No. Not required. Let us see relevant part of Customs Valuation (Determination of Price of imported Goods) Rules, 2007 Rule 10 Cost and services –
2) For the purposes of sub-section (1) of section 14 of the Customs Act, 1962 (52 of 1962) and these rules, the value of the imported goods shall be the value of such goods, and shall include -
(a) the cost of transport, loading, unloading and handling charges associated with the delivery of the imported goods to the place of importation;
(b) the cost of insurance to the place of importation:
Provided that where the cost referred to in clause (a) is not ascertainable, such cost shall be twenty per cent of the free on board value of the goods:
proviso (1) where the cost of transport of imported goods is ascertainable, Such cost shall not exceed 20% of free on board value of the goods. Another where this value is not ascertainable, it shall be 20% of free on board value of goods plus cost of insurance.
Whether the freight irrespective mentioned separately or not, should be considered at the rate of 20% of FOB value while discharging the liability?
Bare perusal of these provisions makes it clear that the value of imported goods shall be the transaction value of such goods i.e. the price which is actually paid or is payable at the time of import with any other amount as mentioned in the proviso to Section 14 above to be added to the said transaction value.
Where there is a clear bifurcation about the amount of air freight involved and that the same has been paid by the supplier and has been included in the C & F value paid by the Importer, the amount is absolutely ascertainable. In such case the amount has not to exceed 20% of FOB value. When actual air freight is much less than 20% no question arises for enhancing this value to the extent of 20%, in view of the words “shall not exceed 20% of freight on board value of goods”.
M/S. RAJASTHAN PRIME STEEL, PROCESSING CENTRE PVT. LTD., BHARAT KUMAR, SANDEEP RAGHAV VERSUS C.C., NEW DELHI, CESTAT NEW DELHI order pronounced on 05.09.2018
Note : In above article we have discussed only about air freight and not Ex works costs which has anyway to be declared under misc expenses.
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