CUSTOMS AUTHORITY FOR ADVANCE RULINGS
NEW CUSTOM HOUSE, BALLARD ESTATE, MUMBAI - 400 001
E-MAIL: cus-advrulings.mum@gov.in
In
Application No. CAAR/CUS/APPL/75/2022-O/o Commr-CAAR-MUMBAI
Ruling
M/s. Shiv Shakti Minechem (hereinafter referred as "the applicant" or "the exporter") having its place of business at Jaitwara, District Satna, Madhya Pradesh - 485221 has filed the present application for advance ruling before the Customs Authority for Advance Rulings, Mumbai (CAAR, in short). The said application dated 30.09.2022 was received in the CAAR Secretariat, Mumbai on 06.10.2022 along with its enclosures in terms of Section 28H (1) of the Customs Act, 1962 (hereinafter referred to as the 'Act'). The applicant is stated to be engaged in the supply and export of other aluminium ores namely "Laterite" ("subject goods") under customs tariff' item 26060090 and has IEC No. 1112005048. The applicant has sought advance ruling on the method of computation of transaction value of export of goods and calculation of Export duty thereon.
2. The applicant, in their original CAAR-1 application has stated that they propose to export items such as Red & Yellow Ochre, White Clay China Clay, Red Oxide, Bauxite, Laterite, Black Carbon, Iron Ore etc., falling under the Customs tariff of export items. It is submitted that the applicant is an exporter of laterite and major countries of exports is Nepal through various Land Customs Station across Indo-Nepal border of Uttar Pradesh. The preliminary hearing for admission of the application was held online on 09.11.2022 which was attended by S/shri Manas Chugh (CA), Rajnish Kumar (CA) and Shri Sham Bansal. Mistake/misrepresentation at serial no. 6 of the CAAR-1 was brought to the notice of applicant/representatives. They agreed to rectify their statement/data at si. No.6 of CAAR-1 and after correcting the application only, the next hearing date would be decided. The rectified CAAR-1 was submitted on 15.11.2022 wherein they made correction at si. no.6 and listed only one export item, i.e., 'Laterite' and the personal hearing on the matter was fixed for 30.11.2022.
2.1 Applicant has submitted that the applicant and overseas buyer of the goods are not related; the price indicated in the export invoice is the sole consideration flowing from overseas buyer to the applicant in respect of the exports of goods; that the applicant does not levy and collect directly or indirectly any charges or consideration with respect to Freight Insurance, local charges or any other charges etc., from the overseas buyer in respect of export of the said Goods. The freight, insurance, local charges and other associated cost for export from factory/mines of exporter to land customs station is paid and born by the overseas buyer on its own, that is price mentioned in the export invoice represents actual value of collection by the exporter nothing over and above to price mentioned in export invoice Is collected and retained by the exporter. That as per section 14(1) for the purposes of the Customs Tariff Act, 1975 or any other law for the time being in force, the value of the exported goods shall be the transaction value of such goods that is to say, the price actually paid or payable for the goods when sold for export from India.
2.2 For ease of reference Section 14(1) of the Customs Act, 1962 is reproduced below:
"[14. Valuation of goods: - (1) For the purposes of the Customs Tariff Act, 1975 (51 of1975), or any other law for the time being in force, the value of the imported goods and export goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, or as the case may be, for export from India for delivery' at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale subject to such other conditions as may be specified in the rules made in this behalf"
Further, it is stated that proviso of Sec 14(1) provides for inclusion of other associated cost such as commissions and brokerage, engineering, design work, royalties and licence fees, costs of transportation in the transaction value of imported goods but such cost is not liable for inclusion in transaction value of exported goods, as there is nothing mentioned in case of exported goods. It is further stated that Office of the Commissioner, Customs (Prev.) Uttar Pradesh & Uttarakhand vide Instruction No. 01/2022 dated 20-06-2022 instructed to compute the export duty on the FOB (Free on Board) price of the goods.
