Skip to main content

Cross-border Trade Valuation - Exported Goods

In last month’s Cross-border Trade Val-bytes, we understood Cross-border Trade Valuation for exported goods and for imported goods in a nutshell. I hope my previous article helps you to understand the significance of valuation in international trade. In this month’s article, we will focus on the valuation of exported goods in a more comprehensive manner.

Determination of Export Value: 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.

Computed Value Method: If the value cannot be determined as above, it shall be based on the Computed Value Method. This includes the cost of production, manufacture or processing of export goods, charges if any for the design or brand, and an amount towards profit.

Residual Method: If the value cannot be determined under the Determination of Export Value and Computed Value Method, it can be calculated based on the local market price.

However, it may happen, that while exporting the goods, the Customs officer may reject the value of the goods if he finds the valuation suspicious. In that case, the exporter has to furnish additional evidence to prove the previously calculated value is correct.

I hope this concise article will add value to your knowledge. In my next column, we shall see the valuation for imported goods. Until then goodbye.

If you have any suggestions or 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!

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

Comments

Popular posts from this blog

Understanding EORI: Essential Insights for Businesses Engaged in International Trade

In the ever-evolving landscape of global trade, businesses must navigate a complex web of regulations and procedures. One critical aspect of this framework is the Economic Operators Registration and Identification (EORI) system. This article aims to demystify EORI, explaining its purpose, benefits, and the process of obtaining and using it effectively. What is EORI? The Economic Operators Registration and Identification (EORI) system is a mechanism implemented by the European Union (EU) to streamline and standardize the identification of economic operators involved in international trade. An economic operator is any business entity or individual that engages in activities related to the import or export of goods. The EORI number is a unique identifier assigned to these operators , facilitating smoother interactions with customs authorities across EU member states. Purpose of EORI The primary purpose of the EORI system is to simplify customs procedures by ensuring that each ...

Prime Minister Modi's Upcoming Visit to Russia: A Trade Perspective

Introduction On July 8, 2024, Indian Prime Minister Narendra Modi is set to embark on a three-day visit to Russia. This visit holds significance as it marks his first bilateral engagement since taking office for a rare third consecutive term as India's prime minister. Traditionally, Modi has chosen neighboring countries for his initial foreign visits, emphasizing India's neighborhood as a foreign policy priority. However, this time, the choice of Russia and Austria may seem unconventional. Let's delve into the reasons behind this decision and explore the trade implications of Modi's visit to Russia. Background: India-Russia Relations India and Russia share a longstanding relationship that dates back to the Indo-Soviet Treaty of Peace, Friendship, and Cooperation signed in 1971. Despite the collapse of the Soviet Union in 1991, their ties have endured, with annual India-Russia summits playing a crucial role in anchoring this partnership. Defense and energy cooperation ha...

India, UK and DCTS (Developing Countries Trading System)

Introduction The United Kingdom's recent introduction of the Developing Countries Trading System (DCTS) marks a significant shift in its trade policies. The move aims to revamp the country's trading relationship with developing nations, including India. However, because of this change, Indian goods worth $960 million are set to lose their concessional duty access to the UK market. This article delves into the implications of the DCTS on Indian exporters, analyzing the challenges they face and the potential strategies they can adopt to mitigate the impact. Understanding the Developing Countries Trading System (DCTS) The DCTS is a novel trade preference scheme introduced by the UK after its departure from the European Union. As part of its independent trade policy, the UK seeks to reconfigure its relationships with developing nations by implementing this new system. The DCTS aims to provide preferential market access to a carefully selected group of countries with the greates...