MODULE 3: VALUATION OF GOODS AND

SERVICES UNDER GST

Value of taxable supply

The value of a supply of goods or service or both shall be the transaction value, which is the price
actually paid or payable for the said supply of goods or services or both where the supplier and recipient
of the supply are not related and the price is the sole consideration for the supply.
Computation of taxable value / Transaction value
Particulars Amounts ₹ Amounts ₹
Selling price / ex-showroom price / quoted price (excluding GST) XXX
Add: Inclusions not included in the sales price
Pre-delivery inspection charges XX
Publicity expenses / Packing cost/ Advertising XX
Selling expenses/ Servicing expenses XX
Discount in case of advance payment XX
Material purchased (exclusive of GST) XX
Raw materials supplied by buyer directly or indirectly on free of cost or
reduced cost for use in connection with such supply XX
Design & development charges XX
Subsidies directly linked to the price other than subsidies provided by Central
or State Government XX
Bonus, commission and incentives for increasing sales XX
Royalties and license fees related to the supply XX
Freight charges incurred by seller up to recipient place / place of delivery XX
Installation & erection expenses (if it is shown in invoice at the time or before
delivery) XX
Insurance charges incurred by seller up to the place of delivery / recipient place XX
Transport charges/ Warranty expenses/ Loading & handling charges XX
Taxes, Duties, Cesses, fees and charges except CGST, SGST, IGST XX
Imported from other country (inclusive of BCD & exclusive of IGST) XX XXX
TOTAL COST OF SUPPLY XXX
Less: Cost of durable & returnable packing XXX
XXX
Add: Profit margin XXX
Add: Bought out accessories XXX
VALUE OF SUPPLY XXX
 Less: Cash / trade discount XXX
XXX
Add: Interest or penalty for delayed payment XXX
Transaction value / Value of Taxable supply XXX

1. A dealer in Karnataka entered a contract with a supplier in Tamilnadu to deliver Machinery along
with essential accessories. From the following information, determine the total amount of GST payable
U/S 15 of the CGST Act 2017(composite supply)
a. Machinery cost (excluding Taxes) ₹ 8,00,000
b. Installation Charges charged separately ₹ 60,000
c. Secondary packing charges ₹ 1,60,000
d. Selling expenses ₹ 20,000
e. Design charges paid by the buyer ₹ 20,000
f. Cost of materials supplied by buyer free of cost ₹ 10,000
g. Pre-delivery inspection charges ₹ 4,000
h. Loading and handling charges within factory ₹ 10,000
Other information:
• Cash discount @ 5% on price of Machinery
• Trade discount @10% on price of Machinery
• Bought out accessories supplied along with machinery valued @ ₹ 10,000 which was necessary
for the working of the machinery. These bought out goods are charged for tax at the rate of 5%
• GST rate on machinery @ 18%.
• Rate of profit 12% on cost of the goods.
(B.Com, Mangalore University, April 2018)

2. Mr. Ganesh Roy dealer in Maharashtra entered into a contract with a supplier in Udupi to deliver
Machinery along with essential accessories. From the information determine the total amount of GST
payable U/S 15 of the CGST Act 2017
a. Price of the machinery (exclusive of GST) ₹ 12,00,000
b. Installation and erection expenses charged separately in invoice ₹ 92,000
c. Design and engineering charges charged separately in invoice ₹ 1,10,000
d. Packing charges charged separately in invoice ₹ 8,000
e. Pre-delivery inspection charges ₹ 12,000
f. Cost of insurance ₹ 8,000
g. Cost of transportation ₹ 14,000
h. Warranty charges charged separately ₹ 3,000
i. Margin of profit added by dealer @ 10% on cost of the value of supply.
j. GST on Machinery @18%
k. Trade discount @ 5% on the price of machinery.
l. Cash discount of ₹50,000 was allowed as per the terms of contracts, since full payment was received
before dispatch of machinery
m. The machine is supplied along with accessories (optional) at ₹ 20,000 and the rate of duty applicable
to these accessories is 28%

3. Determine the total amount of GST payable on a machine using the details given below:
a) Selling price of the machine (inclusive of CGST and SGST @ 9% each) ₹ 1,50,000.
b) Cost of durable and returnable packing included in the sale price ₹ 2,000.
c) Design and development charges ₹ 10,000.
d) Warranty charges paid by the seller ₹ 5,000 separately
e) Rate of GST 18%.
(B.Com, Mangalore University, April 2022)

4. Determine the total amount of GST payable on a machine using the details given below:
a) Selling price of the machine (inclusive of CGST @ 9% and SGST @ 9%) ₹ 1,47,500.
b) Cost of durable and returnable packing included in the sale price ₹ 5,000.
c) Design and development charges paid by buyer on behalf of seller to a third party ₹ 6,000.
d) Warranty charges charged separately by the seller ₹ 2,000.
e) Rate of GST 18%.
(B.Com, Mangalore University, April 2019)

5. Mr.Laxman a registered dealer provides the following information. You are required to compute
the value of taxable supply and GST payable
a. Laxman supply his products to dealers in his state and in other states
b. The rate of profit is 10% on cost of production and rate of GST is 18% on sales
c. Intra state purchase of raw material excluding GST is ₹5,00,000
d. Purchase of raw material from unregistered dealer who is specified u/s 9(3) CGST Act is ₹1,60,000
e. Import of goods including Customs duty ₹4,00,000
f. Purchase of raw material from other states excluding IGST is ₹1,00,000
g. Cost of transportation charges, wages and other manufacturing expenses is ₹ 2,80,000
h. Trade discount ₹ 14,000

6. Calculate GST payable by a registered dealer in Bengaluru from the following details:
1. Sales made to a registered dealer in Mysore - ₹ 8,00,000 @ 18% GST.
2. Sales made to a registered dealer in Mangaluru - ₹ 4,00,000 @ 18% GST.
3. Goods transferred to a branch in Bengaluru - ₹ 1,25,000 @ 18% GST.
4. Goods supplied to a unregistered dealer in Mandya -₹ 3,00,000 @ 18% GST.
5. Good supplied to a dealer of London ₹ 2,00,000 @ 18% GST.
The following are the returns made by recipients:
 i. Goods returned from a dealer of Mysore - ₹ 25,000 within 15 days.
ii. Goods returned from a dealer of Mangaluru - ₹ 15,000 after 7 months
iii. Goods returned from Bengaluru branch - ₹ 5,000 after 3 months.
iv. Goods rejected from a dealer of Mandya - ₹ 75,000 after 5 months.
As per terms of business, discount is allowed if payment is to be made within 30 days. Mangalore
dealer paid within 30 days of supply of goods and allowed ₹ 10,000 as discount and Mysore dealer
did not pay within 30 days and ₹ 10,000 recovered from him as interest for late payment

7. Mr.Vasanth a registered dealer in Bombay, furnishes the following information relating to interstate
sale made by him during the month of 31st July 2022
The supply of 40,00,000 includes:
a. Freight (of this ₹ 40,000 alone is shown separately) ₹ 1,50,000
b. Deposit for the returnable container ₹ 2,50,000
c. Branch transfer (outside the state) worth ₹ 12,50,000
d. Packing charges ₹40,000
Further in ascertain the sale turnover above; the dealer has deducted the following;
I. Turnover relating to goods worth ₹ 12,000(exclusive tax) covered by the invoice dated 02.04.2022,
which were returned on 01.10.2022
II. Goods worth ₹ 10,000(exclusive tax) covered by invoice dated 13.04.2022 were rejected by the
customer and the dealer received back the goods on 14.10.2022
Vasanth deals only with one type of commodity which is chargeable to GST @18% in Maharashtra.
You are required to calculate the value of taxable supply and IGST payable.

