Problems on custom duty. 1. Calculation of customs duty payable is as follows, if assessable value % 50,000 BCD 15% and IGST rate taken as 18%. 2. Ms. Supriya imported certain goods weighing 150kgs. With CIF value US $ 5,000.exchange rate was US $ = %65 on the date of presentation of bill of entry as on 15-03- 2020.Basic customs duty is chargeable @ 15% and Social Welfare Surcharge as applicable. As per Notification issued by the Government of India, anti- dumping duty will be equal to difference between amount calculated @ US $ 50 per kg and ‘landed value’ of goods. Basic customs duty is @ 15% and IGST rate is 18%. You are required to compute custom duty and anti- dumping duty payable by Ms. Supriya. 3. From the following particulars determine the assessable value of the imported equipment,(Assume that goods are imported on 29.02.2021). a) FOB cost of equipment (Japanese Yen) - 5,00,000 Yen b) Freight charges in Japanese Yen — 5,00,000 Yen c) Charges for development connected to equipment paid in India - %1,60,000d) Insurance charges paid in India for transportation from Japan 245,000 e) Commission payable to agent in India - % 35,000. Exchange rate as per RBI is 1 Yen = % 0.45.Exchange rate as per CBEC is 1 Yen = € 0.50. 4. An importer imports some goods @ 10,000 US$ on CIF basis, on 02.001.2021.Following dollar rate are available on the date of Presentation of bill of entry. a) RBI floor rate: 59.37 b) Interbank closing rate % 59.38 c) Rate notified by CBEC under section 14(3)(a)(1) of Customs Act 259.55 d) Rate at which bank has realized the payment from % 59.58 Find the Assessable Value for customs purpose. a A consignment is imported by air on 2021.CIF price is 1000 US$. Freight is 320 US$. Insurance cost was $35. Exchanges rates as follows RBI floor rate: 59.37, Interbank closing rate % 59.38, Rate notified by CBEC under section 14(3)(a)(1) of customs act ¥ 59.55, Rate at which bank has realized the payment %59.58. Find Value for Customs purposes.6. From the following particulars determine the assessable value of the imported equipment giving explanation for each items: a) FOB cost of equipment (Japanese Yen) 2,00,000 Yen b) Freight charges in Japanese Yen 20,000 Yen. c) Charges for development connected to equipment paid in India ¥ 60,000 d) Insurance charges paid in India for transportation from Japan 215,000 e) Commission payable to agent in India % 15,000. f) Exchange rate as per RBI is 1 Yen = % 0.58 Exchange rate as per CBE & C1 Yen = 7 0.60. 7. Compute the assessable value for purpose of determination of custom duty from the following data; a) Machinery imported from USA by air(FOB price) US $ 4,000 b) Accessories compulsorily supplied along with the machinery US $ 1,000 c) Air freight US 1,200 d) Insurance charges actual not available. e) Local agent’s commission to be paid in Indian currency % 9,300 f) Transportation from Indian airport to factory = 4,000.o g) Exchange rate US$ 1 = 260. Provide explanation where ever necessary. . From the following information, compute the assessable value: (i) Value of Machine in UK pounds 32,000.FOB (ii) Engineering and design charges paid - UK pounds 12,000 (iii) Freight paid (Air) - UK pounds 6000 (iv) Insurance -Not Known (v) The exchange rate announced by the Central Government is % 68 per UK pound . Techno Ltd. imported some goods from LMP Inc. of United States by air freight. You are required to compute the value for purposes of customs duty under the Customs Act, 1962 from the following particulars. CIF value- US$ 6,000, freight paid - US$ 2,000, Insurance cost — US $ 700. The bank had received payment from the importer at the exchange rate of US $1= % 60.5 while the CBE & C notified exchange rate on the relevant date was US $ 1 = @ 60. Make suitable assumptions where required and provide brief explanation to your answer.10. Bharath imports by air from USA a machine along with relevant accessories and spares for the value US $ 1,20,000 FOB. The others details are as follows: a) Commission to local agent in India = 27,000 b) Freight and insurance from airport to factory godown % 30,000 c) Freight — US $ 36,000 (US to India) d) Goods are insured, premium amount is not shown in invoice and not available e) At the request of Mr. Bharath, US $ 6000 has been incurred as expenses for improving the design of the machine, but the same is not reflected in the invoice. f) Basic custom duty is 15% and IGST - 18% g) Exchange rate to be considered US $1 = %72Problem on assessable value and customs duty payable 11. Udita Itd.,an actual user imports certain goods from USA ,at Chennai port, at cost of $1,00,000 FOB .The other details are as follows: 1. Packing charges :$ 22,000. Sea freight to India port : $ 28,000. Transi surance:$10,000. Design and development charges paid to a consultant in USA by importer: $ 9,000. Selling commission to be paid by the Indian importer: @ 5000. Rate of