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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

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