Transcript for:
Key Customs Concepts for Exam Preparation

e e e e e e e e e e e e e e e e e e e e e good morning everyone how are you all fine so welcome to the rocket revision batch for November 24 exam and so happy to see you all and I don't want to see you thereafter yes why should I see you here I should not see you you understood what I mean to say yes so therefore uh this November 24 by hook or krook you all should clear somehow okay because uh May 25 is not good time actually because there are a number of amendments for May 25 already Finance act amendments are there and thereafter GST council meeting also and maybe someone has rubbed her on the wrong side so because of that reason I know lot of amendments are there and due to that reason somehow clear somehow clear and uh no other go for you and so lot of uh students were asking me will the Amendments be covered in this of course there are no much amendments from May 24th to November 24th that's what many students I told them that don't go for any new books and all because already whatever book that you are having existing book that will be sufficient if you are having May 24 book The Same Book can be used for November 24 as well you don't have to buy any new book and suppose if you are having like previous Edition books and all like uh say November 23 or May 23 Etc and all then you should definitely have the new book and next thing is that uh there are few very few Min new amendments that are there and uh this video is also being uh recorded and it is streamed live right now in YouTube we are streaming it so it will be there in YouTube as well so therefore uh in case if you are not able to understand any particular thing because the flow will be literally fast only so please don't expect me to go slow because this is rocket revision and the flag and I am doing it mainly for the purpose of know quick revision before the exam so therefore don't expect me to go very slow Etc and all and uh if you are attending this for the first time so of course you might not be attending this for the first time I know that but suppose if you attending it for the first time so disclaimer don't think that what he's speaking I'm not able to understand it like that because definitely this rocket revision is for those who already attended my class they will only be able to understand what I'm talking about others will not be able to understand anything okay then so what is that we are going to do in the next four days starting from today so we are going to complete this that's it book so that's it book already uh you might be having if you don't have you have to buy that because this is a last minute revision book suppose if you are already having a resource book and in that resource book at the end of each and every chapter I have given the summary so maybe you can make use of it if you have revised book also you can make use of it so because the content will be more or less the same extra points you can write because see if you buy a new book it is like revenue for me only but I myself I telling don't buy okay so because if you are already having what's the point in buying all the books and maintaining a library in your home so anyhow this portion will be changed so it will not be useful for anyone else also in future so whatever existing books that you have you can make use of it any extra points if you feel like you can make note because you can't keep on listening to the classes now you will get sleep okay so something writing also if it is there it will be nice for that reason so whatever existing book that you have you can make use of it if you don't have any book either resource book or Revis book Etc then you go for that sit book and then even what we are going to do is that because already I did for May 24 itself rocket revision and that we have already given to all the students in the form of test Series so we have created a test series and hope you are aware of the test series have you enrolled for the test series Etc yes yes so in the test series what I did I gave it like a schedule and I have given week one week two week three what is the portion in that itself I gave the revision videos plus I have given even the question paper explanation video suggested answers Etc so already we have done the revision so then compared to that May 24 revision to this revision what is the difference sir so why we should attend see uh Point number one this is not going to be something different from that because I cannot teach some other subject now I can teach indirect TXS only the same indirect tags only but only thing is that little bit we are changing the style Plus in this rocket revision we are trying to cover the mcqs as well so that's the reason why know inquest from inquest book we are going to solve the mcqs because that's what I have F like uh lot of students are good at descriptive questions but when it comes to mcqs they are not able to apply so due to that reason let's okay see what mcqs are like how the McQ questions are that also I'm going to incorporate in this batch is that clear then the flow will be like today we will be starting with Customs so why Customs sir because generally that will come at the end as it comes at the end we will ignore it so therefore that's why I want to start the revision first with respect to customs and so today I'm de in for customs and tomorrow day after tomorrow and thereafter it will be for GST and the weightage of Customs will be for 20 marks you all know that in the 20 marks so you will be having six marks as McQ either one Mark McQ or two marks McQ six marks so there won't be case scenario mcqs on Customs so Customs mcqs are like to the point like question options you need to able to arrive at the answer and sometimes two marks mcqs or one Mark mcqs will be there but last time it was two marks mcqs and three mcqs will be there 3 into two six marks and there after first question there won't be anything on Customs because question number one which is a compulsory question is completely on GST only which is a integrated uh question that covers lot of aspects and then we have question number two to question number six in that question number two to question number six part C that is uh 2 c 3 C 4 C is actually Customs portion in that four Mars only so which means that you have to write any four questions out of five questions so question number two to question number six and in these four questions four into four 16 marks plus there so we will be having some uh you know four marks or six marks like that so that is about the weightage of customs and FTP off late what has happened FTP weightage is actually now negligible so reason being entire customs and FTP they are asking for 20 marks due to that reason so literally it is negligible only so due to that reason