CMA Final · Indirect Tax Laws and Practice · Valuation and Related Party Transactions
Under section 14(1) of the Customs Act, 1962, the transaction value of imported goods is accepted as the customs value only when certain conditions are met. Which of the following is one of those conditions stated in the section?
Transaction value applies where goods are sold for export to India for delivery at the time and place of importation, the buyer and seller are not related, and price is the sole consideration, subject to the conditions in the rules. Warehousing, rupee payment or trade agreements are not conditions.
- AThe goods must have been sold for export to India for delivery at the time and place of importation, with buyer and seller not related and price being the sole considerationCorrect
- BThe importer must have held the goods in a warehouse for at least thirty days before filing the bill of entry
- CThe price must be paid in Indian rupees only, irrespective of the invoice currency
- DThe seller must be located in a country with which India has a trade agreement
Explanation
Section 14(1) defines transaction value as the price actually paid or payable when goods are sold for export to India for delivery at the time and place of importation, where the buyer and seller are not related and price is the sole consideration, subject to conditions in the rules. The other options add requirements (warehousing, rupee payment, trade agreement) that the section does not contain.
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