8. From the following information furnished by a dealer in Karnataka. Compute the amount of taxable
supply and IGST payable.

Particulars Interstate supply

GST @ 12% GST @ 18%
Gross sale 8,00,000 3,50,000
It includes the following:
Packing charges 3,500 1,500
Design charges 1,500 800
Trade discount 800 300
Exports 24,000 --
Freight (shown separately) 2,000 700
Freight (not shown separately) 18,000 13,000
Goods returned within 3 months 1,500 1,200
Installation expenses (shown separately) 5,600 5,100
Goods rejected within 8 months 3,000 1,600
Sales outside the state 9,000 8,000
Commission for additional sales 3,500 1.500
Goods worth ₹ 70, 000 was sold within the state (included in gross sales turnover of ₹ 3,50,000)
(B.Com., Mangalore University Sept. 2020 & October 2021)
9. Calculate IGST payable of a dealer in Chennai from the following details
a) Supply to a local dealer in Selam ₹ 5,60,000
b) Transfer to branch in Ananthpura (Andhra Pradesh) ₹5,00,000
c) Supply made to a registered dealer in Hyderabad for ₹1,00,000
d) Supply made to registered dealer in Bangalore ₹ 4,00,000
e) Export to Australia worth ₹ 5,00,000
f) Supply made to registered dealer in Pune 3,00,000
g) Export to Singapore worth ₹ 1,00,000
h) Supply made to a local dealer in Chennai ₹ 12,00,000
i)Supply made to an unit in Hassan Special Economic Zone ₹40,000
j) Stock transfer made to his branch at Madhurai, Tamil Nadu for ₹ 50,000
Following are the returns made within 6 months:
i. Bangalore dealer returned goods worth ₹ 30,000 and Pune dealer returned goods worth ₹ 15,000
ii. Salem and Chennai dealer returned the goods worth ₹ 40,000 and ₹ 30,000 respectively
iii. Australian Importer has returned goods worth ₹ 70,000
iv. Assume GST rate is @18%

10. From following information you are required to calculate assessable value and CGST and SGST
payable at 6% each.
The sale price of ₹ 1,50,000 does not include the following
Particulars Amount in ₹
Pre-delivery inspection charges 10,000
Publicity expenses 25,000
Packing cost 15,000
Cost of special packing 5,000
Material purchased (Exclusive of GST) 10,000
Design and Development Charges 5,000
Royalty charges 4,000
Advertising charges 14,000
Servicing charges 5,000
Selling expenses 25,000
Freight charges 30,000
Installation and erecting expenses 6,000
Insurance cost 5,000
Transportation charges 6,000
Taxes, Duties, cesses, fees and charges. 4,000
Incentives paid to sales personnel 5,000
Warranty expenses 3,000
Materials imported from UK (including BCD but excluding IGST) 10,000
But the selling price includes the following;
a. Trade discount (it is allowed before or at the time of supply) ₹ 10,000
b. Cost of durable and returnable packing ₹ 5,000
As per terms of payment, the payment was to be made within 30 days. However, recipient did not pay
within 30 days. Hence, supplier recovered ₹ 4,800 as interest for late payment.
As per terms of business, supplier used to charge markup @ 10% on cost of supply
(B.Com., Mangalore University April 2018, 2019)

11. From the following particulars, compute the taxable value of supply of services by Krishna Hotel,
Mysore. Also calculate GST payable @ 18%.
1. Rent a room to a guest ₹ 8,000 per day for 8 days.
2. Served alcoholic drinks for inmates of hotel ₹ 4,00,000.
3. Served aerated drinks at hotel ₹ 50,000.
4. Rented cars and the amount received from the hotel guest ₹ 50,000.
5. Amount collected regarding provisions of food ₹ 8,00,000.
6. A decorated function hall rented out to Moon Co. Ltd. And 'amount received ₹ 30,000 perday for 4
days.
7. Laundry services provided of ₹ 54,000.
8. Beauty parlour service charge ₹ 7,500.
9. Collection from Gymnasium service ₹ 25,500.
10. Wi-Fi charges collected from the guests ₹ 10,500.
11. Club facilities available by the guest ₹ 60,000.
12. Amount collected from swimming wears ₹ 25,000.

12. From the following information supplied by Rituparna Pvt. Limited, you are required to calculate
value of Taxable supply and amount of GST payable by the dealer on machinery. (GST rate @12%)
Selling of the following machinery includes the following;
a. Cost of durable and returnable packing ₹65,000
b. Trade discount (it is allowed before or at the time of supply) ₹ 75,000
The sale price of ₹ 4,50,000 does not include the following:
a. Selling expenses ₹ 25,000
b. Insurance cost ₹ 10,000
c. Warranty expenses ₹ 25,000
d. Design and Development Charges ₹ 18,000
e. Pre-delivery inspection charges ₹ 13,000
f. Packing cost ₹ 17,000
g. Material purchased (Exclusive of GST) ₹ 2,00,000
h. Publicity expenses ₹ 30,000
i. Taxes, Duties, cesses, fees and charges ₹ 75,000
j. Transportation charges ₹ 25,000
k. Erection and commissioning charges ₹ 30,000
1. Freight charges ₹ 50,000
m. Advertising charges ₹ 15,000
n. Mark up @ 15% on cost of supply
o. Recipient of goods is supplied materials worth, ₹ 17,000 to supplier which are welcoming forth
Manufacturing of Machinery.
p. Rituparna Pvt. Limited has also received from recipient accessories worth ₹ 10,000 to make the
design of machinery at the place of installations. This is not the part of terms of Business.
q. As per terms of payment, purchaser of goods is eligible to claim cash discount if payment made
within 30 days. Recipient made payment within 30 days and allowed ₹ 10,700 as discount.

