Manish Choudhary, Deputy Commissioner, Ministry of Finance, Government of India, B.Tech (GGSIPU), LLB (DU), PG Diploma (ILI), EE (ISB) and presently pursuing PG Diploma (ISIL)
ABSTRACT
In international transactions, customs duty is levied on the transaction value, which is the price actually paid or payable, where the buyer and seller are not related, and price is the sole consideration. The transaction value declared by an importer can be rejected during assessment based on cogent reasons. If rejected, the transaction value is typically re-determined based on the transaction value of similar goods in contemporaneous imports. This paper aims to explore whether the definition of similar goods in a policy statement should be interpreted expansively, or else, derived from the WTO valuation agreement, which is given effect to by the policy (Foreign Trade Policy) and enacting statute (Customs Valuation Rules). During assessment, bills of entry can be modified by way of amendment or re-assessment. This paper will examine the extent of such amendment vis-à-vis re-assessment. With the advent of GST, end-to-end credit transfer has become possible, resulting in numerous cases of evasion of input tax credit (ITC) through under-invoiced imports and/or over-invoiced exports. This paper will explore how technology can be employed to tackle this menace. By analyzing relevant provisions and case laws, this paper aims to answer the above questions and similar issues.
Keywords: Transaction value, Contemporaneous imports, Similar goods, WTO Valuation Agreement, Foreign Trade Policy, Customs Valuation Rules, Bills of entry, Amendment, Re-assessment, GST, Input tax credit (ITC), Under-invoiced import, Over-invoiced export
