Piyush Pvt. Ltd. have imported a machine from U.K. and furnished following particulars in relation to such import: S. No. Particulars Amount 1. F.O.B. cost of the machine 30,000 U.K. Pounds 2. Freight (air) 3,000 U.K. Po

Answer 6A(i) Computation of assessable value of goods for customs purpose for Piyush Pvt. Ltd. Particulars Amount UK Pounds Amount (₹) FOB cost of Machine 30,000 21,09,000 Add: Engineering and Design charges (paid to a firm in UK) 500 35,150 Add: License fee relating to imported goods payable by the buyer as a condition of sale (20% on 30,000 UKP) 6,000 4,21,800 36,500 Sub-Total (36,500 UKP x ₹ 70.30) 25,65,950 As per explanation to section 14(1) of the customs act, 1962, assessable value should be calculated with reference to the rate of exchange notified by the CBIC (i.e ₹ 70.30) Add: Material and components supplied by the buyer free of cost 10,000 FOB value as per customs 25,75,950 Add: Air Freight (since air freight is ascertainable and is lower than 20% of FOB value, actual sum to be considered. [3000 x ₹ 70.30 = ₹ 2,10,900]) 2,10,900 Add: Insurance paid to the insurer in India 6,000 CIF Value / Assessable Value 27,92,850 Note: License fee 20% of FOB cost relating to imported goods payable as a condition of sale and is computed @ 20% of "F.O.B. Cost".