Custom Duty Calculation

1. An Indian Importer Imported raw material of USD 5000 in August 2022. Following
information is available
a) Packaging charges of goods: USD 120
b) Goods were stuffed in containers (returnable) price of the container is USD 400
c) Insurance premium: USD 50
d) Sea Freight: USD 160
e) Importer has paid commission of USD 100 to a broker
f) Exchange Rate = Rs. 79.00
g) Basic Custom Duty is peak rate of 10%
h) Social Welfare Surcharge: 10%
i) 12% GST is payable in India on such goods

2. An importer imported goods from Korea and presented the Bill of Entry at the custom
port for the calculation of Custom Duty. Following details are furnished

No. of Packages: 6

Total Weight: 3340 kgs

Value of Invoice: USD 5347

Terms of payment: FOB

Freight Charges: 20%

Insurance = 0.10%

Conversion Rate: Rs 79 per USD

Exchange rate fluctuates daily but CBIC fixes the rates for a time period of 15 days

3. Cost of machine imported: $40,000

Packing charges $ 500
Commission paid to broker@ 5% on cost of machine
Design & development charges outside India $4000
Sea freight charges:$4000
Insurance: $3000
Basic Custom duty: 12.5%, IGST: 12%
Exchange Rate: 1$ = 70

Particulars $ Rs
 Cost of Machine 40000
Add: packing Charges 500
Commission to Broker @ 5% =.05*40000
=2000
Design & Development expense 4000
FOB Value 46500 46500*70=
32,55,000
Add: Sea freight Charges 4000
Insurance 3000
Assessable Value 53500 =53500*70
37,45,000
Custom Duty @ 12.5% 468125
Total value for IGST =4213125
IGST @12% =505575

4. Find out assessable value (AV)

Case 1 Case 2 Case 3

Price charged by 45,00,000 45,00,000 80,00,000
exporter (in Rs.)
Cost of Transportation 8,50,000 - 100000
to India by Air (in
Rs.)
Cost of Transportation 8,50,000
to India by Ship (in
Rs.)
Cost of Insurance 60000 NA 20000
from the exporting
country in India (in
Rs.)

Assessable Value

Particulars Case 1 Case 2

Price charged by exporter / Invoice Value 4500000 4500000
FOB Price = Invoice Value 4500000 4500000
Add: Transportation Cost 8,50,000 8,50,000
Insurance 60000 1.125% of
Invoice
Value=50625
Assessable Value 54,10,000 54,00,625
**If good are imported by air then cost of transport cannot exceed 20 % of FOB value when
**Insurance cost is not available it is 1.125% of FOB
 5. The assessable value (AV) of imports is Rs 100000. The BCD (basic custom duty) is @
10 %. IGST is payable @ 12%. , SWC is 10%. Calculate IGST, and Total custom duty
6. A commodity is imported into India from a country covered by a notification issued by
the Central Government under section 9A of the Customs Tariff Act, 1975.
Following particulars are made available:
CIF value of the consignment: US$25,000
Quantity imported: 500 kgs
Exchange rate applicable: ` 60=US$1
Basic customs duty: 12%
Social Welfare Surcharge applicable as per the Finance Act, 2018 which is 1.2%.
Assume that only ‘basic customs duty’ (BCD) and Social Welfare Surcharge are payable.
IGST @12% is also be applicable.

VAT Question : Post VAT Calculation

Mr. X is the manufacturer incurred purchase cost of Rs. 500000, with a profit of 20% on
cost and sold to whole seller at the sales tax rate of 15%. The whole seller introduced the
cost of Rs. 100000 and profit of Rs. 60000 and sold the product to the retailor at 20%
sales tax rate. The retailer introduced the cost of Rs. 50000 and profit of Rs. 100000 who
sells @ 15% of sales tax