Meaning
Total monetary basis upon which import duties and taxes are calculated by the port authorities represents the full economic cost of the cargo at the point of entry. The dutiable customs value comprises the price paid or payable for the goods plus specific additions like freight and insurance. Regulations mean that the declared figure captures the actual value of the transaction.
Valuation Method
Primary assessment relies on the transaction value method provided the buyer and seller are not related in a way that influences the price. If the declared price appears distorted, customs may use the value of identical or similar goods sold for export to the same territory. This hierarchy of methods provides a structured approach to identifying the market price when direct evidence is unavailable.
Fairness drives the system.
Mandatory Adjustment
Certain costs incurred by the buyer must be added to the invoice price to reach the final dutiable customs value. These include commissions and packing costs. Royalties related to the goods that the buyer pays as a condition of sale also increase the taxable total.
Deduction Rule
Costs incurred after the arrival of the goods at the port of discharge are typically removed from the calculation. Expenses for installation or maintenance performed within the country do not form part of the dutiable customs value if they are separately identifiable. This separation protects the importer from paying duties on domestic service activities.
