Workshop on New Valuation Rules at Bangalore
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In order to familiarize the exporters with the proposed custom valuation rules, FIEO Karnataka Chapter organized a Workshop on ‘Draft Export Import Valuation Rules, 2007 of Customs’ at Bangalore on 20th April. The Workshop also discussed various changes made in the Foreign Trade Policy announced a day before. More than 70 member exporters of the Federation participated in the Workshop. Mr. Francis Antony, Jt. DGFT, Bangalore made a presentation on various changes incorporated in the Foreign Trade policy. He said several positive measures like exemption or reimbursement |
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Mr. G Shivadass, Senior Advocate, M/s Lakshmi Kumaran & Sridharan (standing) making a presentation. In his right are Mr. Francis Antony, Joint DGFT, Bangalore; Mr. Nilesh Gupta, Joint Commissioner of Customs, and Mr. Unnikrihnan K, Joint Director, FIEO. |
of service tax, continuation of DEPB scheme, procedural simplification reducing documentation etc. have been announced under the new annual supplement to the Policy. On the issue of pending drawback reimbursements to exporters, he agreed that several such cases were pending for want of funds but he assured that the Govt. was serious to pay interest for delays in settlement of claims.
Mr. Nilesh Gupta, Jt. Commissioner of Customs in his presentation said that the Draft Customs Valuation Rules 2007 had been circulated to seek feedback from the trade. He suggested the participants to study the details of the Draft (also available at at http://www.cbec.gov.in/cal/draft-arc/export-val-rules-2k7.htm) and send their comments to the customs department by mailing at indiacustoms@gmail.com.
Mr. G Shivadass, Senior Advocate, M/s. Lakshmi Kumaran and Sridharan in his presentation said that the valuation of goods for the purpose of payment of customs duty at the time of import is done in terms of Section 14 of Customs Act, 1962 and the Customs Valuation Rules, 1988. "While Section 14 of the Customs Act provides for arriving at the ‘deemed,’ Valuation Rules lay down the concept of ‘transaction value.’ The Budget 2007 proposes to amend Section 14 to incorporate the concept of transaction value. The Government has, in the meanwhile, come out with the Draft for Valuation Rules for the trade to study and send comments and suggestions before the final decision on the subject is taken." He informed.
Explaining the intention behind the proposed amendment to the Valuation Rules, Mr. Shivadass said the Finance Ministry aims to prevent the alleged misuse of the existing duty entitlement passbook (DEPB) or drawback schemes and also to curtail money laundering through merchandise export routes.
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The Budget 2007-08 announces that ‘transaction value’ would be the basis for valuation of exported and imported goods and not the `deemed value’. According to the Budget, the transaction value of imported goods would include any amount that the buyer is liable to pay for costs and services, including commissions and brokerages, engineering, design work, royalties and licence fees, costs of transportation to the place of importation, insurance and handling charges, etc. In case, where there is no sale or the transaction value of the imported goods or the export goods is not determinable, the value of such goods will be |
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A view of the participants |
determined in accordance with the Valuation Rules made in this regard.
Mr. Shivadas opines that as the customs duties have come down significantly, the scope for misutilisation of schemes like DEPB or drawback has also diminished. Besides, he says, the current environment does not encourage overvaluation of exports and the existing DEPB and drawback schemes have safeguards like value caps. He apprehends that the new Valuation Rules may lead to increase in transaction costs.
