DR.

RAM MANOHAR LOHIYA NATIONAL LAW

UNIVERSITY LUCKNOW

ROUGH DRAFT

TAXATION LAW II

VALUATION OF GOODS UNDER CUSTOMS ACT, 1962

SUBMITTED TO: Mr. Anil Sain

SUBMITTED BY: Abhishek Dixit

(Asst. Prof.)

(ROLL NO. 02)

Introduction

Valuation is an aspect which is essentially required to determine the amount of duty to be levied
in the transaction of goods and services. Customs act of 1962 in itself codifies it under section
14. Valuation of goods under the customs act can be done by two ways i.e. Transaction value
method which is provided under clause 1 of section 14 and tariff value method which is stated
under clause 2 of section 14. When the transaction value method is not being used to determine
the tax then methods have been provided under the custom valuation rules called as Custom
Valuation (Determination of Value of Imported Goods) Rules, 2007 which is based on WTO
Valuation Agreement. It lays down six methods of valuation namely, transaction value of
imported goods, transaction value of similar goods, deductive value which is based on identical
or similar imported goods sold in India, computed value which is based on cost of manufacture
of goods plus profits. And residual method based on reasonable means and data available. This
project vehemently studies the basic two methods in detail with and takes into account the
valuation methods discussed during import and export of goods. It is limited to the methods
given in the cat and does not discuss the methods of valuation given in Rules of 2007 in detail.
India presently follows the WTO provisions mentioned with the agreement of custom valuation.
As per the Indian Customs act, goods in India can be valued by transaction value method
enumerated under section 14(1) and by the Tariff Value method stated in section 14 (2). The
Custom Valuation Rules of 1988 though lays down six methods of valuation. This paper studies
the valuation of goods under the customs act and discusses the manner in which it is done. The
paper discuses as to how the goods that are imported and exported are chargeable to duty. The
methods of valuation determine the amount of duty leviable under the Rules of 2007 in detail.

Aims and Objectives of the Project:

The aim and objective of this document is to investigate and examine possible avenues in order
to provide sound basis for valuation of the goods under the Customs Act, 1962 by resorting to
certain legal framework and guidelines laid down by Honble Supreme Court in numerous case
laws.
On the other hand researcher also seeks to understand the various facets of legal frame work
pertaining to custom duties laws and thereby gives reader a better understanding. To support

theory, the researcher will enlighten the readers with pertaining legal provisions and case laws as
to help reader to appreciate to the extent it has been realized.
Scope of the study/ Limitation of the study
This study was mainly based on the primary data collected from books, legal database and other
e-sources and it primarily focus upon laws relating to custom duties and the valuation of Goods
under the Act, findings of court under various case laws however at this juncture the scope so
mentioned should not be considered as exhaustive.
Review of literature
The review works as determining factor for identifying existing information regarding laws
relating to custom duties and the valuation of goods, recent development and remedies thereof
at the same time it is also touching upon various guidelines and procedure enunciated by
judges in order to fill gap between laws and their practical realization. Thereby with available
resources and suggestion thereon researcher will enlighten readers as to the intricacies of legal
system.
Hypothesis
India presently follows the WTO provisions enumerated in the agreement on custom valuation.
Customs valuation is done to determine the value on imported goods that comes into India and
also on the exported items by India. Various questions have to be researched like the different
methods followed for the valuation of the goods under the Customs Act, 1962? What are the
International Standards to calculate the same, if any?

Research Methodology:

The proposed research study will be carried out with the help doctrinal research methodology
and the following resources will be taken into consideration:
1. Studying Primary and Secondary Sources (Books, Articles)
2. Library Research

Tentative Chapterisation

Introduction
Scope And Need For Valuation
Transaction Value Method
Tariff Value Method
Conclusion and Suggestion
Bibliography

Bibliography

BOOKS REFERED:

V.S Datey, Indirect Taxes, Law and Practice, Taxmann, 21 edition, 2008

R.K Jain, Custom Law Manual, Centax Publication, 2007-2008

E-SOURCES:1. http://www.dov.gov.in/newsite3/brief_on_customs_valuati on.asp

2.

http://www.eximguru.com/exim/indian-customs/customs-manual/customsvaluation.aspx