M/s Global Imports Ltd., a company based in Mumbai, imported a consignment of industrial machinery from Germany on CIF (Cost, Insurance, Freight) basis. Compute the assessable value of goods for the purpose of custom dut

Computation of Assessable Value- Under Section 14 of the Customs Act, assessable value is the transaction value, adjusted as per Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 We are given: FOB: € 50,000 Freight: € 12,000 Insurance: Not available Exchange rate (CBIC): ₹91/€ (as on date of filing Bill of Entry) Let us now compute the CIF Value (Cost + Insurance + Freight): Step 1: Add Freight Freight = €12,000 So, FOB + Freight = €62,000 Step 2: Insurance (Not available) As per Rule 10(2)(b), if insurance is not known, use 1.125% of FOB value Insurance = 1.125% x € 50,000 = €562.50 Step 3: CIF Value in Euro = €50,000 (FOB) € 12,000 (Freight) € 562.50 (Insurance) = €62,562.50 Step 4: Convert to INR using CBIC Rate: Exchange rate is applicable @ €91 (Being as on date of filing of Bill of Entry to be considered). €62,562.50 x ₹91 = ₹56,93,187.50 Step 5: Landing Charges As per new rules (since Feb 2017), landing charges are deemed included → No need to add separately Assessable Value = ₹56,93,187.50 Note: It is assumed that the shipment is from mode other than air and therefore freight is to be taken as actual i.e. 12,000.