13. A dealer of Mumbai entered into contract with a supplier in Kerala, for the delivery of a machinery
along with essential accessories. From the following information calculate the transaction value and
GST payable. Machinery cost including GST at 12% ₹ 11,20,000.
a. Following expenses are not included:
Installation charges ₹80,000
Primary and secondary packing ₹ 20,000.
Design charges ₹ 10,000.
Bought out accessories not essential for its working ₹ 1,00,000 were supplied along with the machine
b. Following are included in the price:
Durable and returnable packing ₹ 50,000
c. GST rate 12% on the machinery and 18% on accessories.
d. Trader has the practice of allowing 5% discount on the cost of the machinery.
e. Supplier of machinery recovered ₹ 10,000 for delay in payment
f. Penalty of ₹ 5,000 payable by dealer on the machinery.
(B.Com., Mangalore University 2019)

14. Mr. Rohan of Mysore, a manufacturer of textile materials furnishes the following information for
the month of April 2022.
1. Purchased raw cotton specified u/s 9(3) (GST @ 5%) from Mr. Vinod for ₹ 80,000.
2. Purchased silk yarn (GST @ 5%) specified u/s 9 (3) from Khushi for ₹ 95,000.
3. Special dies imported from London for ₹ 65,000.
4. Other raw materials purchased from Bengalur dealer for ₹ 70,000.
5. Purchased packing materials for ₹ 8,000.
6. He has incurred the following expenditure:
a. ₹ 15,000 for Transport Agency specified u/s 9(3) (GST @ 12%) to bring Raw cotton to the factory.
b. Publicity and advertisement expenses of ₹ 12,000.
c. Embroidery working charges ₹ 24,000.
d. Packing cost of ₹ 8,000.
e. Legal fees specified u/s 9(3) (GST @ 18%) paid to a senior Advocate for obtaining legal service for
the business ₹ 13,000.
f. Freight charges ₹ 8,000.
g. Selling expenses of ₹ 5,000.
h. Insurance cost of ₹ 12,000.
i. Taxes duties, fees, and other charges paid ₹ 3,000.
j. Incentives paid to sales personnel ₹ 4,000.
k. Cost of durable and returnable packing ₹ 5,000.
7. Rohan added 15% margin of profit on cost of production.
8. He used to allow 5% trade discount on total value of supply.
9. Penalty for delayed payment of ₹ 965.
10. Rate of GST @ 12%
Compute the Value of Taxable Supply and GST payable by him for the month of April 2022.

15. Mr. Chinmayraj of Bengaluru, a dealer furnishes the following information for the month of April
2022.
1. Purchased Cashew nuts specified u/s 9(3) (GST @ 5%) from Mr. Murali for ₹ 2,35,000.
2. Purchased goods from Bharath for ₹ 1,15,000.
3. Goods imported from Singapore for ₹ 3,65,000.
4. Raw materials purchased from Mysore dealer for ₹ 1,70,000.
5. Purchased Scrap materials specified u/s 9(3) (GST @18%) from Dept. of Public Works, Govt. of
Karnataka for ₹ 1,80,000.
6. He has incurred the following expenditure:
a. ₹ 25,000 for Transport Agency specified u/s 9(3) (GST @ 12%) to bring Cashew nuts.
b. Publicity expenses of ₹ 12,000.
c. Inspection charges ₹ 5,000.
d. Insurance cost ₹ 8,000.
e. Transportation charges ₹ 10,000.
f. Packing cost of ₹ 18,000.
g. Selling expenses of ₹ 15,000.
h. Taxes duties, fees, and other charges paid ₹ 6,000.
i. Incentives paid to sales personnel ₹ 14,000.
j. Cost of durable and returnable container ₹ 15,000.
7. Margin of profit @ 10% on cost of production.
8. Trade discount @ 10% on total value of supply.
9. Interest for delayed payment of ₹ 4,620.
10. Rate of GST @ 18%
Compute the Value of Taxable Supply and GST payable by him for the month of April 2022.

16. Mr. Prashanth Shetty a dealer in Mangalore entered a contract with a supplier in Mysore to deliver
machinery along with essential accessories. From the information determine the total amount of GST
payable U/S 15 of the GST Act2017. (Composite supply)
a) Price of machinery (excluding GST) ₹ 5,00,00
b) Cost of installation charged separately in invoice ₹ 25,000
c) Cost of insurance charged separately in invoice ₹ 17,500
d) Warranty charges, charged separately in invoice ₹ 14,000
e) Cost of transportation charged separately in invoice ₹ 2,500
Other information

• Cash discount @5% on price of the machinery was allowed as per terms of contracts. Since full
payment was received before dispatch of machinery
• Accessories were supplied (essential) along with machinery for ₹ 10,000 and accessories are
charged for tax at the rate of 5%
• Applicable GST rate on Machinery @18%

17. A dealer in Karnataka entered a contract with a supplier in Kerala to deliver machinery along with
essential accessories. From the information determine the total amount of GST payable U/S 15 of the
GST Act 2017. (Composite supply)
a) Machinery Cost (excluding taxes) ₹ 10,00,000
b) Selling expenses Rs. 10,000
c) Pre-delivery inspection charges Rs. 6,000
d) Installation charges charged separately Rs.50,000
e) Cost of materials supplied by buyer free of cost Rs. 20,000.
f) Secondary packing charges Rs. 80,000.
g) Design charges paid by the buyer Rs. 25,000.
h) Cost of insurance Rs. 10,000
Other information
a. Trade discount @ 10% on cost of machinery.
b. Cash discount @3% on cost of machinery.
c. The machine is supplied along with accessories @Rs.20,000 which are necessary for working of the
machinery. These bought out accessories are charged for tax at the rate of 5%
d. Rate of GST rate on Machinery @18%
e. Rate of profit @ 12% on cost of supply.
(B.Com., Mangalore University Sept. 2022)

CUSTOMS DUTY
Customs is an authority or agency in a country responsible for collecting tariffs and for controlling the
flow of goods, including animals, transports, personal, and hazardous items into and out of a country.
The movement of people into and out of a country is normally monitored by immigration authorities
under a variety of names and arrangements. Each country has its own laws and regulations for the
import and export of goods into and out of a country, which its customs authority forces. The import or
export of some goods may be restricted or forbidden. In most countries, customs are attained through
government agreements and international laws.
A Customs Duty is a tariff or tax imposed on goods when transported across international borders. The
purpose of Customs Duty is to protect each country's economy, residents, jobs, environment, by
controlling the flow of goods, especially restrictive and prohibited goods, into and out of the country.
Customs duty refers to the indirect tax levied on the import or export of goods in international trade.
In economic sense, a duty is also a kind of consumption tax. A duty levied on goods being imported is
referred to as an import duty. Similarly, a duty levied on exports is called an export duty.