exchange announced by RBI: % 59,5 per$. Rate of exchange notified by the central board of excise and customs : 860 per S.rate of basic Custom duty : 15% and IGST 18%. Compute the assessable value of the imported goods and the basic customs duty payable . (BU,B,COM.SEP-2020) 12. Maruthi industries imported a machine for 10,000 dollars from USA from the following information calculate assessable value and customs duty payable. A) Packing charges 240 dollars B) Design and development charges 600 dollars C) Insurance 100 dollars D) Freight charges through air 320 dollars E) Commi ion paid to a broker who arranged the transaction 200 dollars F) Exchange rate specified by board one dollar =870 G) Basic customers duty 10% H) IGST @18% 1) Social welfare cess applicable at 10% on BCD .Problem on assessable value and customs duty payable 13. the following information is furnished by Mr-kiran on 8" April 2019 in respect of imported from USA: FOB value $20,000 Exchange rate Air freight Insurance charge not know Landing charges 21,000 Basic customs duty 15% Calculate the total customs duty payable by Mr. kiran, if IGST IS 18%. Problem on assessable value and customs duty payable 14.A. consignment. it imported by air .CIF price is 2,000 Euro. Air freight is 550 euro and insurance cost is euro 50. exchange rate announced by CBE and C as per customs notification is 1 euro =%54.15. Basic customs duty payable is 10%. Excise duty on similar goods produced in India is 16%.social welfare surcharge @ 10% is applicable . Find value for customs and duty payable . 15. ‘A’ imports by air from USA a gear cutting machine complete with accessories and spares . the value US $ F.0.B. 20,000 other relevant date /information: 1) At the request of the importer; US $ 1,000 have been incurred for improving the design , etc. of machine , but is not reflected in the invoice ,but will be paid by the party, 2) Freight - US $ 6,000, 3) Goods are insured but premium is shown / available in invoice , 4) Commission to be paid to local agent in India % 4,500, 5) Freight and insurance from airport to factory is ® 4,500, 6) exchange rate is US $ 1=2 45, 7) Duties of customs: basic -15%, social welfare surcharge @ 10% on duty as applicable . Compute: 1) Assessable vale,2) Customs duty. Problems on Assessable value and customs duty payable 16. compute the assessable vale and custom duty payable from the following information: 1) FOB value of machine -8,000 UK pounds 2) Freight paid (air )- 2500 UK ponds 3) Design and development charges paid in UK -500 UK pounds 4) Commission payable to local agent @ 2% of FOB In Indian rupee 5) Date of bill of entry -24-10-2018(Rate BCD 15%, Exchange rate as notified by CBE and © 270 per UK pound) 6) Insurance charges actually paid but details not available . Problem on customs duty payable 17) compute the duty payable under the customs Act ,1962 for an imported equipment based on the following information :Assessable value of imported equipment US $10,100. Date of bill of entry 25.4.2019. Basic customs duty on this date 15% and exchange rate notified by the central board of excise and customs US $1=%65. Date of Entry in wards 21.4.2019. basic customs US $ 1=€50.Social welfare surcharge @10% in terms of the finance Act ,2018. Make suitable assumptions where required and show the relevant working andround off your answer to the nearest Rupee. Problems on Assessable value and customs duty payable 18) From the following date , you required to compute the customs duty payable by Sukbhir & co. 1) FOB value of textile machine 1,00,000 Euro 2) Airfreight 26,000 Euro 3) Expenses incurred by seller for improving the design , at buyer -importer’s request = 4,000 Euro 4) Exchange rate 1 Euro =%80 5) Basic duty 15% 6) The price offered to the importer to a special discounted price. The buyer - importer has been specifically directed not do disclose this price to any buyer in India ,seller’s normal selling price is 1,20,000 Euro. Problems on Assessable value 19) PQRindustries Ltd imported certain equipment from japan at an FOB COST OF 2,00,000 yen (Japanese). The other expenses incurred by it in this connection are as follows. 1) Freight from japan to India_ port 20,000yen; 2) Insurance paid t surer in India % 10,000; 3) Designing charges paid to consultancy firm in japan 18,000yen; 4) M/S Premium Industries Ltd. Spend 2 1,00,000in for development work connected with the machine ; 5) Transportation cost from Indian port to factory % 30,000; 6) Central government has announced exchange rate prevailing in the market was 1 yer 0.3948 CBE & C by notification under section 14(3). However the exchange rate prevailing in the market was 1yen = @ 0.40527)..M/S_ premium industries Ltd Made payment to the bank based on exchange rate of 1 yen =& 0.4150, 8)..The commission payable to the agent in India was @5%of FOB price in Indian rupees .the rate is BCD @15% find the assessable value Problems on Assessable value and customs duty payable 20) M/S Premium industries Ltd imported a machine from japan at an FOB COST OF 1,00,000 yen (Japanese). The other expenses incurred by it in this connection are as follows. 