ABC Ltd. India imported a machine from Smith Corporation USA for inhouse use in the factory. The price of the machine as per the original agreement was 15,000 USD and the machine was shipped on 1st Jan. 2018. While the m
CS Executive · Tax Laws · PYQS · June 2019
ABC Ltd. India imported a machine from Smith Corporation USA for inhouse use in the factory. The price of the machine as per the original agreement was 15,000 USD and the machine was shipped on 1st Jan. 2018. While the machine was in transit, ABC Ltd. India persuaded the exporter to grant a discount of 10% on the original price and the agreement was fianlised on 20th Jan. 2018. The machine reached Chennai port on 15th Feb., 2018. The assessing authorities calculated the assessable value on the basis of original price. ABC Ltd., approach you for suitable advice. Do you agree with the action of assessing authorities ? Give reference of decided court case, if any.
Answer & Explanation:
The action of the assessing authorities is factually wrong as the transaction value is considered at the time and place of importation as was also decided in the case of Gujarat Heavy Chemical vs. Commissioner of Customs, 2004 where it was contended that the import is complete when the goods reaches the Indian territory. Since the price was mutually revised between ABC Ltd. and Smith Corporation, while the goods were in transit, therefore revised price should be considered for arriving at the assessable value.
Topics: Customs Act, 1962
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