Types of Customs Duty

1. Basic Customs Duty: All goods imported into India are chargeable to a duty under section 12 of
Customs Act, 1962. The rates of this duty, popularly known as basic customs duty, are indicated in the
First Schedule of the Customs Tariff Act, 1975 as amended from time to time under Finance Act. The
duty may be fixed on ad valorem basis or specific rate basis. The duty may be a percentage of the value
of the goods or at a specific rate. Normally, it is levied as a percentage of value as determined under
section 14(1). The Central Government has the power to reduce or exempt any good from these duties.
This is the standard rate at which the Basic Custom Duty is applicable. There are two sub types of Basic
Custom Duty. One is standard custom duty which is levied at the standard rates prescribed in the
schedule. There is another rate which is called the Preferential Rate. It is leviable only for those
countries which are specified in the schedule.
2. IGST (Integrated Goods and Services Tax): It is a component under GST law, which is levied on
good being imported into India from other country. It has been subsumed various customs duties
including Countervailing Duty (CVD) and Special Additional Duty of Customs (SAD)
Majority of imports would attract levy of IGST except a few commodities such as pan masala, certain
petroleum products which attract levy of CVD. Further, a few products such is aerated waters, tobacco
products, motor vehicles etc, would also attract levy of GST Compensation Cess, over and above GST.
The Customs duty calculator would be made available on CBIC and ICEGATE website.
There are seven rates prescribed for IGST- Nil, 0.25%, 3%, 5%, 12%, 18% and 28%. The actual rate
applicable to an item would depend on its classification and would be specified in Schedule notified
under section 5 of the IGST Act, 2017.
3. GST Compensation Cess: Sec 8 of "GST (Compensation to the state to loss of revenue)bill, 2016.
(herein aftercalled as compensation bill) is the charging sectionfor levy of GST Compensation Cess

• For the purpose of providing compensation to the State for loss of revenue arising on account
of implementation of the GST for a period of 5 years, GST Compensation Cess will be levied
and collected by Central Government.
• On the recommendation of GST Council, Central Government will prescribe the supplies of
goods and services, on which GST Compensation Cess will be levied. As of now GST
compensation cess is levied on luxury and sin Goods like pan masala, tobacco, aerated drinks,
etc.
• The rate of aforementioned cess will be notified by the Government.
• However no such cess shall be payable on such supplies made by a dealer who has been
permitted to pay tax under composition scheme under section 8 of CGST Act, 2016. ie. a
composition dealer need not to pay this cess.
Applicability of GST Cess: GST Cess would be applicable on both supply of goods or services that
have been notified by the Central Government. Also, both intra-state supplies of goods or services and
inter-state supplies of goods or services would attract GST cess. All taxable person under GST, except
taxpayers registered under GST composition scheme are expected to collect and remit GST cess. The
following goods will attract GST Cess:

• Pan Masala
• Tobacco and manufactured tobacco substitutes, including tobacco products.
• Coal, briquettes, ovoids and similar solid fuels manufactured from coal, lignite, whether or not
agglomerated, excluding jet, peat (including peat litter), whether or not agglomerated.
• Aerated waters
• Motor cars and other motor vehicles principally designed for the transport of persons (other
than motor vehicles for the transport of ten or more persons, including the driver), including
station wagons and racing cars.
• Any other supplies as notified from time to time.
GST Compensation cess is calculated on the value of
i) The imported article for the purpose of levying GST Compensation cess shall be, assessable
value plus Basic Customs Duty levied under the Act, and any sum chargeable on the goods
under any law for the time being in force; and
ii) These would include Social-welfare surcharge as well as anti-dumping and safeguard
duties. The inclusion of anti-dumping duties and safeguard duty in the value for levy of
IGST and Compensation Cess is an important change. The IGST paid shall not be added to
the value for the purpose of calculating Compensation Cess. Although BCD, Social welfare
surchargeand IGST would be applicable in majority of cases, however, for some products
CVD, SAD or GST Compensation cess may also be applicable.
4. Additional Customs Duty (ACD) under Section 3(1): Additional Duty of Customs or Countervailing
Duty (CVD) As per section 3(1) of Customs Tariff Act, any article imported into India is liable to duty
(in addition to BCD) equal to excise duty for the time being leviable on a like article if produced /
manufactured (or could be or capable of being produced manufactured) in India. It is also called as
Countervailing Duty(CVD). It is levied at the same rate on which excise duty is applicable to similar
products manufactured in India, CVD can be imposed even if there is exemption from BCD. If the
importer is the manufacturer, he can claim Cenvat credit of CVD. [No CVD on Anti-dumping duty,
Safeguard duty, Protective duty or Countervailing duty on subsidized articles). This CVD is applied on
the Assessable Value which is obtained after adding Basic Custom Duty and NCCD of customs to the
transaction value.
However, CVD has been subsumed with IGST w.e.f. 01/07/2017. Only few products such as pan masala
and tobacco products, alcoholic liquor certain petroleum products which attract levy of CVD.
5. Additional Customs Duty (ACD) under Section 3(3):In addition to Additional Duty under section (1)
of customs Tariff Act which is chargeable on all goods, further additional duty can be levied by Central
Government to counter balance excise duty leviable on raw materials, components etc., similar to those
used in production of such articles. This duty is in addition to any other duty imposed under Customs
Act or any other law.
However, ACD has been subsumed with IGST w.e.f.O1/07/2017. Only few products such as pan masala
and tobacco products, alcoholic liquor certain petroleum products which attract levy of ACD.
6. Special Additional Duty (SAD) or special CVD: Section 3(5) of Customs Tariff Act empowers
Central Government to impose duty in addition to Additional Duty leviable u/s 3(1) and 3(3) of Customs
Tariff Act. This is popularly known as Special Additional Customs Duty (Special CVD) levied on
imported goods in addition to BCD & CVD at the rate notified by Central Government to counter
balance the VAT local tax or any other charges for the time being leviable on a like article in India.
However, SAD has been subsumed with IGST wef.01/07/2017. Only few products such as pan masala
and tobacco products, certain petroleum products which attract levy of SAD.
7. Safeguard Duty: As per section 8B(1) of Customs Tariff Act, safeguard duty is imposed forprotecting
the interests of any domestic industry in India and it is product specific. Central Government is
empowered to impose Safeguard duty on specified imported goods if Central Government is satisfied
that the goods are being imported in large quantities and under such conditions that they are causing or
threatening to cause serious injury to domestic industry. Such duty is permissible under WTO
Agreement.
Central Government has to conduct enquiry and then issue a notification. The duty, once imposed is
valid for four years, unless revoked earlier. This can be extended, but total period safeguard duty cannot
be more than ten years. The duty is in addition to any other customs duty being imposed on the goods.
Safe guard duty is exempted if article originating from developing country, so long as the share of
imports of that article from that country does not exceed 3% of the total imports of that article to India.
If article originating from more than one developing country, it does not exceed 9%. Safe guard duty
will also exempt if goods imports by 100% EOU or units in a SEZ
8. Special Safeguard Duty: Central Government is empowered to impose product specific safeguard
duty or special safeguard duty as per section 8C (1) of Customs Tariff Act, on any article imported from
China, if the quantities are increased and such import is causing or threatening to cause market
disruption to domestic industry. This is a subtype of the Safeguard Duty. Maximum loss to our local
industries is suffered due to the products imported from The Republic of China. So, this duty is
specifically imposed on the goods imported from China to safeguard our local industries.
9. Protective Duties: As per section 6 (1) of Customs Tariff Act, protective duty is levied by the Central
Government upon recommendation made by the Tariff Committee and upon Central Government being
satisfied that it is necessary to provide protection to any industry established in India. At present, this
duty is not in force.
10. Anti-dumping duty: As per section 9A of Customs Tariff Act, it is imposed on imports of a particular
country. It is country specific. Dumping exists when a product is exported from one country to another
at a price which is less than its normal value prevailing in the exporting country. This is similar to
dumping of goods in our country. In order to safeguard our local industries, another duty called anti-
dumping is imposed on such goods. The difference between the normal value and the export price is
the dumping margin based on which anti-dumping duty is imposed.
11. Countervailing duty on subsidized articles: As per section 9 of Customs Tariff Act, it is levied on
articles which are imported by getting subsidies from other country. Goods can be imported/exported
at a low price due to the subsidy given by the Government. In order to bring it on an equal track with
similar goods in our country, a duty equivalent to the amount of subsidy granted by the Government is
imposed on such subsidized goods. This is called as Countervailing Duty on Subsidized Articles.
11. National calamity contingent duty (NCCD): It is levied on import of pun masala, chewing tobacco
& cigarettes at different rates as applicable. It is levied at 1% onPFY, motor cars,malti-utility vehicles
and 2-wheelers and ₹ 50 per ton on crude oil vide section 169 of Finance Act, 2003.
13. Export Duties: Under Customs Act, 1962, goods exported from India are chargeable to export duty.
The items on which export duty is chargeable and the rate at which the duty is levied are given in Second
Schedule to Customs Tariff Act, 1975 as amended from time to time under Finance Act. However, the
Government has emergency powers to change the duty rates and levy fresh export duty depending on
the circumstances.
14 Social Welfare Surcharge (SWS): SWS has been levied on the aggregate of all duties of customs,
except those listed in sub-clause 3 of clause 108. The assessable value for SWS shall therefore be the
same as that of the Ed/SHED Cess. The rate of SWS has been fixed at 10%. It is levied on the aggregate
of duties customs, except safe guard duty, CVD on subsidised goods, Anti dumping duty.
15. Road and infrastructure Cess: The R&I Cess is levied at a specific rate of ₹ 8 per Litre of Motor
Spirit and High-Speed Diesel. Under clause 109 of the Finance Bill, the cess has been levied as an
additional duty of Customs. The new R&I Cess has come in lieu of the erstwhile Road Cess applicable
on the scheduled goods. Correspondingly, the basic excise duty on MS and HSD has been reduced so
as to keep the overall duty on these products (both excise as well as customs) unchanged.