2.3 It is also submitted that Nepal (Country of Export) is a landlocked county-, and as stated above the exporter is charging and collecting only the price of goods from the importer and other associated cost such as transportation etc. is arranged by the importer themselves for which freight is directly paid to the transporter by the importer, and in such case whether the export duty is to be paid on the price of goods or on the price of goods plus freight from premises of exporter to the land custom station from where goods are exported to foreign country. Therefore, applicant has sought advance ruling as to:-
(i) Whether export duty will be levied on transaction value (Price declared in invoice) or FOB Value;
(ii) If export duty to be calculated on FOB value, then whether freight, insurance, etc., paid by the overseas buyer to other person (other than exporter) is relevant or irrelevant for determination of transaction value of export goods in case of landlocked countries namely Nepal; and
(iii) If export duty to be calculated on transaction value, then whether method of computation of transaction value of export of goods shall be the price declared in invoice or to be calculated otherwise in case of landlocked countries namely Nepal.
3. In their CAAR -1 form the applicant has declared that they would be exporting the subject goods through the Land Customs Station across Indo-Nepal border in the state Uttar Pradesh. Accordingly, comments from the jurisdictional Principal Commissioner/Commissioner of Customs, Office of the Commissioner, Customs (Prev.), Uttar Pradesh & Uttarakhand, Lucknow were invited in respect of the application for advance ruling. However, no comments were received from the jurisdictional Principal Commissioner/Commissioner of Customs.
4. A personal hearing in the matter was held on 30.11.2022 wherein Shri Rajnish Kumar(CA), was present for the applicant as authorized representative. However, no one appeared on behalf of the jurisdictional Commissioner of Customs (Prev.). Shri Rajnish Kumar (CA), and authorized representative, represented the case and reiterated the submissions made through the CAAR-1. He further invited attention to provisions of Section 14 of the Customs Act, 1962. He requested to issue a ruling by accepting applicant's contention that the invoice price declared by the applicant be accepted as transaction value in case of applicant. He invited attention to the first proviso of section 14 of Customs Act, 1962 and stated that this proviso is applicable only for import and not to the export valuation. FOB is not defined anywhere in the Act but it is referred in the instruction no 1/2022 of Lucknow Customs preventive Commissionerate. He agreed to submit sample invoice copy of export with related Shipping Bill by 02.12.2022.
5. 1 have gone through the application CAAR-1, the submission of applicant- both oral and written along with records of personal hearing. The applicant is exporting the subject goods to the landlocked country, i.e., Nepal through the Land Customs Station across Indo-Nepal border of Uttar Pradesh. The applicant has sought advance ruling on the issue of valuation of export goods as to:-
(i) whether export duty will be levied on transaction value (Price declared in invoice) or FOB (Free on Board) Value;
(ii) if export duty to be calculated on FOB value, then whether freight, insurance, etc., paid by the overseas buyer to other person (other than exporter) is relevant or irrelevant for determination of transaction value of export goods in case of landlocked countries namely Nepal; and
(iii) if export duty to be calculated on transaction value, then whether method of computation of transaction value of export of goods shall be the price declared in invoice or to be calculated otherwise in case of landlocked countries namely Nepal.
5.1 Applicant has referred to the Instruction no. 01/2022 issued by the Office of the Commissioner, Customs (Prev.) Uttar Pradesh and Uttarakhand which is aimed at streamlining the practice to be followed in respect of valuation of export goods and calculation of export duty thereon keeping in view the Board's Circular no. 18/2008-Cus dated 10.11.2008, wherein it is categorically mandated to compute the export duty on the FOB price of the goods. The same has also been explained with an illustration too. The relevant text is reproduced herein below:-
"It is proposed that for the purposes of calculation of export duty, the transaction value, that is to say the price actually paid or payable for the goods for delivery at the time and place of exportation under section 14 of Customs Act 1962, shall be the FOB price of such goods at the time and place of exportation. For example, if the transaction is at Rs 100 FOB, and the duty is 15%, the export duty will be 15% of FOB price, that is Rs 15. In case the transaction is on CIF basis, the FOB price may be deduced from the CIF value, and then the export duty be calculated as 15% of such FOB price."
The applicant has stated that the term FOB is not defined anywhere in the Customs Act, 1962. Hence, in order to bring the clarity, the applicant wants to confirm stand taken by them is a legally correct stand or otherwise.
