VALUE FOR DUTY VALUATION

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VALUE FOR DUTY VALUATION

• A discussion on the process of determination of
• Value for Customs purposes

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Our means of attack

• Class discussion
• Notes, diagrams
• Theory questions
• Practical exercises
• Class instruction as required
• On-line access

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Value for Customs

• Sale
• Level
• Charges, costs and expenses
• include
• exclude

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How do we get there?

• Legislation
• Understanding
• Rationalization

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How do we get there?

• Build the tree!
• A process of
• inclusion
• elimination
• justification

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Customs Value

• Basic principles?
• Based on GATT Agreement
• Value in the commercial transaction
• Standardization of influences
• Level of sale

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GATT Agreement

• Transaction Value
• Identical Goods
• Similar Goods
• Computed Value
• Deductive Value
• Fall Back Value

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Transaction Value

• Value in the commercial Transaction
• Transaction Value
• Section 159(1)
• Section 161

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Transaction Value (S161)

Adjusted Price S161(2) in the Import Sales
Transaction
Price Related Costs
- Deductible Financing Costs - Costs
for gtassembly, erection, construction,
maintenance technical assistance
gtpost-importation, and gtable to be
accurately quantified - Aust. Inland Freight
Insurance - Deductible Financing Costs -
Deductible administrative costs - Overseas
Freight Insurance
- production assist costs - packing costs -
foreign inland freight insurance - commissions,
other than buying - royalties licence fees -
proceeds of subsequent resale
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Exercises gt Explain what they are and when
they are used

• Import Sales Transaction
• Deductible Financing Costs
• Assembly, maintenance, technical assistance
• Australian Inland freight Insurance
• Deductible Administrative Expenses
• Overseas Freight Insurance

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Place of Export

• Posted
• Packed in a container
• Self-transported goods
• Placed on ship or aircraft for export
• Border of exporting country
• As determined in a particular instance

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Place of Export

• Refer definition of
• Foreign Inland Freight/Insurance
• Overseas Freight/Insurance
• Exchange Rates
• Section 161(J)(4)
• Day of Exportation

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Exercises gt Explain what these are

• Price
• Price related costs
• production assist costs
• purchasers material costs
• purchasers tooling costs
• purchasers work costs
• purchasers subsidiary costs
• packing costs
• foreign inland freight insurance
• buying commission
• royalties
• proceeds of subsequent resale

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Purchasers material costs

• Production materials
• supplied directly or indirectly
• free of charge or at reduced cost
• cost of acquisition
• cost of production
• Cost of transporting
• Cost of repairs or alterations

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Purchasers subsidiary costs

• Subsidiary Goods
• Work Goods
• supplied directly or indirectly
• free of charge or at reduced cost
• cost of acquisition
• cost of production
• Cost of transporting
• Cost of repairs or alterations outside Australia

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Purchasers subsidiary costs

• Subsidiary Services
• supplied by an unrelated person
• cost of supply
• supplied by a related person
• as determined
• Cost of further services other than work services
• Cost of further services outside Australia
  relating to work services

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Purchasers work costs

• Work Goods or Work Services
• supplied by an unrelated person
• cost of acquisition
• cost of production
• supplied by a related person
• as determined
• Cost of transporting and/or repairs outside
  Australia
• Cost of work services or further services outside
  Australia relating to work services

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Packing Costs

• Materials and Labour
• by or on behalf of the purchaser
• in respect of the goods
• preparing the goods for export to Australia
• fumigating, cleaning, coating,wrapping
• placing them in the condition in which imported
• excludes exempted pallets or containers

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Commissions

• Refer S155 - Buying Commissions
• acting on behalf of the purchaser
• in the Import Sales Transaction
• Excludes commissions paid where the agent acts as
  a principal in the Import Sales Transaction or in
  similar transactions or provides other services

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Royalties

• In respect of the imported goods S154(1)
• Refer S157
• Amount paid or credited as consideration for
• making, use exercise, vending of invention
• right to use design, trademark, information,
  equipt
• technical knowledge
• supply of assistance
• Regardless of when paid

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Questions?

• Transaction Value
• Exam questions focus on
• Determination of price
• Application of charges
• be aware when provided with a list of costs
• some may be already included
• External elements
• commissions, royalties
• External influences
• exchange rates
• Intrinsic influences
• assists

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Other than Transaction Value

• Rare to get a question on this area
• Identical Goods
• Similar Goods
• Computed Value
• Deductive Value
• Fall Back Value

BUT WE SHOULD COVER THEM!
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Other than Transaction Value

• When Transaction Value unable to be determined
• Section 161H
• No Import Sales Transaction
• Transaction Value unable to be determined
• Later sale is subject to restrictions, other
  than
• imposed by Australian law
• impose geographical limits
• do not affect commercial value of the goods

RELATED PERSONS S154(3) S161H(2)
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• Identical Goods s156(1)
• same in all material respects
• produced in the same country
• produced by the same manufacturer
• Identical Goods Value S161(A)
• comparable identical goods
• unit price

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• Similar Goods S156(3)
• closely resemble the imported goods physically
• functionally and commercially interchangeable
• produced in the same country as the imported
  goods
• produced by or on behalf of the producer of the
  imported goods
• Similar Goods Value S161(B)
• comparable similar goods
• unit price

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Deductive Value Contemporary sales S161C -
at or about the same time - same level - no
relationship or assists - sufficient number of
units - reference sale
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Deductive Value Later sales S161D - within
90 days - same level - no relationship or
assists - sufficient number of units -
reference sale - unit price
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Deductive Value Derived goods sales
S161D - derived goods - derived goods
sale - within 90 days - same level -
no relationship or assists - sufficient number
of units - reference sale - unit price
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Computed Value S161F The sum of Australian
arranged - material costs - subsidiary
costs - tooling costs - work costs Value of
other production goods costs Other production
costs, charges expenses Profit expenses as
are usually added Packing costs Foreign Inland
Freight Insurance
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Fall Back Value Start again as per S159, except
for selling price in Australia higher of 2
value domestic value cost of production other
than for identical or similar goods sale
price to another country minimum
values arbitrary or fictitious values
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Questions?

• Other than Transaction Value
• Exam questions unusual.
• Theory Questions
• Focus on
• Determination of price - which method would you
  use?
• - Consider the options, what would you look for?
• Determination of dutiable costs, charges
  expenses
• - External elements
• commissions, royalties
• - External influences
• exchange rates
• - Intrinsic influences
• assists

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Questions?

• Other than Transaction Value
• Practical Questions
• Focus on
• Determination of price - which method would you
  use?
• Consider the options - what information is
  provided?
• Determination of components to consider
• Determination of dutiable costs, charges
  expenses
• External elements
• commissions, royalties
• External influences
• exchange rates
• Intrinsic influences
• assists

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Questions?