Circular No. :467/25/2000-Cus V Cir No.14/2001 Dated : 2/3/2001
Valuation (Customs) Ship demurrage charges to be included in assessable value
Circular No. 14/2001-Cus., dated 2-3-2001
F. No. 467/25/2000-CUS.V
Government of India
Ministry of Finance (Department of Revenue)
Central Board of Excise Customs, New Delhi
Subject : Regarding inclusion of ship demurrage charge in Valuation of Goods.
I am directed to invite your kind attention to the Boards letter issued vide F. No. 467/21/89-Cus.-V, dated 14-8-1991, which states that demurrage anddespatchmoney may not form of a part of assessable value.
It was never the intention of the Board to exempt ship 3. demurrage charges from customs duty. Besides, the aforesaid clarificatory letter proceeded on a premise that post-despatch charges and ship demurrage are to be similarly treated in the matter of valuation of imported goods. Importers have, however, disregarded the letter in the matter of post-despatch charges. Wherever there is reduction of freight charged, the benefit by way of reduction in the value of goods has been claimed by the importers and in certain cases their claims also upheld by the Appellate Authorities (up to the level of CEGAT) and some of these decisions have attained finality, although in one case an appeal is pending in the Supreme Court.
In the circumstances, it is considered advisable to clarify 4. that nothing contained in the earlier letter should be construed as authorising the exclusion of any ship demurrage charges paid which are required to be included in the assessable value of goods under Section 14 of the Customs Act, 1962inter aliaby virtue of Rule 9(2) of the Customs (Valuation) Rules, 1988.
The earlier letter dated 14-8-1991 referred in para 1 supra shall stand withdrawn.