As an importer, you must aware of the Assessable value, CIF value, and other value calculations.
Therefore why here I covered everything you need to know.
Carefully check the calculation provided in this article, If you have any queries please ask in the comment box.
Hello, friends welcome to another fresh article of “IndianCustoms.Info”. This article explains how to calculate the Assessable value, IGST Value, customs duty, and Landed value.
Once when I search on google to know the latest method to calculate AV. I did not find any updated calculation method.
After checking lots of sites, I came to know that all the sites providing an old method of calculating the assessable value.
Wasting lots of time on the internet I find that On 26th September 2017, the calculation method of AV was changed.
But still, none of the sites updates the new method of assessable value calculation. So, I decided to explain the new method of AV calculation on this blog.
I’m sure that this article will solve all your queries regarding the Assessable value, CIF value, IGST Value, customs duty, and Landed value calculation, etc…
This article contains all the methods of calculating values covered under import customs clearance.
If you think anything is missing or you are confused about any method please ask your queries in the comment box.
Also Check:- Best Import Documentation Course [Basics To Advance]
Assessable Value Calculation For Customs.
Before calculating assessable value you to understand the Incoterms of your shipment.
In customs, an assessable value is calculated for the calculation of customs duty.
Assessable value = Cost + Insurance + Freight+ Handling charges. to calculate the AV, You need to calculate the CIF value.
As per Circular 39/2017-Customs, The CIF value and Assessable value are the same.
(CIF) value is the actual value of the goods when they are shipped. As duties are calculated based on the CIF value, they must be calculated correctly.
To find CIF value, the freight and insurance costs are to be added. 20% of the FOB value is taken as freight. It Means Rs.1000.00. Insurance is calculated as 1.125% – Rs.11.25.
- Invoice Value = Rs.1000/-
- Insurance Value = Rs. 11.25/-
- Freight Value = Rs.200/-
Rs.1000 (Invoice Value) + Rs. 11.25 (Insurance Value) + Rs.200 (Freight Value) = Rs.1211.25/- (CIF value)
CIF value = Rs.1211.25/- (Assessable Value)
Note:- The above calculation is for FOB & Ex-Work shipments.
If you want to know the AV calculation method in Hindi you can also watch the below video or continue the read article.
In the above video, I had explained how you can calculate the AV by using our Import Duty Calculator.
By using our Import duty calculator you can easily calculate the IGST Value, customs duty, Landed value, etc.
Also Read:- Freight Forwarder Importance In International Trade.
Import Customs Duty Calculation.
Customs duty is calculated based on AV. Here below I had explained the complete calculation process.
Before start, you need to under what is the total customs duty and what is included in the total customs duty.
In normal import Customs duty is the total of BCS, SWS & IGST.
- BCD – Basic customs Duty
- SWS – Social Welfare Surcharge
- IGST – Integrated Goods and Services Tax
If BCD (Basic Duty) is 10%, SWS (Social welfare surcharge) is 10%, and IGST is 18%
BCD:- Rs.1211.25/- (AV) x 10% = RS.121.125/- (Basic Duty).
SWS:- Rs.121.125 (Basic Duty) x 10% = Rs.12.1125/- (Social welfare surcharge)
IGST:- [Rs.1211.25 (AV) + Rs.121.125 (BCD) + Rs.12.1125/- (SWS)] x 18% = Rs.242.00775/- (IGST Amount)
Total Customs duty (Excluding IGST amount) = Rs.133.2375/-
Total Customs duty (Including IGST amount) = Rs.375.24525/-
You can also use our Import Duty calculator to calculate this value.
Also Read:- Faceless Assessment: Reality & Importance.
Calculation Of IGST Assessable Value.
IGST assessable value calculation is very simple.
To calculate IGST AV you need to add Assessable Value + Basic Customs Duty + Social Welfare Charges.
IGST value Calculation :- Rs.1211.25 (AV) + Rs.121.125 (BCD) + Rs.12.1125/- (SWS) = Rs.1344.4875/- (IGST Value)
Landed Value Calcualtion Of Customs.
If you have already calculated the AV and BCD, then Landed value calculation is very easy for you.
To calculate the Landed value, add the Assessable value (AV) and basic customs duty (BCD).
Assessable value (AV) = Rs.1211.25/- + Basic Customs Duty (BCD) = RS.121.125/-
Landed Value = 1,332.375 (LV)
I hope now you understand the new method of AV calculation for import customs duty in India. Comment below if anyone has any suggestions or queries regarding the Assessable Value, IGST Value, and Customs duty calculation.