A machinery part was sent abroad for repairs under a free warranty, so the foreign repairer charged nothing. Its fair cost of repairs, including…

CA Final · Indirect Tax Laws · MTP · November 2026
A machinery part was sent abroad for repairs under a free warranty, so the foreign repairer charged nothing. Its fair cost of repairs, including materials, was ₹ 50,000. freight (both ways) was ₹ 20,000 and insurance (both ways) ₹ 5,000. The assessable value on re-import is:
(A) Nil
(B) ₹ 25,000
(C) ₹ 50,000
(D) ₹ 75,000

Suggested Answer and Working Notes:

Correct Answer: Option (D)

Basis: Notification No. 45/2017-Customs. For re-imported goods after repair, even if repairs are carried out free of cost under warranty, assessable value is fair cost of repairs (₹ 50,000) + freight both ways (₹ 20,000) + insurance both ways (₹ 5,000) = ₹ 75,000.

Topics: Customs: Valuation under the Customs Act, 1962

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic