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Sun and Moon Ltd is planning to import a machinery by air from USA. The company is evaluating two different scenarios. You are required to compute…

CA Final · Indirect Tax Laws · PYQS · January 2026

Sun and Moon Ltd is planning to import a machinery by air from USA. The company is evaluating two different scenarios. You are required to compute assessable value for levy of customs duty under each of the scenarios given below: Scenario-1: FOB US $ 40000, freight, loading, unloading and handling charges associated with the delivery of the imported goods to the place of importation is not known, cost of Insurance to the place of importation is US $ 200. Scenario-2: FOB-Unascertainable, sum of FOB and cost of Insurance to the place of importation is US $ 40,200, freight, loading, unloading and handling charges associated with the delivery of the imported goods to the place of importation are not known. Insurance charges are not known separately. Further, you are also required to comment on the inclusion of the following charges in the assessable value: Sl. No. Particulars (i) Transhipment charges to another customs station in India, and the cost of insurance, transport, loading, unloading handing charges associated with such transshipment. (ii) Material and component supplied in USA by buyer free of cost

Suggested Answer and Working Notes:

Answer (c) Computation of assessable value Particulars Amount ($) Scenario-1 FOB 40,000 Add: Freight, loading, etc. [20% of FOB since such cost is not ascertainable.] 8,000 Add: Cost of insurance [Actual charges are includible.] 200 Assessable value/CIF 48,200 Scenario-2 Sum of FOB and cost of insurance to the place of importation 40,200 Add: Freight, loading, etc. [20% of (FOB +Insurance) since such cost is not ascertainable.] 8,040 Assessable value/CIF 48,240 Further, transshipment charges to another customs station in India, and the cost of insurance, transport, loading, unloading, handling charges associated with transshipment of imported goods to another customs station in India are not includible in the assessable value. Materials and components supplied in USA by the buyer free of cost are includible in the assessable value.

Topics: Customs: Valuation under the Customs Act, 1962

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Sun and Moon Ltd is planning to import a machinery by air from USA. The company is evaluating two different scenarios. You are required to compute…

Suggested Answer and Working Notes:

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