1) Freight from japan to India_ port 10,000yen. 2) Insurance paid to insurer in India ® 5,000. 3) Designing charges paid to consultancy firm in japan 15,000yen. 4) M/S Premium Industries Ltd. Spend % 50,000in for development work connected with the machine . 5) Transportation cost from Indian port to factory @ 15,000. 6) Central government has announced exchange rate prevailing in the market was 1 yen = 0.40 by notification under section 14(3). However the exchange rate prevailing in the market was 1 yen=@ 0.4052 7) M/S premium industries Ltd .Made payment to the bank based on exchange rate of 1 yen =& 0.4150 8) The commission payable to the agent in India was @5%of FOB price in Indian rupees the rate is BCD @15% __ find the assessable valueIllustration - 21 (Problem on Assessable Value & Customs Duty Payable) Determine the total customs duty payable from the following data Quantity imported : 100MTs, FOB value; Swiss Franc : 10,000 Air Freight: Swiss Franc : 2,500 Insurance : Data not available, Exchange rate : 1 Swiss Franc = 872, Rate of BCD 15%. Illustration - 22 (Problem on Assessable Value) Determine the assessable value for the purpose of Customs Act, 1962 from the following information in respect of import of a machine from UK : FOB value UK Pound 6,000, Air Freight UK Pound 2,500 Design and Development charges paid in UK Pound 500 Design and Development charges paid in India % 10,000, Commission paid to local agents 1% of FOB value Date of Bll of entry 10-04-2020 (exchange rate notified by CBEC UK Pound 1 = 70) Date of entry Inward 20-04-2020 (exchange rate notified by CBEC UK Pound 1 = 65). Insurance are not ascertainable. Make assumption wherever required and provide suitable explanations. Illustration - 23 (Problem on Assessable Value & Customs Duty Payable) ‘A.consignment is imported by Air. CIF price is 2500 US dollars. Air freight is 600 US dollars and insurance cost is 75 US dollars. Exchange rate announced by CBE & C as per customs notification is 1 US dollar = & 70. Basic custom duty payable is 15%. Social Welfare Surcharge @ 10% is applicable. IGST at the rate of 18%. Find the value for customs purpose and total customs duty payable. lMlustration ~ 24 (Simple problem on Assessable value) ABC Ltd. Imported goods from USA at a cost of US Dollars 19,000 FOB, the other details are as. follows: a) Transit insurance : 1,900 Dollars b) Commission to local agent : § 5,800 ©) Sea freight charges : 5,500 Dollars dd) Packing charges : 4,300 Dollars €) Design and development charges of 5,000 dollars were paid to consultancy firm in USA f) Rate of exchange notified by CBEC 858 = 1 Dollar 8) Rate of exchange announced by importer bank & 59 = 1 Dollar.Illustration ~ 25 (Simple problem on Assessable value) Soarkle Ltc., imported certain goods from Germany through Mumbai port, at a cost Yen 41,75,000 FOB. The other details areas follows : a) Airfreight : Yen 20,000 bb) Packing charges : Yen 2,000 €)_ Insurance: Yen 1,000 d) Desgn and development charge: Yen 8,000 e) Rate of exchange announced by RBI: %78.00/Yen f) Rate of exchenge notified by the Central Board of Excise and Customs 78.40/Yen. Mlustrat n — 26 (Computation of Customs Duty Payable) company imported a machine from USA of CIF price is 3,000 Dollars. From the following information determine the Assessable Value and Customs Duty payable a). Freight from America to Indian airport 330 Dollars b) Insurance 75 Dollars ©) Desgn and development charges paid to consultancy firm in USA 1000 Dollars. d) The company also spent an amount of € 6,600 in India for installation of machine. e) Exchange rate as notified y CBEC is ¥58.50 = 1 dollar. | BCD payable is 10%. 8) Integrated tax 12%. h) GST Compensation cess 4% i) Social Welfare Surcharge (SWS) as applicable Mluste: ion — 27 (Computation of Customs Duty payable) ‘An importer has imported a machine from Japan at FOB cost of 13,00,000 Yens. Other details are as follows : a) Freight from Japan to Indian port was 18,000 Yens. b) Transit Insurance charges were 1% of FOB value ©) Desgn and development charges of 95,000 Yens were paid toa consultancy firm in Japan for design of a machinery. d) Packing charges of 25,000 Yens were charged extra e) 24,000 was spentin design cost on machine in Indie f) An amount of 2,95,500 Yens was payable to Japanese manufacturer towards charges for installation and commissioning the machine in India 8) Rate of exchange as announced by RBI was 1 Yen = 0.405. hh). Rate of exchange as announced by Central Govt by notification under section 14(3)(1):1 Yen = 0.4008 i) Customs duty was 10% GST on similar machinery in India would be 12% Find the customs duty payable.