Assessable Value Calculation: A Comprehensive Guide To Customs Valuation

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As an importer, you must be 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 from “IndianCustoms.Info”. This article explains how to calculate the Assessable value, IGST Assessable 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 provided an old method of assessable value calculation.

Wasting lots of time on the internet I came to know 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 in this blog.

Assessable value calculation is a crucial part of the customs valuation process.

It determines the value of imported goods to assess customs duty, import/export duty, and other charges.

I’m sure that this article will solve all your queries regarding the Assessable value, CIF value, IGST assessable value, customs duty, 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.

What is Assessable Value Calculation?

Assessable value is the value of imported goods to calculate customs duty and other charges.

It includes the transaction value of the goods, plus any additional costs incurred during transportation, insurance, and other related expenses.

Assessable value calculation is the process of determining the value of imported goods for customs purposes.

Factors Affecting Assessable Value Calculation

Several factors can affect the assessable value calculation, including:

  1. The transaction value of the goods
  2. Related expenses, such as transportation and insurance costs
  3. Currency exchange rates
  4. Discounts and rebates
  5. Royalties and license fees
  6. Commissions and brokerage fees
  7. Packaging and container costs
  8. Any additional charges incurred during the importation process

Understanding these factors is essential for optimizing your import/export business and minimizing your customs duty and other charges.

Now let’s move on to the method of assessable value calculation.

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 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.

How To Calculate Customs Duty

Import Customs Duty Calculation.

Customs duty is calculated based on AV. Here below I had explained the complete calculation process.

Before starting, you need to under what is the total customs duty and what is included in the total customs duty.

In normal imports, 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.

For Example:-

IGST value Calculation :- Rs.1211.25 (AV) + Rs.121.125 (BCD) + Rs.12.1125/- (SWS) = Rs.1344.4875/- (IGST Value)

Landed Value Calculation 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).

For Example:-

Assessable value (AV) = Rs.1211.25/- + Basic Customs Duty (BCD) = RS.121.125/-

Landed Value = 1,332.375 (LV)

Conclusion

Assessable value calculation is a critical component of the customs valuation process.

Understanding the factors that affect assessable value calculation and following the proper formula can help you optimize your import/export business and minimize your customs duty and other charges.

By following the expert tips provided in this comprehensive guide, you can ensure that your import/export business is successful and profitable.

FAQ On Assessable Value

What is the meaning of the term “Assessable Value” in the context of Indian customs?

Assessable Value is the value of goods determined for calculating customs duty in India. It is the transaction value of imported goods, which includes the price paid or payable for the goods when sold for export to India, adjusted by the provisions of the Customs Act, of 1962.

How is the assessable value of imported goods determined in India?

In India, the assessable value of imported goods is determined based on the transaction value of the goods, which is the price paid or payable for the goods when sold for export to India, adjusted for certain expenses and charges as specified under the Customs Act, 1962.

How does the assessment of the value of goods differ for exports and imports in India?

In India, for assessment of customs duty, the value of goods is determined differently for exports and imports. For exports, the assessable value is the transaction value of the goods, while for imports, it is the transaction value adjusted as per the provisions of the Customs Act, 1962, to include certain expenses and charges incurred in transporting the goods to the port of importation.

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