Valuation - SVB Verifiction process

Valuation - SVB Verifiction process - Step 1 - Description:

  •     Related persons use uncommon nomenclature or codes to identify their goods.
  • Hence they are not description of goods.
  • The invoice should contain full description of goods as in the normal trade with unrelated buyers who place orders and get the goods. Only then the entire exercise of SVB is meaningful.
  • If the description is not as required, first the importer has to follow Rule 12 (iii) (e).  

Rule  (3)   (a)    Where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price.

                  (b)          In a sale between related persons, the transaction value shall be accepted, whenever the importer demonstrates that the declared value of the goods being valued, closely approximates to one of the following values ascertained at or about the same time.

(i)           the transaction value of identical goods, or of similar goods, in sales to unrelated buyers in India;

(ii)          the deductive value for identical goods or similar goods;

(iii)          the computed value for identical goods or similar goods: 

(4)        No addition shall be made to the price actually paid or payable in determining the value of the imported goods except as provided for in this rule.

11. Declaration by the importer. — (1)The importer or his agent shall furnish -

               (a)  a declaration disclosing full and accurate details relating to the value of imported goods; and

               (b)          any other statement, information or document including an invoice of the manufacturer or producer of the imported goods where the goods are imported from or through a person other than the manufacturer or producer, as considered necessary by the proper officer for determination of the value of imported goods under these rules.

       (2)    Nothing contained in these rules shall be construed as restricting or calling into question the right of the proper officer of customs to satisfy himself as to the truth or accuracy of any statement, information, document or declaration presented for valuation purposes.

       (3)    The provisions of the Customs Act, 1962 (52 of 1962) relating to confiscation, penalty and prosecution shall apply to cases where wrong declaration, information, statement or documents are furnished under these rules.


12. Rejection of declared value. —  (1) When the proper officer has reason to doubt the truth or accuracy of the value declared in relation to any imported goods, he may ask the importer of such goods to furnish further information including documents or other evidence and if, after receiving such further information, or in the absence of a response of such importer, the proper officer still has reasonable doubt about the truth or accuracy of the value so declared, it shall be deemed that the transaction value of such imported goods cannot be determined under the provisions of sub-rule (1) of rule 3. 

 (2)  At the request of an importer, the proper officer, shall intimate the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to goods imported by such importer and provide a reasonable opportunity of being heard, before taking a final decision under sub-rule (1).

Explanation.-(1) For the removal of doubts, it is hereby declared that:–


(i) This rule by itself does not provide a method for determination of value, it provides a mechanism and procedure for rejection of declared value in cases where there is reasonable doubt that the declared value does not represent the transaction value; where the declared value is rejected, the value shall be determined by proceeding sequentially in accordance with rules 4 to 9.


(ii) The declared value shall be accepted where the proper officer is satisfied about the truth and accuracy of the declared value after the said enquiry in consultation with the importers.


(iii) The proper officer shall have the powers to raise doubts on the truth or accuracy of the declared value based on certain reasons which may include -

(a)   the significantly higher value at which identical or similar goods imported at or about the same time in comparable quantities in a comparable commercial transaction were assessed;

(b)  the sale involves an abnormal discount or abnormal reduction from the ordinary competitive price;

(c)    the sale involves special discounts limited to exclusive agents;


(d)   the misdeclaration of goods in parameters such as description, quality, quantity, country of origin, year of manufacture or production;


(e)    the non declaration of parameters such as brand, grade, specifications that have relevance to value;

(f)    the fraudulent or manipulated documents.