Format for determination of Customs Duty

Particulars Amount Total Duty

 Assessable Value XXX
Add: BCDon AV XXX XXX
Add: NCCD (if any) on (AV+BCD) XXX XXX
Add: CVD (if any) on (AV + BCD+NCCD) XXX XXX
Sub Total (A) XXX XXX
Add: Social welfare Surcharge of 10% on(BCD+NCCD+CVD) XXX XXX
Add : Safeguard Duty on AV XXX XXX
Protective duties on AV XXX XXX
Anti-dumping duty on AV XXX XXX
Sub Total (B) XXX XXX
Add: IGST on subtotal (B) XXX XXX
Add: Compensation Cess on Subtotal (B) XXX XXX

Total custom duty payable XXX

Illustration 1
A commodity of tobacco is imported into India from a country covered by a notification issued by
Central Government u/s 9A of CTA. Following particulars are given:
Assessable value:USD 25,250, Quantity imported: 500 kg. Exchange rate applicable: ₹ 64= USD 1,
BCD: 10%, Excise duty chargeable on similar goods in India as per tariff rate: 12.5%, NCCD @ 1%,
Social welfare Surcharge of 10%. As per the notification, anti-dumping duty will be equal to the
difference between the cost of commodity calculated at USD 74 per kg and the landed value of the
commodity imported. Calculate anti-dumping duty and total customs duty payable if IGST is 12%,
ignore GST compensation cess.

2. An importer imported commodity Z from People's Republic of China covered by a notification issued
by CG u/s 9A of CTA. Assessable value was US $ 20,000 and quantity 1,000 kgs. Exchange rate way
1 US $ = ₹ 44 on date of presentation of Bill of Entry. Customs Duty rates are: 1) Basic Customs Duty
@ 10% 2) social welfare surcharge @ 10%. Anti-dumping duty has been imposed on these goods
imported from China, manufactured by any producer in People's Republic of China. The anti-dumping
duty will be equal to the difference between the cost of commodity calculated @US $ 27.97 per kg and
the landed value of the commodity imported. IGST @ 5%. Compute Custom Duty liability and anti-
dumping duty payable.

3. Assessable value of tobacco products imported into India is ₹ 10,000. The rates of taxes on such
product are Basic Customs duty @ 37.5%, CVD @ 12%, IGST @ 28%, NCCD @ 1%, CVD @ 12.5%
and Compensation Cess @ 60%. Calculate Customs Duty Payable.
(B.Com, Mangalore University, September 2020, 2022)

4. Determine the customs duty payable under Customs Tariff Act, 1975 including the safeguard duty
of 20% under section 8B of the said Act with the following details given below:
Import of Sodium N from a developing country 20,00,000.
Share of Imports of Sodium N from the developing country against total imports of Sodium N to India
3.5%.
Basic Customs Duty 10%
IGST payable on such goods in India 18%
Social Welfare surcharge 10%
5. Determine the duty payable by Mr. Chinmay from the following details:
a) Assessable value of imported goods ₹ 5,00,000
b) A basic customs duty payable @ 10%
c) A goods is liable for payment of safeguard duty @ 15%
d) Compensation cess@ 28% and IGST @ 12%
(B.Com, Mangalore University, April 2018, October 2021)

6. From the following, calculate the customs duty payable:

a) Assessable value of imported goods ₹ 33,00,000.
b) Basic customs duty payable @ 10%.
c) IGST @ 18%.
d) Anti-dumping duty @ 10%.

7. Ajantha Ltd., imported 1,000 Quartz watches from China. The Assessable value is ₹ 5,00,000. Basic
Custom Duty is 10%. Anti-dumping Duty is ₹100 per watch and IGST @ 18%. Find out total customs
duty payable and cost of import.

