Skip to content

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 the price actually paid or payable for the goods when sold for export to India. For which delivery point is this price determined?

The transaction value is determined for delivery at the time and place of importation. Section 14(1) says the price paid or payable is for goods sold for export to India for delivery at that time and place, so transport and related costs up to that point are added.

  1. ADelivery at the time and place of importationCorrect
  2. BDelivery at the seller's factory gate in the exporting country
  3. CDelivery at the importer's warehouse in India after clearance
  4. DDelivery at the port of shipment on the date of the contract

Explanation

Section 14(1) defines transaction value as the price actually paid or payable when sold for export to India for delivery at the time and place of importation. Hence costs of transportation to the place of importation, insurance, loading, unloading and handling are added under the first proviso, as specified in the rules. The factory gate or port of shipment is not the delivery point stated in the section.

Did you get it right without looking?

One question tells you little. A timed set on Valuation and Related Party Transactions shows your real accuracy, how long you take and where you lose marks.

Practise Valuation and Related Party TransactionsFree diagnostic mock

More Valuation and Related Party Transactions questions