Milly Ltd. imported a machinery from USA. The machine reaches Delhi Airport first and then from there, it is transshipped to Dehradun. From the…
CA Final · Indirect Tax Laws · MTP · November 2026
Milly Ltd. imported a machinery from USA. The machine reaches Delhi Airport first and then from there, it is transshipped to Dehradun. From the following details furnished, compute the assessable value (up to nearest rupee) for the purpose of customs duty payment: S. No. Particulars Amount (i) Price of the machine US $ 15,000 (ii) Air freight US $ 4,000 (iii) License fee relating to imported goods payable by the buyer as a condition of sale 15% of price of machine (iv) Drawing charges paid to an architect in India ₹25,000 (v) Commission (not buying commission) paid by the buyer to agent of exporter in USA US $ 250 Other details for computing the assessable value are as under: (i) Insurance charges paid in India-Not ascertainable. (ii) Material supplied in USA by the buyer free of cost valued at ₹ 75,000. (iii) Importer paid transshipment charges from Delhi Airport to Dehradun ₹ 1,00,000. (iv) Importer paid ₹ 20,000 towards demurrage charges for delay in transport of the machine from Delhi airport. (v) Exchange rate to be considered is ₹ 70 per US$. Note: Price of the machine (US $ 15,000) given at serial number (i) of table above is excluding of any of the amounts given thereafter. Working notes should form part of your answer.
Suggested Answer and Working Notes:
Computation of assessable value Particulars Amount ($) Price of the machine 15,000 Add: License fee [Licence fee relating to imported goods is includible since it is payable by the buyer as a condition of sale.] 2,250 Add: Drawing charges [Not includible since undertaken in India.] - Add: Commission paid by buyer to agent of exporter [Includible since it is not buying commission] 250 Total 17,500 Amount (₹) Value in Indian currency [$ 17,500 x 70] 12,25,000 Add: Material supplied by the buyer free of cost [Includible in the assessable value] 75,000 FOB value 13,00,000 Add: Air Freight [Restricted to 20% of FOB value since goods are imported by air.] 2,60,000 Add: Demurrage charges [Not includible.] Add: Insurance charges [1.125% of FOB value since insurance charges are not ascertainable] 14,625 Add: Transshipment charges from Delhi Airport to Dehradun [Since these charges are incurred within India, they are not includible in the assessable value] - Assessable value 15,74,625
Topics: Customs: Valuation under the Customs Act, 1962
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