CBIC issues Guidelines for valuation of secondhand machinery

Feb 05, 2020 | by Avantis RegTech Legal Research Team

Industry Specific Compliance

The Central Board of Indirect Taxes and Customs (CBIC) on February 05, 2020 issues Guidelines for valuation of secondhand machinery.

The following Guidelines shall be followed:

(a)    All imports of second hand machinery or used capital goods will be ordinarily accompanied by an inspection or appraisement report issued by an overseas Chartered Engineer or equivalent, prepared upon examination of the goods at the place of sale.

(b)    The report of the overseas chartered engineer or equivalent should be as per the Form A (Page 5).

(c)     In the event of the importer failing to procure an overseas repot of inspection or appraisement of the goods, he may have the goods inspected by any one of the chartered Engineers empaneled locally by the respective Custom Houses.

(d)    In cases where the report is to be prepared by the Chartered Engineers empaneled by Custom Houses, the same will be in the Form B (Page 7).

(e)    The value declared by the importer shall be examined with respect to the report of the Chartered Engineer. Similarly, the declared value shall be examined with respect to the depreciated value of the goods determined in terms of the circular dated November 19, 1987 and dated January 01, 1988. If such comparison does not create any doubt regarding the declared value of the goods, the same may be appraised under rule 3 of the Customs Valuation Rules, 2007, If there are significant differences arising from such comparison, Rule 12 of the Customs Valuation Rules, 2007 requires that the proper officer shall seek an explanation from the importer justifying the declared value. The proper officer may then evaluate the evidence put forth by the importer and after giving due consideration to factors such as depreciation, refurbishment or reconditioning (if any), and condition of the goods, determine whether the declared transaction value conforms to Rule 3 of Customs Valuation Rules, 2007. Otherwise, the proper officer may proceed to determine the value of the goods, sequentially, in terms of rule 4 to 9.

Circular No. 25/2015 dated October 15, 2015 stands supersede with the issue of this circular.

[Circular No. 07/2020-Customs]


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