Indirect Tax Laws · Valuation under the Customs Act, 1962

Valuation of Export Goods and Date for Determining Rate of Duty (Section 16)

Updated 5 October 2026 · Fact-checked

Export goods are valued at the transaction value: the price actually paid or payable for delivery at the time and place of exportation, if buyer and seller are unrelated and price is the sole consideration. The export duty rate and tariff value are those in force on the date the proper officer permits clearance and loading, or, for other goods, the date of payment of duty.

Understand Valuation of Export Goods and Date for Determining Rate of Duty

Export duty is charged on the value of the goods at a rate. Two questions follow. What is the value? Which day's rate applies? The first is answered by Section 14 and the Customs Valuation (Determination of Value of Export Goods) Rules, 2007. The second is answered by Section 16 of the Customs Act, 1962.

Value. Section 14 says the value of export goods is the transaction value. This is the price actually paid or payable when the goods are sold for export from India, for delivery at the time and place of exportation. Two conditions apply: the buyer and seller are not related (or, if related, the relationship has not influenced the price), and the price is the sole consideration for the sale. The export duty itself is not part of this value. Think of it as the price at the port of loading, typically an FOB price.

Fallback. If the declared value is doubted or the conditions fail, the proper officer moves down the Rules in order: first the transaction value, then the value of similar goods exported at about the same time, then a residual method based on the Rules and the principles of Section 14. You do not jump to a later method unless the earlier one fails.

Tariff value. Under Section 14, the Central Government may fix tariff values for any class of goods. Where a tariff value is notified, duty is calculated on that value, not on the invoice price. The actual price can be higher or lower. It does not matter.

Date. Rates and tariff values change by notification. So the law fixes one date. For goods entered for export under Section 50 (the shipping bill route), it is the date on which the proper officer makes an order permitting clearance and loading of the goods for exportation under Section 51. For any other goods, it is the date of payment of duty. The date the shipping bill was filed, or the date the ship sails, is not the test. Baggage and goods exported by post are dealt with under separate provisions, so do not apply this rule to them.

Key rules to remember

Value of export goods (Section 14): Value = transaction value = price actually paid or payable for goods sold for export, for delivery at the time and place of exportation; Requires unrelated buyer and seller (or relationship not affecting price) and price as sole consideration. Export duty is not included in this value.
Tariff value: Duty = Rate of duty × Tariff value notified by the Central Government; Where a tariff value is notified for the class of goods, it replaces the invoice price for computing duty.
Section 16: date for goods entered under Section 50: Rate and tariff value = those in force on the date the proper officer passes the order permitting clearance and loading under Section 51; This is the let-export order date. It is not the shipping bill date or the sailing date.
Section 16: date for other goods: Rate and tariff value = those in force on the date of payment of duty; Applies to goods not entered for export through a shipping bill under Section 50.
Order of valuation methods: Transaction value → similar goods exported at about the same time → residual method; Move to the next method only when the earlier one cannot be applied or the declared value is rejected on reasonable doubt.

How to solve Valuation of Export Goods and Date for Determining Rate of Duty questions

Use this sequence for any question on export valuation or the rate of export duty. It keeps value and date apart, which is where most marks are lost.

1Identify what is asked: the value, the rate or date, or the duty amount. Often it is all three.
2Check whether a tariff value is notified for the goods. If yes, use it and ignore the invoice price for duty purposes.
3If no tariff value exists, take the transaction value: the price for delivery at the time and place of exportation. Test the two conditions: unrelated parties and price as the sole consideration.
4Remove any export duty included in the price, since duty is not part of the value. Do not add or deduct anything not supported by the facts.
5If the declared value is doubtful or conditions fail, state the next method in order: similar goods, then the residual method.
6Fix the relevant date. If goods are entered under Section 50, use the date of the order permitting clearance and loading. Otherwise use the date of payment of duty.
7Pick the rate and tariff value in force on that date, ignoring changes before or after it.
8Compute duty as rate × value. Write the conclusion in provision-facts-conclusion form.

Quickest way: Three-line check: value, date, rate

When to use it: Use it for short MCQs and for case scenarios with several dates and a notification change in the middle.

Underline every date in the case. Label each one as shipping bill, let-export order, loading, sailing, or payment of duty.
Pick only the let-export order date (for Section 50 goods) or the payment date (for other goods). Cross out the rest.
Take the rate or tariff value in force on that date. Multiply: duty = rate × (tariff value if notified, otherwise transaction value).

