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CA Final · Indirect Tax Laws · Valuation under the Customs Act, 1962

Ishaan, a passenger arriving at Mumbai airport, makes a declaration in respect of his baggage under section 77 on 3 October, when a tariff valuation of Rs 50,000 per unit is in force for an item. The tariff valuation is revised to Rs 60,000 on 5 October, and he pays duty on 6 October. Which valuation applies to the baggage?

Rs 50,000 applies. For baggage, the rate of duty and tariff valuation are those in force on the date the declaration is made under section 77, which is 3 October. Later revision and the payment date do not change it.

  1. ARs 60,000, the valuation on the date of payment
  2. BRs 50,000, the valuation on the date of declaration under section 77Correct
  3. CRs 60,000, the valuation on the date of the passenger's departure from the airport
  4. DRs 55,000, the average of the two valuations

Explanation

Section 78 provides that the rate of duty and tariff valuation for baggage are those in force on the date a declaration is made under section 77. That date is 3 October, so Rs 50,000 applies. The payment date is relevant only for goods under section 15(1)(c), and it is not used for baggage.

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