even if you skip FTP it is okay now but up to last attempt so like old syllabus skipping as FTP is not at all advisable thing but now it's okay fine because anyhow FTP related question they will be given question number six question number six I know that majority of you will not be interested to attempt question number six because question number six is a theory question purely a theory question unless otherwise the question number two to question number five is so difficult the Practical questions are so difficult then only you will be attempting the theory question and my advice also don't attempt Theory question because based on whatever papers that I have seen I know this RTI papers and all evaluated answer sheets so I have not seen full marks given for this question number six that is Theory question how much ever the student is writing but they are not giving full marks for that so due to that reason you have to write between two to five if say in this 2 to five the questions are so difficult like one question is so difficult you don't know that concept Etc then you will be touching question number six okay so therefore FTP rather than ignoring fully so we should not ignore the chapter rather than ignoring fully we will make a selective approach like all important areas in FTP we will see so that what will happen in exam suppose if you are attending that question number six so that you will be able to attempt that for that reason we will prepare okay then coming back to the discussion so I told you that we will be starting with customs and uh student were asking sir will this revision lecture be there in YouTube it will be there 2020 onwards it is there only so I have not removed anyhow YouTube free server only now so I have just skipped and uh we have not removed it it will be there and our team will be adding the thumbnail so afterwards so that if you want to read or revise any particular chapter also you'll be able to go and you can do that so please look into that it book page number 183 segment 23 taxable event under Customs yes so in this you can see there first we are talking about the Customs act so when it comes to customs you need to remember two acts here Customs act 1962 and Customs Tariff Act 1975 these are the two acts and section numbers you make an effort to remember at least few section numbers so the section number will be of mostly Customs act 1962 unless it is related to types of customs duty for types of customs duty only the section number will be Customs Tariff Act 1975 whereas in all other chapters in customs it will be Customs act 1962 so first we are starting with the levy that is basis of charge section 12 which says that there will be customs duty four conditions are satisfied what are the four conditions first there must be goods and customs duty is not on Services there must be goods and that Goods must be imported or exported but such Goods must be what type of goods dyable Goods what are dyable Goods means dyable Goods means which are covered under the Customs Tariff Act 1975 is called as dyable Goods again I'm repeating so we have Customs act 1962 and Customs Tariff Act 1975 these are the two acts that we have so first we are talking about the levy section 12 which says that four condition should be satisfied all the four condition should be satisfied then only there will be Levy of customs duty so what are the four condition there must be goods and that Goods must be dyable Goods what are dyable Goods those which are covered under the Customs tari act 1975 so we have some list of goods on which customs duty rates and all is mentioned so those goods are called as dyable goods and that should be imported or exported what is the meaning of import of goods bringing goods from outside India to India is known as import of goods taking goods from India to outside India is known as export of goods this is the definition which is common between GST as well as customs so import of goods and export of goods definition is same between GST and Customs import of goods means bringing from outside India to India and export of goods means taking goods from India to outside India is foreign exchange a relevant criteria to call the transaction as export of goods no for export of service only foreign exchange is a relevant criteria for export of goods foreign exchange is not at all a relevant criteria to be called as export of goods so once you are taking goods from India to outside India it will be called as ort of goods however if you are claiming any incentives let it be under FTP or Customs or under GST if you are claiming any incentives so that particular incentives if you have claimed you need to ensure that you are realizing the foreign exchange process within the time limit specified under femma so what is the time limit specified under femma 9 months from the date of export you need to realize the procedes so that is a condition given under femma what will happen within 9 months if I'm not realizing the proed all these I'm talking for export of services or export of goods I'm talking for export of goods so why am I not talking for export of services because in case of export of services realization of Foreign Exchange is inbuilt into the definition itself so which means that only when we realize the consideration in foreign exchange it will be called as export of services the transaction will be treated as export of services whereas in case of export of goods they did not keep realization is convertible foreign exchange as a condition to call the transaction as export of goods if you taking goods from India to outside India it will automatically become export of goods but there is a condition which says that if you have claimed any export incentives ensure that you are realizing the proceeds within the time limit and FEA which is 9 months if you are not realizing any benefit which you have already claimed will be recovered from you along with interest and penality and this is actually called as erronous refund so this erronous refund depends if you are claiming the incentive under Customs it is aonor refund under Customs if you're claiming the incentive under GST it is called Aon refund under GST so both the laws has the recovery mechanism and they will be recovering it from you and thereafter RBA has given some time limit what is the time limit given by RBI 6 months is the further extended time limit given by RBI so you have to remember two time limits so what is the time limits 9 months under femma and 6 months under RBI now so coming back to this is realization of convertible foreign exchange a condition to be called for the purpose of export of goods no so that is not at all a condition but that condition is dependent upon the incentives if you are claiming so that's why it is not there in the definition