Demurrage charges and despatch money Not to form part of the assessable value - Customs - F. No. 467/21/89-Cus.V

Demurrage charges and despatch money Not to form part of the assessable value F. No. 467/21/89-Cus.V Dated 14-8-1991 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs New Delhi Subject : Demurrage charges and despatch money Not to form part of the assessable value - Regarding. The Kandla Custom House had raised the issue relating to the inclusion of demurrage charges and exclusion of despatch money for computing the assessable value ascertainable under Section 14 of the Customs Act, 1962. Pursuant to the decision taken in the Tariff Conference of Collectors held in August, 1981, the issue was further discussed in the Tariff Conference of February, 1989. The Conference had desired that the matter may be re-examined in its totality especially in the context of current valuation principles based on the GATT Valuation at Goa on 4th and 5th April, 1991 examined the problem posed in entirety. The conference came to the conclusion that in the post-despatch money would not constitute elements of value since element for the carriage. These moneys are in the nature of penalties or rewards by virtue of a contracted charterer agreement between the carrier and the charterer and this in no way could be conceived as being part of the freight or for that matter part of the price actually paid or payable for the goods. Having regard to the above and the fact that in no other Custom House there was a practice to include or deduct such moneys, it has been decided that 'demurrage' and 'despatch' money may not form a part of assessable value.