8. Compute customs duty payable: Assessable value is ₹ 10,00,000. Basic Custom Duty - 10%,
Safeguard duty - 25%, Anti-dumping Duty is ₹ 10 per kg of imported goods. Total imported goods
10,000 kgs. IGST tariff on similar goods in India is 12% What is the cost of imported goods?
(B.Com, Mangalore University, April 2019)

Format for determining Assessable value of Goods

Particulars Amount in Amount
Foreign Currency in ₹
Cost of the goods at the factory of the exporter/ FOB value given XXX
Add: (if not included)
1. Accessories compulsorily supplied along with an imported goods XXX
2. Material and components by the buyer at free of cost XXX
3. Primary and secondary packing charges & special packing charges XXX
4. Cost of durable and returnable packing XXX
5. Technical know how XXX
6. Royalties & licence fees relating to imported goods payable by the buyer
as a condition of sale. XXX
7. Technical fees & technology transfer charges incurred outside India XXX
8. Installation charges paid to an exporter XXX
9. Design & development charges paid outside India XXX
10. Engineering and design charges XXX
11. Commission/ Brokerage to local agent of exporter
(except buying commission) XXX
12. Lighterage charges paid by the importer at port of importation XXX
13. Ship demurrage charges paid at port of importation XXX
14. Transport charges from the factory of exporter to the port for shipment XXX
15. Handling charges paid for loading the machine in the ship XXX
FOB Value for Customs purpose XXX
1. Freight charges from exporting country to India XXX
2. Cost of Insurance XXX
Assessable Value XXX

1. From the following particulars determine the Assessable value of the imported equipment from
Japan:
a) FOB cost of an equipment (Japanese Yen) - 2,00,000 Yen.
 b) Freight charges -20,000 Yen.
c) Transport charges from the factory of exporter to the port of shipment 5,000 Yen.
d) Handling charge paid for loading the ship 500 Yen.
e) Buying commission paid by the importer 500 Yen.
f) Charges for development connected to equipment paid in India ₹60,000.
g) Insurance charges paid in India for transportation from Japan ₹ 15,000
h) Commission payable to agent in India ₹ 15,000.
i) Exchange rate as per RBI is Yen ₹0.45
j) Exchange rate as per CBIC is 1 Yen= ₹ 0.50

2. A consignment is imported from US by air @ $ 10,000 on CIF basis. From the following information,
find out the value for customs purposes.
a) Freight incurred to import from US-$ 3,200
b) Insurance paid for transportation from US to India - $ 350
c) Following dollar rates are available on the date of presentation of Bill of Entry:
i) RBI Floor rate: ₹ 43.37 = $ 1
ii) Interbank closing rate: ₹43.38 = $ 1
iii) Rate notified by CBIC under section 14(3)(a)(i) of Customs Act: ₹43.55= $ 1
iv) Rate at which bank has realised the payment from importer: ₹ 43.58= $1

3. Compute the assessable value for purpose of determination of customs duty from the following data:
i. Machinery imported from USA by Air (FOB price) - $ 4,000.
ii. Accessories compulsorily supplied along with the machinery - $ 1,000.
iii. Licence fee, the buyer was required to pay in USA $ 400
iv. Air freight - USD 1,200.
v. Insurance charges - Accruals not available
vi. Local agent's commission to be paid in Indian Currency ₹ 9,300
vii. Transportation from Indian airport to factory ₹ 4,000
viii. Exchange rate $ 1=₹ 48.
Provide explanation where necessary

4. Chinmay Raj Ltd., imported a machinery from US by air. You are required to compute the value for
the purpose of determination of customs duty under the Customs Act, 1962 from following data:
1. Price of machinery - $ 6,000
2. Supplier paid $ 250 as freight on machinery from his factory to US port.
3. Freight paid-$- 2,000,
4. Insurance cost- $- 700
5. The bank had received payment from the importer at the exchange rate of $ 1= ₹ 46. While the
CBIC notified exchange rate on the relevant date was $ 1= ₹ 45.50.
6. Local agent's commission to be paid in Indian Currency ₹ 10,125.
7. Chinmay Raj Ltd., incurred design and development cost in India on behalf of supplier at cost
of ₹ 25,625.
8. Importer also incurred ₹ 15,000 as transportation charges on machinery from Indian port to his
place of business
9. The Importer also paid ₹ 30,000 to his agent who helps to import machinery from US.

5. Geetha Ltd., imported Tobacco products from UK by air. You are required to compute the assessable
value for purpose of determination of customs duty under the Customs Act, 1962 from the following
information:
a. FOB value of goods -8,000 UK Pounds
b. Freight paid-2,500 UK Pounds
c. Design and development charges paid in UK - 500 UK Pounds.
d. Commission payable to local agent @ 2% of FOB in Indian Currency.
e. Date of Bill of entry 24.10.2017 (Rate of basic customs duty 20%, IGST @ 18%, Exchange rate as
notified by CBIC ₹ 60 per UK Pound).
f. Date of entry inward - 20.10.2017 (Rate of Basic customs duty @ 18%, IGST @18%, Exchange rate
as notified by CBIC ₹ 58 per UK Pound)
g. Insurance charges are paid, but details are not available.
h. Apart from BCD and IGST tobacco product also attract 12% CVD and 30% as Compensation Cess
i. As per Notification issued by the Government of India, Safeguard duty has been imposed on this
goods @ 25% ad valorem.

6. A commodity is imported by Suvarna Ltd., from China. Determine the duty liability under the
Customs Act, 1962 from the following information:
a. Cost of the imported product $ 20,000
b. Commodity is packed for which packing charges $ 3,000
c. Commodity is stuffed in returnable container price of container is $100.
d. Design and development charges $ 500.
e. Paid commission in India to the broker who arranged the deal abroad ₹ 10,000.
f. Freight from China to Airport of New Delhi $ 6,000.
g. Cost of insurance is paid on product but no details available.
h. Transport cost incurred by supplier from his factory to Airport in China $ 200.
i. Suvarna Ltd paid ₹ 5,000 as transport cost from New Delhi airport to factory.
j. Suvarna Ltd sent goods to the exporter which was used in manufacturing the product ₹
1,00,000.
k. Date of Bill of Entry – 15/01/2018 (Rate of Basic Customs Duty @ 10%, IGST@ 28%
Exchange rate as notified by CBIC ₹ 50 per $).
l. Date of entry inward - 12.11.2017. (Rate of Basic Customs Duty @ 18%, IGST@ 28%
Exchange rate as notified by CBIC ₹ 53 per $).
m. Additional duty payable under section 3(5) of Customs Tariff Act, 1975 @ 16%.
n. Social welfare surcharge is as applicable.
o. As per Notification issued by the Government of India. Safeguard duty has been imposed on
these goods a 30% ad valorem.
p. As per the Notification No. 106/2003-Cus dated 10.07.2003, anti-dumping duty imposed on
these goods imported from China, manufactured by any producer in People's Republic of China
@ 40%.
q. Compensation cess applicable @ 30%.
(B.Com, Mangalore University, September 2022)