5.2 At the outset let me record an observation in this case. Valuation method prescribed for export goods under the Customs Act, 1962 read with Customs Valuation (Determination of Value of Export Goods) Rules, 2007 does not distinguish between the land-locked countries and other than land-locked countries. In view of the questions posed before me on the issue of valuation of export goods, it would be pertinent to visit the legal framework governing export valuation. The provisions of section 2(18), section 14 & section 16 of the Customs Act, 1962, Customs Valuation (Determination of Value of Export Goods) Rules, 2007 and the Shipping Bill and Bill of Export (Forms) Regulations, 2017 issued vide Notification no. 60/2017-Customs (N .T.) dated 29.06.2017 under the powers conferred by section 157 read with sections 50 and 60 of the Customs Act, 1962 (52 of 1962) are relevant for understanding various aspects of valuation of the export goods in the context of present application. To begin with let us examine the definition of the word 'Export' in the section 2 of the Customs Act, 1962.
"Section 2(18) "export ", with its grammatical variations and cognate expressions, means taking out of India to a place outside India."
5.3 The valuation of the export goods is governed by section 14 of the Customs Act, 1962. It is provided that:-
"(1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, the value of the imported goods and export goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, or as the case may be, for export from India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale subject to such other conditions as may > be specified in the rules made in this behalf:
Provided that such transaction value in the case of imported goods shall include, in addition to the price as aforesaid, any' amount paid or payable for costs and services, including commissions and brokerage, engineering, design work, royalties and licence fees, costs of transportation to the place of importation, insurance, loading, unloading and handling charges to the extent and in the manner specified in the rules made in this behalf:
Provided further that the rules made in this behalf may provide for, -
(i) .........................
(ii) .........................
(iii) the manner of acceptance or rejection of value declared by the importer or exporter, as the case may be, where the proper officer has reason to doubt the truth or accuracy of such value, and determination of value for the purposes of this section:
(iv) .........................
Provided also that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under section 46, or a shipping bill of export, as the case may be, is presented under section 50.
(2) Notwithstanding anything contained in sub-section (1), if the Board is satisfied that it is necessary or expedient so to do, it may, by notification in the Official Gazette, fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any> such tariff values are fixed, the duty shall be chargeable with reference to such tariff value.
Explanation - For the purposes of this section -
(a) rate of exchange" means the rate of exchange -
(i) determined by the Board, or
(ii) ascertained in such manner as the Board may direct, for the conversion of Indian currency into foreign currency or foreign currency into Indian currency;
(b) "foreign currency" and "Indian currency" have the meanings respectively assigned to them in clause (m) and clause (q) of section 2 of the Foreign Exchange Management Act, 1999 (42 of1999)."
Applicant has invited attention to the first proviso of section 14 of Customs Act, 1962 and stated that this proviso is applicable only for import and not to the export valuation. Since this proviso covers valuation of only imported goods there is no need to discuss this provision in the present case.
5.4 In exercise of the powers conferred by section 156 read with section 14 of the Customs Act, 1962, the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 have been issued vide Notification no. 95/2007-Customs (N.T.) New Delhi, 13th September, 2007 which provide for the valuation of export goods.
Rule 2 (b) states
(b) "transaction value " means the value of export goods within the meaning of sub-section (1) of section 14 of the Customs Act, 1962 (52 of1962).
5.4(a) Rule 3 provides for determination of the method of valuation:-
"(.1) Subject to rejection of a declared value by the Customs officer under ride 8, the value of export goods shall be the transaction value.
(2) The transaction value shall be accepted even where the buyer and seller are related, provided that the relationship has not influenced the price.
(3) If the value cannot be determined under the provisions of sub-rule (1) and sub-rule (2), the value shall be determined by proceeding sequentially through rules 4 to 6."
5.4(b) Rule 4 provides for determination of export value by comparison. Rule 5 provides for Computed value method. It states, if the value cannot be determined under rule 4, the transaction value shall be based on a computed value, which shall include the following:-
(a) cost of production, manufacture or processing of export goods:
(b) charges, if any, for the design or brand;
(c) an amount towards profit.
I find that the elements of costs at (a), (b) and (c) above mention only inclusions but the transaction value is not limited to summation of only those elements of costs.
