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CMA Final · Indirect Tax Laws and Practice · Valuation and Related Party Transactions

Under Section 14 of the Customs Act, 1962, the transaction value of imported goods is accepted as the customs value only where the buyer and seller are not related and which further condition holds?

Transaction value is accepted when buyer and seller are unrelated and the price is the sole consideration for the sale, subject to conditions in the valuation rules. Credit terms, manufacturer status or comparison with tariff value are not conditions under Section 14(1).

  1. APrice is the sole consideration for the saleCorrect
  2. BThe goods are sold on credit terms only
  3. CThe goods are imported by a manufacturer
  4. DThe price is lower than the tariff value

Explanation

Section 14(1) accepts transaction value where the buyer and seller are not related and price is the sole consideration for the sale, subject to conditions in the rules. The other options are not conditions stated in the section.

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