Ram Ratan who has imported a machine from UK in India provides the following information and details relating to such machine and requests you to compute the assessable value and of the total amount of payable Custom dut

If Commission paid to local agent is treated as buying commission Computation of Assessable value and of customs Duty Particulars Value in Amount FOB Cost of machine UK Pound 8000 Add: Design and development Charges paid in UK UK Pound 500 Total UK Pound 8500 Total sum in Indian Rs. Exchange rate to be applied as notified by CBIC as on the date of filing of Bill of Entry i.e. 1 Pound of ₹ 120 INR 10,20,000 Add: Commission to the Agent @ 2% of FOB [not to be included as buying commission is not includible as per Rule 10(1)(a)(i) of the Customs Rules] Nil FOB value as per Customs Act 10,20,000 Add: Insurance charges (1.125% of customs FOB as per 3 rd proviso to Rule 10(2)) of Customs Valuation Rules) 11,475 Add: Air freight (restricted to 20% of custom FOB as per 5 th proviso to Rule 10(2)) of Customs Valuation Rules) 2,04,000 Total CIF value being the Assessable Value as per customs 12,35,475 Add: Basic Customs duty @ 20% (1) 2,47,095 Add: SWS @10% of (1) (2) 24,710 Total for Integrated tax u/s 3(7) of the Customs Tariff Act 15,07,280 Add: Integrated tax @12% (3) 1,80,874 Total Imported Cost of the machine 16,88,154 Total customs duty and taxes payable =(1)+(2)+(3) INR 4,52,679 Alternate Answer 4(a) If Commission paid to local agent is treated as other than buying commission Computation of Assessable value and of customs Duty Particulars Value in Amount FOB Cost of machine UK Pound 8000 Add: Design and development Charges paid in UK UK Pound 500 Total UK Pound 8500 Total sum in Indian Rs. Exchange rate to be applied as notified by CBIC of 1 Pound of ₹ 120 10,20,000 Add: Commission to the Agent @ 2% of FOB cost (i.e. 160 x ₹ 120 per pound) 19,200 FOB value as per Customs Act 10,39,200 Add: Insurance charges (1.125% of customs FOB as per 3 rd proviso to Rule 10(2)) of Customs Valuation Rules) 11,691 Add: Air freight (restricted to 20% of custom FOB as per 5 th proviso to Rule 10(2)) of Customs Valuation Rules) 2,07,840 Total CIF value being the Assessable Value as per customs 12,58,731 Add: Basic Customs duty @20% (1) 2,51,746 Add: SWS @10% of (1) (2) 25,175 Total for Integrated tax u/s 3(7) 15,35,652 Add: Integrated tax @12% (3) 1,84,278 Total Imported Cost of the machine 17,19,930 Total customs duty and taxes payable =(1)+(2)+(3) 4,61,199