G/VAL/Q/IND/5  
 
8 Novembe r 2022 
(22-8351) Page: 1/2 
Committee on Customs Valuation  Original: English  
 
NOTIFICATION UNDER ARTICLE 22 OF AGREEMENT  ON IMPLEMENTATION  
OF ARTICLE VII OF THE GENERAL AGREEMENT  
ON TARIFFS AND TRADE  1994  
REPLIES FROM INDIA TO QUESTIONS  FROM THE UNITED STATES  
RAISED IN DOCUMENT  G/VAL/Q/IND/ 4 
INDIA 
The following communication, dated 2 November 2022, is being circulated at the request of the 
delegation of India. It provides responses  to follow -up questions raised by the United States in 
document G/VAL/Q/IND/4  with regard to G/VAL/N/2/IND/2 . 
 
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Question 7  (G/VAL/Q/IND/4 ) 
 
India's response to question 7 in G/VAL/Q/IND/2 provides an explanation of its response to question 
6 on the Checklist of Issues in G/VAL/N/2/IND/2. It indicates that "in the circumstances where the 
importer is  not able to declare the actual costs, to help in timely assessment of value and clearance 
of cargo, addition of such costs at an average rate has been provided". According to Rule 10(2) of 
the Customs Valuation (Determination of Value of Imported Goods) R ules, 2007, "where the cost of 
transport . . . is not ascertainable, such cost shall be twenty percent of the free on board value of 
the goods", that the charges for loading, unloading, and handling "shall be one per cent of the free 
on board value of the goods", and that where the cost of insurance is not ascertainable, "such cost 
shall be 1.125% of the free on board value of the goods".  
 
Commentary 21.1 of the Technical Committee on Customs Valuation of the World Customs 
Organization provides: "3. The WTO Valuation Agreement establishes a system of valuation based 
on actual values, as opposed to notional or estimated values. Article 8.3 pr ovides that adjustments 
under Article 8 should be "made only on the basis of objective and quantifiable data". It follows that 
the deduction to take account of transport costs included in c. & f. and c.i.f. prices should be made 
on the basis of the actual costs. The actual costs would be those amounts ultimately paid to, for 
example, the international carrier or freight forwarder for the movement of those goods subject to 
the transaction."  
 
As an ad valorem  'average rate' of up to 22% of the FOB value of th e good does not reflect an 'actual 
cost', how does India's use of these rates comport with CVA Article 8.3 and Commentary 21.1?  
 
Response  
 
Valuation of imported goods is carried out in terms of Section 14(1) of the Customs Act 1962 read 
with Customs Valuat ion (Determination of Value of Imported Goods) Rules, 2007. Rule 10 of the 
Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 provides that for 
determination of transaction value, cost and services are computed on an actual basis. However, in 
rare cases when the cost of transport associated with the delivery of the imported goods to the place 
of importation and the cost of insurance  to the place of importation is not ascertainable, notional 
values are used for faster c ustoms clearances.  
 G/VAL/Q/IND/5  
 
- 2 - 
 
  This provision is to be used only in cases where the importer is not able to  declare  the cost of 
transport and insurance. In other cases, additions are made on an actual basis.  
 
Question 10 (G/VAL/Q/IND/4 ) 
 
Would India please provide an internet link or a copy of Circular 20/1997 -Customs dated 
17.06.1997?  
 
Response  
 
The li nk to the Circular 20/1997 -Customs dated 17.06.1997 : 
https://taxinformation.cbic.gov.in/view -pdf/1001629/ENG/Circulars  
 
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