7. Some goods of 1,000 metric tonnes were imported from Korea by a charitable organization in India
for free distribution to BPL citizens in a backward area under the scheme designed by the Food and
Agricultural Organization. This being a special transaction, a nominal price of US $ 25 per metric tonne
was charged for the consignment to cover the freight and insurance charges. The Customs House found
out that at or about the time of importation of this gift consignment there were following imports of
product of Korean origin:
i. Quantity imported 20 metric tonnes at Unit price 260 US $ CIF.
ii. Quantity imported 100 metric tonnes at Unit price 220 US $ CIF.
iii. Quantity imported 500 metric tonnes at Unit price 200 US $ CIF.
iv. Quantity imported 900 metre tonnes at Unit price 175 US $ CIF.
v. Quantity imported 400 metric tonnes at Unit price 180 US $ CIF.
vi. Quantity imported 780 metric tonnes at Unit price 160 US $ CIF.
The rate of exchange on the relevant date was 1 US $= ₹63 and the rate of BCD was 10% ad
valorem. Calculate the amount of duty payable on the consignment if IGST is 12%.
8. Nakshatra Ltd., imported 25 machines from Japan @ 65,000 Yens per machine. However, the
following expenses are not included in the price of the machine
1. Design and development charges 15,000 Yens.
2. Nakshatra Ltd., supplied moulds to Japan supplier which cost of 9,000 yens.
3. Packing charges 9,800 Yens.
4. Containers are used to pack the machine which cost 1,600 yens per container.
5. Brokerage 8,000 Yens.
6. Buying commission paid to an agent for representing Nakshtra Ltd. in Indian Rupees ₹ 4,500.
7. Transportation charges incurred by Nakshatra Ltd., from port to godown ₹ 2,300.
8. Insurance premium paid in Indian from port to godown ₹ 800.
9. Octroi ₹ 300.
10. Technical knowhow rendered by Nakshatra Ltd, to supplier cost of ₹ 2,800.
11. Amount paid to an employee of exporter for assembling the machine in India ₹ 3,200.
12. Exporter paid cost of transport and insurance on machinery up to Indian port, but details are
not available.
13. Rate of duty: BCD @ 10% social welfare surcharge as applicable
14. IGST payable as per GST law @ 12% and compensation cess applicable @ 18%.
15. As per Notification issued by the Government of India, Safeguard duty has been imposed on
@ 30% and Anti-dumping duty @ 10% on Assessable value.
From the above information, you are required to calculate customs value for purpose of determination
of Assessable value and also calculate duty liability. Exchange rate specified by CBIC is I Yen = ₹ 0.53
(B.Com, Mangalore University, October, 2021)

9. Sharadhi an importer imported cigars from London and furnished the following information to
compute the liability to customs authority as duty. Calculate Assessable value and total duty payable
on cigars.
1. Cost of the cigars $ 2,000 .
2. Design and development charges of $ 200 were paid to a consultancy firm in USA.
3. Royalty of $ 50 paid by exporter to a Japan company.
4. Primary and secondary packing charges incurred $ 50.
5. Exporter spent $ 30 towards labours those who are exclusively engaged in packing process.
6. Importer spent an amount of ₹ 15,000 in India for development work connected with the cigars
manufacturing process.
7. ₹ 2000 were spent in transporting cigars from Indian port to the factory of importer
8. Expenses incurred by a seller for further improving the designing of cigars at importers request $ 20.
9. Cost of additional work done in India on cigars ₹ 1,000.
10 Commission paid to local agents 2% on FOB.
11. Rate of exchange as per CBIC 1 $ = ₹ 60.
12. As per CBIC notification importer is liable to pay BCD @ 15%, CVD @ 12%, NCCD @ 1%, IGST
@ 28% and GST compensation Cess @ 40%.
13. As per Notification issued by the Government of India, Safeguard duty @ 15% and Antidumping
duty @ 25% has been imposed on these goods.
(B.Com, Mangalore University, September 2020)

10. Holla and Co imported a Machine from USA for furtherance of sale in India. Firm furnishes the
following information. Compute assessable value and duty payable
1. Cost of Machine $ 10,000.
2. Cost of materials sent by importer for manufacturing the machine $ 1,000.
3. Design and development charges incurred outside India $ 500.
 4. Technical fees paid to exporter after import of machine $ 100.
5. Installation charges of machine in India $ 100.
6. Paid to the broker who arranged the deal in USA @ 2% of FOB price.
7. Cost of materials and labour for packing $ 50.
8. Cost of transport from the factory of exporter to port $ 30.
9. Cost of design work which done in India supplied by importer to exporter in connection with
the machine ₹ 2,000.
10. Amount paid to an employee of importer for assembling ₹ 1,000.
11. Cost of further development work done in India ₹ 2,500.
12. Freight charges $200.
13. Cost of transit insurance $ 50.
14. Rate of exchange per CBIC ₹ 64/ $.
15. Rate of BCD @ 15%, IGST @ 12%, Compensation cess @ 20%

11. Abhish Ltd., imported a machine from Europe. From the following information, determine the
customs duty payable:
a) Cost of machine 25,000 Euro, but it does not include the goods used in manufacturing the machine
sent by Abhish Ltd. to an export ₹ 1,00,000.
b) Design and development expenses incurred outside India 5,000 Euro.
c) Technical fees paid to exporter after import of machine 4,000 Euro
d) Installation charges of machine in the factory ₹ 50,000.
e) Packing charges 500 Euro
f) Insurance premium paid in India 500 Euro
g) Transportation charges 1,000 Euro.
h) Transportation and insurance charges from port to factory ₹ 10,000.
i) Rate of Basic customs duty 12.5%.
j) IGST 28% and Compensation cess @ 20%
k) Exchange rate declared by board ₹ 74per Euro
l) Exchange rate declared by the RBI ₹ 72 per Euro.
(B.Com, Mangalore University April 2018)

12. Mr Narendra Printers, Mangalore imported 10 IBM computers from USA and a latest new printer
from France and furnishes the following information:
a) Price per computer is $ 500 and printer is € 5,000
b) Packing charges per computer $ 10 and printer € 100
c) Air transportation charges up to Bajpe airport for computers $ 500 and for printer € 250 upto New
Mangalore Port.
d) Transit insurance $ 500 for computers and € 150 for printer.
e) Brokerage paid to agent of exporters $175 for computers and € 125 for printer
f) Lorry freight for transporting computers and printer to M/s Narendra Printers, Mangalore₹ 3,000 and
₹ 2,000 respectively.
g) Rate of exchange: $ = ₹ 64 and €=₹ 74.
Compute the assessable value and custom duty payable.
Rates of Custom Duty: BCD - 12.5% and IGST - 18%
(B.Com, Mangalore University April 2018, 2020, 2021)

13. General Motors Ltd., Chennai imported machinery from Astra Opel. Germany. The financial terms
were as follows:
Cost of machine 10,000 Euros.
Cost of container 200 Euros.
Technology transfer charges payable to G. Motors, USA 1000 Euros
Cost of sea freight 1,500 Euros.
Insurance ₹ 10,000
The importer donated 1,000 Euro to Opel foundation, Germany, a non- profit organisation engaged in
fighting AIDS. The rate of exchange on the date of submission of bill of entry is 1 Euro = ₹82.
Compute the assessable value and customs duty payable if customs tariff is 10% and IGST 28%.

