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Valuation of second hand machinery

..... oms North Block. New Delhi Dated the 05th February, 2020 To, All Principal Chief Commissioners/Chief Commissioners of Customs, Principal Directors General/Directors General of Customs, Principal Commissioners/Commissioner of Customs. Madam/Sir, Subject: -regarding Representations have been received from the trade regarding Circular No. 25/2015 -Customs dated 15th October, 2015 on . For this purpose, the circular requires customs to rely upon inspection report either issued at the port of loading by overseas Chartered Engineer or issued upon import by a pre-shipment inspection agency (PSIA) notified by DGFT, or by a chartered engineer empanelled by the Custom House where the DGFT approved PSIAs are not available. 2. It has been represented that the PSIAs empanelled by DGFT are insufficient in number leading to delay in clearances. It has also been informed that PSIAs empanelled by DGFT are not qualified for appraising second hand machinery. 3. In this regard, DGFT vide O.M. No. 01/93/180/51/AM-16/PC II(B)/E-1500/176 dated 3rd September 2019, has clarified that PSIAs are meant only for certifying that consignments of metal scrap are free of radio-active agents and explosives. The PSI .....

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..... ds being appraised, may preclude the application of this method. 4.5 Under Rule 8 of the CVR, 2007, goods are valued using the computed value method which is based, among other things on the cost of production of the goods being appraised plus an amount for profit and general expenses. However, since used capital goods are not manufactured as such, viz, as old and used machinery, it is not possible to calculate assessable value based upon the cost of production. 4.6 It follows that in cases where used capital goods cannot be appraised under Rule 3, and where there may be difficulty in applying Rules 4 to 8 of the CVR, 2007, the proper officer may be required to apply the residual method under Rule 9 so as to factor condition, depreciation, refurbishment. charges of disassembly & packing and any expenses incurred by way of pre-shipment inspection agency charges etc. 4.7 Given the nature of challenges in computing the value of second hand machinery under Rule 9, and the need to ensure that the approach applied reflects commercial reality and results in a value which is fair, and is arrived through uniform processes by all Custom Houses, it is felt that it is necessary to obtain i .....

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..... port of inspection/appraisernent of the goods, he may have the goods inspected by any one of the Chartered Engineers empanelled locally by the respective Custom Houses. (d) In cases where the report is to be prepared by the Chartered Engineers empanelled by Custom Houses, the same shall be in the Form B annexed to this circular. (e) The value declared by the importer shall be examined with respect to the report of the Chartered Engineer. Similarly, the declared value shall be examined with respect to the depreciated value of the goods determined in terms of the circular No. 493/124/86-Cus VI dated 19/11/1987 and dated 4/1/1988. If such comparison does not create any doubt regarding the declared value of the goods, the same may be appraised under rule 3 of the CVR, 2007. If there are significant differences arising from such comparison, Rule 12 of the CVR, 2007 requires that the proper officer shall seek an explanation from the importer justifying the declared value. The proper officer may then evaluate the evidence put forth by the importer and after giving due consideration to factors such as depreciation, refurbishment or reconditioning (if any), and condition of the goods, deter .....

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..... 2015-20 (Please attach close up photographs of the machinery; multiple photographs may be taken, if necessary.) (ix) Has any reconditioning or repairs been carried out immediately preceding this inspection: YES/No (x) If yes, have these been carried out at the expense of the seller or by the purchaser or a third party? (xi) Are there invoices to indicate the cost thereof: ITS/NO (please enclose relevant invoices) (xii) If No. then estimated cost thereof____ (xiii) Please briefly describe the nature of repairs and/or refurbishment: (xiv) Are there any charges incurred / to be incurred by the purchaser, for dismantling. packing and transporting the machinery to the port of export? If yes. pl indicate the charges____ (xv) Any catalogues/documentation of the machine are available? If yes, please provide the details and copies. e) The following means/aids/technical references material have been used for inspecting the goods: (i) ____________________________ (ii) ______________________________ (iii) ________________________________ 3. I/We hereby declare that the particulars and statements made in this certificate are true and correct. Date ______ Signature _______________ Seal of the I .....

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..... 15-20 _________________________________________ _________________________________________ _________________________________________ (Please attach close up photographs of the machinery: multiple photographs may he taken, if necessary.) (ix) Has any reconditioning or repairs been carried out immediately preceding this inspection: YES/No (x) If yes. have these been carried out at the expense of the seller or by the purchaser or a third party? (xi) Are there invoices to indicate the cost thereof: YES/NO (please enclose relevant invoices) (xii) If then estimated cost thereof_________________ (xiii) Please briefly describe the nature of repairs and/or refurbishment: (xiv) Were any charges incurred by the purchaser, for dismantling, packing and transporting the machinery to the port of export? If yes, please indicate the charges_______ (xv) Is/are any catalogues/documentation of the machine available? If yes. please provide the details and copies. d) The following means/aids/technical reference material have been used for inspecting the goods: i) _____________________________ ii) ______________________________ iii) _______________________________ 3. I/We hereby declare that the particula .....

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