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

Under section 14 of the Customs Act, 1962, when the Board is satisfied that it is necessary or expedient, it may fix tariff values for a class of goods. Which statement about the consequence is correct?

Duty is chargeable with reference to the tariff value. Section 14(2) operates notwithstanding the transaction value rule, allowing the Board to fix tariff values by notification for any class of imported or export goods, having regard to the trend of value of such or like goods.

  1. AThe duty is chargeable with reference to the tariff value, notwithstanding the transaction value provisionCorrect
  2. BThe transaction value continues to apply and the tariff value is only indicative
  3. CThe tariff value applies only to export goods and not to imported goods
  4. DThe tariff value can be fixed only for goods where buyer and seller are related

Explanation

Section 14(2) begins with a non obstante clause over sub-section (1). The Board may, by notification, fix tariff values for any class of imported or export goods having regard to the trend of value, and duty is then chargeable on that tariff value. The tariff value is not merely indicative and covers both imports and exports.

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