G/VAL/Q/IND/9  
 
15 November 2022  
(23-7709) Page: 1/3 
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  
QUESTIONS  FROM CHINA TO INDIA  REGARDING DOCUMENT  G/VAL/Q/IND/ 6 
INDIA 
The following communication, dated 14 November 202 3, is being circulated at the request of the 
delegation of China . 
 
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China would like to thank India for its responses contained in document G/VAL/Q/IND/6, which 
aimed to answer the question s raised by China in document G/VAL/Q/IND/1. We have some follow -
up questions and some new questions, and we would appreciate further clarifications from India.  
 
A. Follow -up questions regarding India 's responses to questions raised in  document 
G/VAL/Q/IND/1  
 
Responses from India  
 
1. In terms of Section 14 of the Customs Act, 1962 read with Customs Valuation (Determination 
of Value of Imported Goods) Rule 2007, as amended, the value of the imported goods shall be the 
value of such goods, and shall include  – 
 
a. the cost of transport, loading, unloading and handling charges associated with the delivery 
of the imported goods to the place of importation;  
 
b. the cost of insurance to the place of importation.  
 
2. Cost of freight and insurance is added on an actual basis to the FOB price of imported goods. 
The freight of the imported goods incurred in its transportation in the exporting country (i.e. from 
the factory to the port of exportation) is not computed separately. The FOB (being an accepted  INCO 
term for international commercial transactions) includes such transportation costs.  
 
Follow -up questions  
 
1. If the transaction between the buyer and seller of the imported goods is concluded based on 
EXW (being an accepted INCO term for international commercial transactions), and the domestic 
freight (from the factory to the port of export) is not ascertainable, how to determine the freight in 
order to arrive at a FOB price?  
 
2. Regarding the determination of the cost of freight and insur ance to be added to the FOB price 
of imported goods, should the element “paid by the buyer” be taken into account? Does any provision 
of India’s legislation set out any requirement in this regard?  
 G/VAL/Q/IND/9  
 
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  B. New questions regarding Rule 10 of Customs Valuation (Dete rmination of Value of 
Imported Goods) Rule 2007  
 
1. Rule 10(1) of Customs Valuation (Determination of Price of Imported Goods) Rules 2007 
provides that:  
In determining the transaction value, there shall be added to the price actually paid or payable for 
the imported goods, - 
(a) the following to the extent they are incurred by the buyer but are not included in the price 
actually paid or payable for the imported goods, namely: - 
(i) commissions and brokerage, except buying commissions;  
(ii)  the cost of con tainers which are treated as being one for customs purposes with the 
goods in question;  
(iii)  the cost of packing whether for labour or materials;  
(b) The value, apportioned as appropriate, of the following goods and services where supplied 
directly or in directly by the buyer free of charge or at reduced cost for use in connection with the 
production and sale for export of imported goods, to the extent that such value has not been 
included in the price actually paid or payable, namely: - 
(i)  materials, com ponents, parts and similar items incorporated in the imported goods;  
(ii)  tools, dies, moulds and similar items used in the production of the Imported goods;  
(iii)  materials consumed in the production of the imported goods;  
(iv)  engineering, development , art work, design work, and plans and sketches undertaken 
elsewhere than in India and necessary for the production of the imported goods;  
(c) royalties and licence fees related to the imported goods that the buyer is required to pay, 
directly or indirectl y, as a condition of the sale of the goods being valued, to the extent that such 
royalties and fees are not included in the price actually paid or payable;  
(d) The value of any part of the proceeds of any subsequent resale, disposal or use of the 
imported  goods that accrues, directly or indirectly, to the seller;  
(e) all other payments actually made or to be made as a condition of sale of the imported goods, 
by the buyer to the seller, or by the buyer to a third party to satisfy an obligation of the selle r to 
the extent that such payments are not included in the price actually paid or payable.  
Explanation. - Where the royalty, licence fee or any other payment for a process, whether patented 
or otherwise, is includible referred to in clauses (c) and (e), su ch charges shall be added to the 
price actually paid or payable for the imported goods, notwithstanding the fact that such goods 
may be subjected to the said process after importation of such goods.  
It is noted the above provisions are very similar to the  provisions set forth in Article 8 of the 
Agreement, with an exception that there is an additional provision - sub paragraph (e).  
However, Article 8.4 stipulates that "No additions shall be made to the price actually paid or 
payable in determining the customs value except as provided in this Article ". 
China would like to seek clarification from India on whether the provisions of Rule 10(1) implement 
any provisions of the Agreement.  G/VAL/Q/IND/9  
 
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  2. It is noted that the wording of Rule 10(1)(e) of Cust oms Valuation (Determination of Price of 
Imported Goods) Rules 2007 is very similar to Paragraph 7 of Annex 3 of the Agreement which 
further amplifies the definition of Price actually paid or payable under Article 1. However, the 
provisions of Rule 10(1) s eem to provide for the adjustments which should be included in Customs 
value under Article 8. China would like to seek clarification from India on whether Rule 10(1)(e) 
implements any provision of the Agreement.  
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