5.4(c) Rule 6 provides Residual method which inter-alia states that, subject to the provisions of rule 3, where the value of the export goods cannot be determined under the provisions of rules 4 and 5, the value shall be determined using reasonable means consistent with the principles and general provisions of these rules provided that local market price of the export goods may not be the only basis for determining the value of export goods. Another important provision is Rule 7 of the C VR, 2007 which is related to the declaration by the exporter which states that the exporter shall furnish a declaration relating to the value of export goods in the manner specified in this behalf.
5.4(d) Rule 8 provides for rejection of declared value. It reads as follows :-
"(1) When the proper officer has reason to doubt the truth or accuracy of the value declared in relation to any export goods, he may ask the exporter of such goods to furnish further information including documents or other evidence and if after receiving such further information, or in the absence of a response of such exporter, the proper officer still has reasonable doubt about the truth or accuracy of the value so declared, the transaction value shall be deemed to have not been determined in accordance with subrule (1) of rule 3.
(2) At the request of an exporter, the proper officer shall intimate the exporter in writing the ground for doubting the truth or accuracy of the value declared in relation to the export goods by such exporter and provide a reasonable opportunity of being heard, before taking a final decision under sub-rule (1).
5.5 In addition to examination of present case under the provisions of section 14 and the Customs Valuation (Determination of Value of Export Goods) Rules, 2007, there are certain procedures prescribed to deal with the export goods under section 50 and section 51 of the Customs Act, 1962. Section 50 deals with entry of goods for exportation as follows:-
"(1) The exporter of any goods shall make entry thereof by presenting electronically on the customs automated system to the proper officer in the case of goods to be exported in a vessel or aircraft, a shipping bill, and in the case of goods to be exported by land, a bill of export in such form and manner as maybe prescribed:
Provided that the Principal Commissioner of Customs or Commissioner of Customs may, in cases where it is not feasible to make entry by presenting electronically on the customs automated system, allow an entry to be presented in any other manner.
(2) The exporter of airy goods, while presenting a shipping bill or bill of export, shall make and subscribe to a declaration as to the truth of its contents.
(3) The exporter who presents a shipping bill or bill of export under this section shall ensure the following, namely: -
(a) the accuracy and completeness of the information given therein;
(b) the authenticity and validity of any document supporting it; and
(c) compliance with the restriction or prohibition, if any, relating to the goods under this Act or under any other law for the time being in force. "
5.6 Section 51 of the Customs Act, 1962 deals with clearance of goods for exportation as follows: -
"(1) Where the proper officer is satisfied that any goods entered for export are not prohibited goods and the exporter has paid the duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance and loading of the goods for exportation:
Provided that such order may' also be made electronically through the customs automated system on the basis of risk evaluation through appropriate selection criteria: Provided further that the Central Government may, by notification in the Official Gazette, permit certain class of exporters to make deferred payment of said duty or any charges in such manner as may be provided by rules.
(2) Where the exporter fails to pay' the export duty, either in full or in part, under the proviso to sub-section (1) by such due date as may be specified by rules, he shall pay interest on said duty not paid or short-paid till the date of its payment at such rate, not below five per cent and not exceeding thirty-six per cent per annum, as may be fixed by the Central Government, by notification in the Official Gazette."
6. As stated above, the valuation of the export goods is governed by section 14 of the Customs Act, 1962. Plain reading of section 14, relevant for valuation of export goods states that, for the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, the value of the export goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for export from India for deIivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale subject to such other conditions as may be specified in the rules made in this behalf. In this provision the terms "the price actually paid or payable for the goods'* and "when sold for export from India for delivery at the time and place of exportation" in the context of present application are very significant.
6.1 The applicant, in the instant ease, claims that the overseas importer makes payment of an amount equal to invoice price on ex-mine basis to them. Applicant has submitted that the examines price at their site in Madhya Pradesh declared in the invoice may be accepted as a transaction value for export of goods under section 14 of the Customs Act, 1962. Simple scrutiny of this transaction indicates that the invoice price does not reflect full value of export goods and is only a part of the price payable for export goods in this ease. Invoice price may be a transaction price for exporter but it is not a transaction value for the purpose of section 14 of the Customs Act, 1962. On perusal of definition of the term "export" it is seen that the goods in the case of applicant cannot be treated as exported merely on clearance from the mine in Madhya Pradesh. For the process of export to be complete, the goods need to be taken out of India to a place outside India. This event can take place only after goods cross Indian land border, and hence on this ground alone the applicant's claim to construe the invoice price as the transaction value is legally untenable. Further the definition of the term "export' does not distinguish between the landlocked country vis-a-vis other than landlocked country as an export destination.
