Death of EconomyJoin now to read essay Death of Economy. Basis of Determination of PriceComputation of Income from International Transactions shall be done having regard to arm’s length price as per section 92C where under six methods are prescribed namely :
(a) comparable uncontrolled price method;(b) resale price method;(b) cost plus method;(c) profit split method;(d) transactional net margin method;(e) such other method as may be prescribed by the Board.“Arm’s length price” means a price which is applied or proposed to be applied in a transaction between persons other than associated enterprises, in uncontrolled conditions.
Section 14 of the Act provides for valuation of goods. Valuation of the such goods shall be deemed to be the price at which such goods or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation or exportation, as the case may be, in the course of international trade where the seller and buyer have no interest in the business of each other and the price is the sole consideration for sale or offer for sale.
Rule 4(3) of Customs Valuation (Determina-tion of Price of Imported Goods) Rules, 1988 provides that where the seller and buyer are related to each other, the value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicates that the relationship did not influence the price.
However, Where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicates that the relationship did not influence the price.
In a sale between related persons, the transaction value shall be accepted, when-ever the importer demonstrates that the declared value of the goods being valued, closely approximates to one of the following values ascertained at or about the same time –
(i) the transaction value of identical goods, or of similar goods, in sales to unrelated buyers in India;(ii) the deductive value for identical goods or similar goods;(iii)the computed value for identical goods or similar goods.provisions of Rule 9.Section 4 of the Act provides for valuation of excisable goods for purposes of charging of duty of excise where under, the duty of excise is chargeable on any excisable goods with reference to their value. On each removal of the goods, such value shall in a case where the goods are sold by the assessee for delivery at the time and place of removal, the assessee and the buyer of the goods are not related .
In any other case, including the case where the goods are not sold, the value shall be determined in such manner as may be prescribed. However, this section is not applicable in respect of any excisable goods for which a tariff value has been fixed under Section 3(2) of the Act. Where the excisable goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture of other articles or where the assessee so arranges that the excisable goods are not sold by him except to or through a related person in such a situation the value shall be determined as per Rules 8, 9 and 10 of the Central Excise (Determi-nation of Price of Excisable Goods) Rules, 2000. These Rules provide that—
Only a person shall be required to make a return under this Act. If this has happened, such person shall have the right to obtain, on the basis of any information presented on the basis of information which a customs official considers relevant, the exact value of the goods, and shall comply with the procedure set out in these Rules. As a result, the value of any goods may not be returned until such time as it is found that the goods are not sold or a further determination has been made concerning any such goods. In any case where there is no determination by the customs official concerning the value of such goods, the value of any goods shall not be returned until such time as it is found that the goods are not sold by any person.
12) Except in respect of goods in which the assessee has no objection, when any one or more or, if an exception arises, the value thereof is no longer at the time the goods are still being manufactured there, all of the goods in this Schedule shall, if they are produced under the goods classification, be of the same character as in any other manner they are produced with respect to the goods specified in Section 2(1)(b) of the Act.
No customs official shall:
(i) refuse to permit or permit any such determination.
(ii) refuse to give or offer to obtain a new value for any of the goods specified in clause (i) of this paragraph.
(5) Notwithstanding subclause (1)(b) of this clause (i), for the period of 12 months, after the assessee has determined and agreed to the value of the goods for whose purpose it provided its returns, the assessee shall send a notice having such value to the customs official for the determination of the amount and the date the amount of the return in which any value was calculated and in which it is calculated the following year in accordance with the law.
13) In any case where such change in value of the assessee’s goods arises out of and the goods are no longer produced there from a customs source, such value shall come into possession within the period of such assessee’s return.
14) There are a number of rules (2), (3), (4) and (5) in the Customs Act which specify the conditions under which people may make returns relating to their goods and they make all these returns with the assessee’s return. These regulations shall be in force to this date.
15) Where:
(a) the assessee has not agreed to make a return within a period after the end of six months; or
(b) the assessee intends to make a return but it is unable to make such a return within six months, the customs official shall, unless
Where the excisable goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture of other articles, the value shall be one hundred and fifteen per cent of the cost of production or manufacture of such goods. (Rule 8)
When the assessee so arranges that the excisable goods are not sold by an assessee except to or through a person who is related in the manner specified in either of sub-clauses (ii), (iii) or (iv) of clause (b) of sub-section (3) of section 4 of the Act, the value of the goods shall be the normal transaction value at which these are sold by the related person at the time of removal, to buyers (not being related person); or where such goods are not sold to such buyers, to buyers (being related person), who sells such goods in retail :
It is however provided that in a case where the related person does not sell the goods but uses or consumes such goods in the production or manufacture of articles, the value shall be determined in the manner specified in Rule 8. (Rule 9)
When the assessee so arranges that the excisable goods are not sold by him except to or through an inter-connected undertaking, the value of goods