Q9. What are the CATT principles of customs valuation?

 

Ans: Article VII of the GATT, 1994 lays down the main principles of customs valuation. Customs value should not be arbitrary, fictitious or based on value of indigenous goods. It should be real and based on the actual value of goods under import or of like goods. It should also derive from a sale or offer of sale in the ordinary course of business under fully competitive conditions. If the actual value is not ascertainable, the customs value should be based on the nearest ascertainable equivalent of such value. The ACV contains provisions to implement these principles.

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Q10.  What are the different methods of customs valuation allowed under the ACV?

 

Ans: The preamble to the ACV recognizes that, to the greatest extent possible. the basis of customs value should be the transaction value. However, in all, it provides for 6 methods of valuation to be applied in the following order:

 

1.   The Transaction Value Method;

2.             Comparative Value Method based on Transaction Value of Identical goods;

3.             Comparative Value Method based on Transaction Value of Similar goods;

4.             Deductive Value Method based on subsequent sale price in the importing country;

5.             Computed Value Method based on cost of materials, fabrication and profit in the country of production;

      and

6.             Fallback Method based on previous methods with greater flexibility.

 

These methods require to be applied in the given sequence, starting with the first. Only when a method specified earlier in the sequence cannot be applied, can resource be taken on the next method in the sequence.

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Q11. Can the sequence be altered?

 

Ans: Article 4 of the ACV allows an importer to request reversal of the order of application between the Deductive Value Method and the Computed Value Method. However, the developing countries are allowed to make a reservation to the effect that such reversal will be subject to approval by customs authorities.

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