6.2 Value of the export goods is the price actually paid or payable for the goods for delivery at the time and place of exportation. Present case is not the case that the price paid to the exporter against the invoice value alone constitutes an export value. This is more so because the price has to be taken for sale of export goods when sold for export from India "for delivery at the time and place of exportation'. These words are very significant. The time and place of delivery will be when and where the goods are given a Let Export Order (LEO) by the jurisdictional Customs officer after examining the compliance to Customs law. By implication, all elements of cost that are required to be incurred to bring the goods 'for delivery' at the time and place of exportation' to the Indo-Nepal border will have to be added to invoice price to arrive at a correct transaction value of export goods as per section 14 notwithstanding the manner of how the financial transaction is organized. It means the elements of cost like, but not limited to, transit transportation, transit insurance, handling etc, will get added to the ex-mine invoice price to arrive at price payable for export goods for delivery' at the time and place of exportation, ft is immaterial who charges these elements to the foreign buyer and in what manner. But it is important to note that without incurring these elements of costs the goods cannot be delivered for export at the time and place of exportation.
6.3 Section 16 of the Customs Act, 1962 deals with the date of determination of the export duty and tariff valuation of export goods. It is under the section 16 that the levy' of the export duty is made with reference to the point of time and the rate applicable that is in force. Section 16(1 )(a) provides that in case export duty' is leviable, the rate of duty and tariff valuation, if any, applicable to any export goods, shall be the rate and valuation in force, in the cases of goods entered for exportation under section 50, on the date on which the proper officer makes an order permitting clearance and loading of goods for exportation under section 51. Ex-factory/mine clearance of goods for export in the applicant's case for the purpose of levy & collection of duty and clearance of export goods requires combined understanding of section 12, section 16, section 50 and section 51 of the Customs Act, 1962. The time and place of exportation isn't and cannot be the mines site in this case. Goods will be exported from Indo-Nepal border in Uttar Pradesh. The time of exportation is related to clearance from that land border and not from the mine. The wording "for the delivery' at the time and place for exportation" has to be legally construed as "for delivery at the time and place of exportation at the Land Customs Station at Indo-Nepal border". All associated costs incurred to bring the export goods for the delivery at the time and place for exportation from the Land Customs Station at Indo-Nepal border will inevitably form the transaction value of export goods notwithstanding the manner of organizing financial transaction. It is amply clear that without incurring associated expenses the export goods cannot be simply brought to the place of exportation at the time of export in view of legal provisions discussed above. Thus, in the applicant's case, the price payable for the export goods for delivery at the time and place of exportation can be arrived at only after inclusion of associated costs to the invoice price declared by the applicant.
6.4 The Shipping Bill and Bill of Export (Forms) Regulations, 2017 issued vide Notification no. 60/2017-Customs (N.T.) dated 29.06.2017 provides for the manner how the shipping bill/bill of export is processed and the export goods need to be presented. The information is to be provided as prescribed in the specified format of Shipping Bill and/or Bill of Export as mandated in the above said notification. A column in the shipping bill/bill of export is provided whereby the 'Analysis of Export Value' is mandated and seeks the break-up of (i) FOB, (ii) Freight, (iii) Insurance, (iv) Commission, (v) Discount and (vi) Other Deductions. This indicates that various elements of cost like insurance, freight, commission and discounts are the constituents of the FOB value.
6.5 "FOB value" means the price actually paid or payable to the exporter for goods when the goods are loaded onto the carrier at the named port of exportation including the cost of the goods and all costs necessary' to bring the goods onto the carrier and the valuation shall be made in accordance with the World Trade Organisation (WTO) Agreement on Implementation of rule VII of General Agreement on Tariffs and Trade (GAIT), 1994. Applicant's case cannot be an exception to this well laid down principle. This method is prescribed in various trade facilitation agreements in a very clear manner as follows.