14. An importer from Cochin imports goods from an exporter in USA. The vessel carrying the goods
reaches Mumbai port first and from there goods are transhipped to Cochin port. From the following
particulars, compute assessable value and customs duty payable
1) Cost of machine imported $ 40,000.
2) Packing charges $ 500
3) Commission paid to broker @ 5% on cost of machine
4) Design and development charges incurred outside India $ 4,000.
5) Technical fees paid $ 5,000.
6) Freight charges from USA to India $ 4,000
7) Transport charges from Mumbai port to Cochin port ₹ 25,000
8) Insurance $ 3,000.
9) Materials supplied by the importer ₹ 1,50,000.
10) Transportation charges and insurance premium from port to factory ₹ 60,000
11) BCD @ 12.5% IGST payable @ 12% and Safeguard duty @ 10%
12) Compensation cess @ 25%
13) Exchange rate 1 $ =₹ 65

15. Compute the Assessable value and total customs duty payable under the Customs Act 1962 for an
imported machine, based on the following information
Particulars US $
Cost of the machine at the factory of the exporter 20,000
Transport charges from the factory of exporter to port for shipment 800
Handling charges paid for loading the machine in the ship 50
Buying commission paid by the importer 100
Litghterage charges paid by the importer. 300
Freight and insurance (1000+200) incurred from port of entry to inland container depot 1,200
Ship demurrage charges 300
Freight charges from exporting country to India (insurance up to India is 4,000
unascertainable)
Loading, unloading und handling charges (includes $100 incurred @ Indian port) 1,100
Date of Bill of Entry 20.03.2018 : Rate of BCD 20%
Exchange rate as notified by CBIC ₹ 60 per $
Date of Entry Inward 29.3.2018: Rate of BCD 10%
Exchange rate as notified by CBIC ₹ 65 per $
IGST 12%
GST Compensation Cess 10%

16. An importer has imported raw materials from America at a cost of $ 50,000. Other details are as
follows:
a) Goods were packed for which packing charges were charged $ 5,000.
b) Goods were stuffed in returnable; price of container is $ 2,000.
c) Insurance Charges $ 250.
d) Sea Freight Charges $4,000.
e)Importer had paid commission to broker in America who arranged the transaction $ 500.
f) Rate of Exchange 1$ = ₹ 60
g) Customs duty @ 10%.
h) Integrated Tax u/s 3(7) of Customs Tariff Act, 1975 @ 12%.
i) Social Welfare Surcharge @ 10%
Find out the customs duty payable
Note: Ignore compensation cess under GST.
17. Galaxy Colour Labs has imported a new film processing unit from Konica, Singapore. Following
are the details of import:
a) Cost of machine $ 40,000
b) Cost of spare parts and accessories $ 300
c) Packing charges (including durable packing $50): $ 250,
d) Licence fees payable to Konica Japan $5,000
e) Air freight: $ 600
f) Insurance ₹ 40,000
g) Installation charges payable to Konica India, Bangalore ₹ 25,000.
h) Commission to their agent in Singapore $ 400
i) Unloading and handling charges ₹ 30,000
j) Freight from airport to the business premises ₹ 10,000.
k) Date of entry inwards 02.02.2022, exchange rate 1 $ = ₹ 66
l) Date of submission of bill of entry 30.01.2022, exchange rate 1$ = ₹ 65
Calculate assessable value and customs duty payable if GST on similar goods is 18%
(B.Com, Mangalore University April 2019)

Illustration 18
Mr. Vivek imported second-hand goods from a UK supplier by air, which was contracted on CIF basis.
However, there were changes in prices in the international market between the date of contract and
actual importation. As a result of several negotiations, the parties agreed for a negotiated price payable
as follows:
Particulars Contract Price (£) Changed Price (£) Negotiated Price (£)
CIF value 5,000 5,800 5,500
Air Freight 300 600 500
Insurance 500 650 600
Other details for computing assessable value and duty payable are as follows:
a. Vender inspection charges (inspection carried out by foreign supplier on his own, not required
under contract or for making the goods ready for shipment) ₹ 600
b. Commission payable to local agent @ 1% of FOB in local currency.
c. Date of Bill of Entry on 18.02.2020.
d. Basic customs Duty @ 10% on the date of BOE.
e. Exchange rate (notified by CBIC) ₹ 102 on the date of BOE.
f. Date of arrival of aircraft on 15.02.2020.
g. Basic customs Duty @ 15% on the date of arrival of aircraft.
h. Exchange rate (notified by CBIC) ₹ 98 on the date of arrival of aircraft.
i. Inter-bank rate UK Pound = ₹ 106.
Compute the assessable value and Basic customs duty payable by Mr. Vivek.

19. An Indian dealer imported a Computer from London. From the following information, determine
the Assessable value and Custom Duty payable (Rate of Exchange 1 Pound = Rs. 80)
a. Cost of the Computer 10,000 pounds
b. Packing charges 500 pound
c. Transportation charges by sea 3,000 pounds.
d. Commission paid to the broker of the exporter who arranged the deal 100 Pounds.
e. Commission paid to his Agent to settle the price of the computer 200 pounds.
f. Amount paid to an employee of exporter for assembling in India 3.000 pounds
g. The importer had sent certain software worth Rs. 1,00,000 to be installed in the computer free of
cost. h. As per the terms, the buyer had to pay a royalty of 2,000 pounds to IBM Japan for transfer of
technology
i. Design and development expenses incurred outside India 3,000 Pounds.
j. Insurance premium 500 pounds.
k Transpiration charges from port to the factory and insurance premium Rs. 10,000.
l. Basic Custom Duty @ 10%, Social Welfare Surcharge @ 10% and IGST @ 28%.

20. A imports a machinery by Sea from Japan, complete with the accessories and spares. FOB value
2,00,000 Japanese Yen. Other relevant information: Packing charges 500 pound
a. 61,000 has been incurred for improving the design, etc. of machine, paid in India.
b. Insurance charges paid in India for transportation from Japan but not ascertainable.
c. Freight also incurred.
d. Commission to be paid to local agent of the importer in India ₹ 4,500.
e. Freight and insurance from port to factory is ₹ 14,500.
f. The machine was packed in returnable container which cost 3.000 Japanese Yen.
g. Exchange rate is 1 Japanese yen = Rs. 0.51.
h BCD 10%. Safe guard duty @ 15% on Assessable value and IGST @ 18%.