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

Under Section 14(2) of the Customs Act, 1962, the Board may fix tariff values for a class of goods. What is the effect once a tariff value is fixed by notification?

Once the Board fixes a tariff value by notification, duty is chargeable with reference to that tariff value, notwithstanding the transaction value rule in Section 14(1). It can apply to imported or export goods, and the importer has no option to choose.

  1. ADuty is chargeable with reference to that tariff valueCorrect
  2. BDuty is chargeable on the transaction value, with tariff value used only for comparison
  3. CThe importer may choose between tariff value and transaction value
  4. DThe tariff value applies only to export goods

Explanation

Section 14(2) says that, notwithstanding sub-section (1), where tariff values are fixed for any class of imported or export goods, duty is chargeable with reference to such tariff value. It applies to both imports and exports and gives the importer no choice.

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