FOB value shall be calculated in the following manner, namely:-
(a) FOB Value = ex-factory price + other costs
(b) Other costs in the calculation of the FOB value shall refer to the costs incurred in placing the goods in the ship for export, including but not limited to, domestic transport costs, storage and warehousing, port handling, brokerage fees, service charges, et cetera.
This in fact lays down the foundation for arriving at the assessable value of the export goods whereby various elements of costs, including the transit transportation cost, notwithstanding it is being paid to the transporter directly by the foreign buyer or otherwise, are required to be added to the invoice price. Costing exercise of addition of other cost elements is not limited to transit transportation cost alone. On this background it is observed that the invoice price charged on ex-mine basis by exporter in the instant case represents only a price paid by the importer to the exporter but it does not reflect an FOB value i.e. a price payable for delivery of goods at the time and place of exportation which is a basis for export assessment.
7. Instruction no. 01/2022 issued by the Office of the Commissioner, Customs (Prev.) Uttar Pradesh and Uttarakhand is aimed to streamline the practice to be followed in respect of valuation of export goods and calculation of export duty thereon keeping in view the Board's Circular no. 18/2008-Cus dated 10.11.2008 from F. No. 467/45/2008-Cus V, wherein it is categorically mandated to compute the export duty on the FOB price of the goods. The same has also been explained with an illustration too. The relevant text, at the cost of repetition, is reproduced herein below for clear understanding:-
"It is proposed that for the purposes of calculation of export duty, the transaction value, that is to sax' the price actually paid or payable for the goods for delivery at the time and place of exportation under section 14 of Customs Act 1962, shall be the FOB price of such goods at the time and place of exportation. For example, if the transaction is at Rs 100 FOB, and the duty is 15%, the export duty will be 15% of FOB price, that is Rs 15. In case the transaction is on CIF basis, the FOB price may be deduced from the CIF value, and then the export duty be calculated as 15% of such FOB price. "
7.1 I don't find any infirmity in the instructions based on the CBIC Circular quoted above that is binding on all field formations under the CBIC. Further it is not a case that the FOB price is not explained anywhere under the Customs Act, 1962 as observed in earlier discussion. As can be seen from the above discussion definite legal provisions are in place to govern the procedures involved in the valuation of export of goods and accordingly, the export goods need to be assessed to determine the applicable export duty and/or cesses, wherever applicable. In the instant case, the issue as raised by the applicant, as to how the value of the subject goods would be determined is very well enumerated in the forgoing discussion. The applicable sections, rules, regulations and circular provide ample guidance for the purpose of valuation of export goods. In the instant case the transaction price charged on ex-mine basis by the exporter is and cannot be an export transaction value under section 14 of the Customs Act, 1962. In the present case an FOB value will be a transaction value under section 14 and it has to be worked out and declared as per provisions of the extant legal framework governing export valuation.
8. I have considered all the materials placed before me in respect of the subject item for which an advance ruling has been sought. I have gone through the written submissions as well as the points made during the personal hearing. In view' of the foregoing discussions, I rule that the valuation of the subject goods namely 'Laterite' shall be done in accordance with the provisions of Customs Valuation (Determination of value of export goods) Rules, 2007 read with Customs Act, 1962. Accordingly, in respect of the rulings sought by the applicant on the points as mentioned in their CAAR-I application, I render the rulings as under:-
(i) the export duty shall be levied on transaction value arrived in accordance to the Customs Valuation (Determination of Price of Export Goods) Rules, 2007 read with Section 14 of the Customs Act, 1962. The price charged in invoice on ex-mine basis is not the transaction value under section 14 of the Customs Act, 1962;
(ii) the export duty' shall be calculated on Free Board Value (FOB) value. All associated costs including the freight insurance, etc., paid by the overseas buyer to the Indian exporter and/or to any other person (other than exporter) are relevant for determination of transaction value of export goods for deliver}' at the time and place of exportation in the present case; and
(iii) the method of computation of transaction value of export of goods shall be as prescribed under the Customs Valuation (Determination of Value of Export Goods) Rules, 2007.
(Narendra V. Kulkarni)
Customs Authority for Advance Ruling,
Mumbai