Common mistakes in Valuation of Export Goods and Date for Determining Rate of Duty

Using the shipping bill date or the sailing date to fix the rate.
Students carry over the idea that the filing date matters, as it does for imports cleared for home consumption.
Fix: For Section 50 goods, use only the date of the order permitting clearance and loading. Remember: let-export order, not filing and not sailing.
Applying the Section 15 import rule to export goods.
Sections 15 and 16 look alike, and Section 15 turns on the bill of entry presentation date.
Fix: Section 15 is for imports and Section 16 is for exports. For exports there is no bill of entry; the key date is the let-export order or the date of payment of duty.
Calculating duty on the invoice price when a tariff value is notified.
Students default to the transaction value and miss the tariff value in the facts.
Fix: Check first for a notified tariff value. If there is one, duty = rate × tariff value.
Including the export duty in the value of the goods.
Students treat the price as inclusive of all costs and take duty as a cost of the exporter.
Fix: The value is the price for delivery at the time and place of exportation, and the duty payable on the export is not part of it. Work out duty after fixing the value.
Ignoring the conditions of the transaction value, such as related parties or additional consideration.
Students memorise the definition but skip the conditions in case facts.
Fix: Always state the two conditions and test them against the facts. If they fail, move to the fallback methods in order.

Worked examples

Example 1

Mehta Exports files a shipping bill on 10 March for goods with a free-on-board price of ₹10,00,000 to an unrelated foreign buyer. The price is the sole consideration. The export duty rate on these goods is 10% until 14 March, when a notification raises it to 15%. The proper officer passes the order permitting clearance and loading on 13 March. The goods are loaded on 16 March and the ship sails on 18 March. No tariff value is notified. Find the export duty payable.

Show the solution

Value: the buyer is unrelated and the price is the sole consideration, so the transaction value applies. It is the price for delivery at the time and place of exportation, which is ₹10,00,000.
Date: the goods are entered for export under Section 50, so the Section 16 date is the date of the order permitting clearance and loading, which is 13 March.
Rate: on 13 March the rate in force is 10%. The increase to 15% on 14 March is not relevant. The loading date, 16 March, and the sailing date, 18 March, do not matter either.
Duty = 10% × ₹10,00,000 = ₹1,00,000.

Answer: Export duty is ₹1,00,000, at 10%, because the rate on the date of the let-export order (13 March) applies.

Example 2

Sharma Metals exports 20 tonnes of a product on which a tariff value of ₹60,000 per tonne has been notified under Section 14. The invoice price is ₹55,000 per tonne. The export duty rate on 5 June, the date of the order permitting clearance and loading, is 5%. Before loading on 8 June, the tariff value is raised to ₹70,000 per tonne and the duty rate to 8%. Compute the duty and explain.

Show the solution

Provision: where a tariff value is fixed under Section 14, duty is levied on that value, not on the invoice price. So the invoice price of ₹55,000 is ignored for duty.
Date: the goods were entered for export under Section 50. Under Section 16, the rate and tariff value in force on the date of the order permitting clearance and loading apply, which is 5 June.
Facts: on 5 June the tariff value is ₹60,000 per tonne and the rate is 5%. The changes made before loading, on 8 June, do not apply.
Assessable value = 20 × ₹60,000 = ₹12,00,000.
Duty = 5% × ₹12,00,000 = ₹60,000.

Answer: Export duty is ₹60,000, computed on the tariff value of ₹60,000 per tonne and the 5% rate in force on 5 June.

Exam tips

In case-scenario MCQs, the dates are placed to trap you. Decide the relevant date first and ignore the others.
Always check for a tariff value before using the invoice price. A notified tariff value overrides the actual price for computing duty.
Write answers in provision-facts-conclusion form: state Section 14 or Section 16, apply the facts, then give the amount.
Be ready to contrast Section 15 (imports) and Section 16 (exports) in two lines. This is a common theory question.
In the written answer, name the Customs Valuation (Determination of Value of Export Goods) Rules, 2007, and state the order of methods rather than describing each method at length.

Practice questions from Valuation under the Customs Act, 1962

Valuation of Export Goods and Date for Determining Rate of Duty: frequently asked questions

Which date decides the export duty rate under Section 16?

For goods entered for export under Section 50, it is the date on which the proper officer passes the order permitting clearance and loading under Section 51. For other goods, it is the date of payment of duty.

Is the sailing date of the vessel relevant for the rate of export duty?

No. The sailing date and the loading date do not decide the rate. Only the let-export order date (or the payment date for other goods) does.

How is export goods value determined under the Customs Act?

Section 14 and the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 apply. The value is the transaction value, the price for delivery at the time and place of exportation, if the parties are unrelated and the price is the sole consideration. Otherwise, the Rules provide fallback methods in order.

What is tariff value and when does it apply to exports?

Tariff value is a value fixed by the Central Government for a class of goods under Section 14. When it is notified, export duty is computed on that value instead of the invoice price.