We are pleased to
release a Tax Alert on the Supreme Court (SC) decision [2015-TIOL-79-SC-CUS]
wherein the SC has held that the proviso (ii) to Rule 9(2) of Customs
Valuation (Determination of Price of Imported Goods) Rules, 1988, prescribing
the notional fixation of loading, unloading and handling charges at 1% of the
FOB value, has been held as ultra vires, especially when such actual costs are
ascertainable.
The SC has over ruled the Madras High Court Division Bench ruling which confirmed notional fixation of loading, unloading and handling charges at 1% of Free on Board (FOB) value for Customs valuation.
The Apex Court ruling will benefit importers significantly as the adjustment to the transaction value will reduce in cases where the actual handling charges can be ascertained in respect of imports.
The concern of industry on higher burden of Customs duty due to notional addition of 1% to the value of imports seems to be finally addressed.
The SC has over ruled the Madras High Court Division Bench ruling which confirmed notional fixation of loading, unloading and handling charges at 1% of Free on Board (FOB) value for Customs valuation.
The Apex Court ruling will benefit importers significantly as the adjustment to the transaction value will reduce in cases where the actual handling charges can be ascertained in respect of imports.
The concern of industry on higher burden of Customs duty due to notional addition of 1% to the value of imports seems to be finally addressed.
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