I hope, by now, everybody is aware of what is the RoDTEP Scheme. Assuming that let me highlight some practical questions regarding this scheme. On 28th October 2020 under the chair of Mr. G. K. Pillai, the RoDTEP Committee was formed. The main objective of this committee is to determine the ceiling rates of items covered under the scheme. However, the data of chapter 86, 88, and 89 are still pending from the industry's side. It is predicted that the Remission of Duties and Taxes on Exported Products briefly known as the RoDTEP Scheme is likely to be launched under the new Foreign Trade Policy. The scheme seeks to refund currently un-refunded duties/taxes/levies at the local, state, and central level have borne on the exported products. In view of the above, I have jotted down some key questions which need to be answered, 1.  How to segregate the VAT and Excise Duty leviable on petrol & diesel on export and domestic selling products? 2.  How to segregate the electricity dut...
1 comment
Read more

Drafting Transfer Pricing Legislation: Taxes Covered

Depending on the design of a country’s tax system, application of the arm’s-length principle may be relevant in determining the taxable objects for one or more direct taxes (income tax, corporate tax, profits tax, etc.). Generally, most countries’ transfer pricing legislation has broad application across direct taxes. One notable exception being Ireland, where the transfer pricing legislation introduced in 2010 applies only to certain classes of income for direct tax purposes.  Countries with other specific types of direct taxes governing specific sectors or transactions types (such as a mining income tax) may need to consider application of transfer pricing legislation to them. Typically, this would be achieved through separate provisions being inserted in the relevant taxing acts. However, where a consolidated tax code has been adopted, a single set of legislation may be possible. Transfer pricing provisions may also be necessary for other types of taxes such as a resources royal...
Post a Comment
Read more