per se so imported or exported and such Goods should be imported where imported into India or exported from India so what is the meaning of India for the purpose of GST GST for the purpose of GST India is up to 200 nautical miles from the Baseline but for the purpose of Customs India is only up to 12 nautical miles from the Baseline so there is a difference between the meaning of India under GST and Customs so therefore you can see the definition below so meaning of India India means only territorial Waters of India so which means it goes up to 12 nautical miles from the baseland that is called as territorial Waters and will the subsoil as well as air also covered in case of territorial Waters yes so both the subsoil as well as the air space both will be called as territorial Waters and there is some more Waters called as exclusive economic zone what is exclusive economic zone up to 200 nautical miles from the Baseline then what is the purpose of this exclusive economic zone so mainly for the purpose of empowering the Customs officer but the meaning of India as per Customs Act is only 12 nautical miles but from 12 nautical miles to 200 nautical miles so the difference 200- 12 that is 188 that know nautical miles Customs officer will have power in order to confiscate a vessel or in order to arrest a person Etc and all and Beyond 200 nautical miles is known as high or international waters so that is about this now so therefore such imported goods should be into India or export must be from India then next point you need to know is that is government also a person yes government is a person both under GST as well as Customs so in indirect taxes government is a person so government is also required to pay GST government is also required to pay customs duty on the goods imported by them or exported by them government Goods shall be treated on par with non-government Goods Goods for the purpose of Levy of customs duty and next here there must be Goods is the first condition so what is the meaning of goods generally Goods means what any kind of movable property so here also any kind of movable property is only coming under Goods but specifically they have given few things as Goods so General meaning Goods means any kind of mobile property but Goods means what here specifically given vessel vehicle and aircraft so that aircraft which are brought into India from outside India to India with passengers or with Goods is also called as import of goods for example there is an aircraft lansa Airlines which is bringing the passenger from outside India to India so now that aircraft is called as import into India means sir on that aircraft are we required to pay customs duty no because that aircraft is now a foreign goinging Vel or aircraft due to that reason we don't have to pay any customs duty what if that aircraft is used for the purpose of domestic transportation in India we imported aircraft and that imported aircraft we are using it for domestic Transportation should we piay custom duty on that aircraft imported into India yes suppose if you are if the aircraft is coming to India and again taking the passengers outside India we don't have to pay any customs duty on that aircraft or vessel or vehicle but if that vessel vehicle or aircraft is brought into India and thereafter further used for domestic Transportation on that vehicle or vessel or aircraft we need to pay customs duty as if this is Goods imported into India then stores refers to passengers like baggage refers to passengers luggage so baggage is also treated as Goods like passengers who are coming from outside India to India can bring some Goods along with their bag and those goods which are contained in that bag is called as baggage and on that also customs duty will be payable and the rate of custom duty in that case is 38.5% is a customs duty that is payable on that so that is also Goods for the purpose of Customs whereas stores refers to Goods which are present in the vessel or aircraft whether or not for immediate consumption so what will come under stores the food items the water the fuel the spare parts or any other engine Etc related items all these including the life saving equipments life saving jackets all those things will be called as stores which are for consumption during the conveyance is called as stores so as stores also some Goods can enter into India for example an aircraft which is coming from outside India to India there is some leftover fuel in that aircraft that leftover fuel in that aircraft is called as import of fuel so there is an aircraft which is coming from outside India to India there will be some ATF which is left over in that aircraft now that left over air uh fuel which is there in the aircraft is called as fuel imported into India and we need to pay customers Duty on that fuel same way some Goods which are contained in that aircraft as stores which are coming into India we need to pay customs duty on those stores which are present in that aircraft as if these are imported into India however we have some relaxation that relaxations we will be studying in stores chapter but these are called as Goods only and next currency and negotiable instruments related to currency and negotiable instruments one important point we are connecting it to GST what is that this currency and negotiable instruments are not treated as Goods under GST not treated as Goods under GST so why it is not rate as Goods under GST because Goods definition under GST excludes money and securities so as currency is money it will not be treated as Goods which means that under GST but it is treated as Goods under customer which means that on import of currency are we required to pay customs duty yes we are required to pay customs duty so whenever we are required to pay customs duty we will be paying so basic customs duty then social welfare surcharge and igst these are the normal customs duties that we will be paying on import so basic customs duty is payable on currency social welfare Sear charge is also payable on currency but igst will not be payable on currency because currency is not treated as Goods under GST so then next one any other kind of movable property that is the meaning of goods then next so Goods definition will not be tested in exam but somewhere in the question they will be giving So based on application or McQ so that's where it will be connected stores already I told you means goods for use in the Velar aircraft and includes what fuel spare parts or any other articles or equipment whether or not for immediate fitting and import already we discussed what is the meaning of import bringing goods from outside India to India export means what taking goods from India to outside India and India definition already we have seen what is customs area Customs area means in the port or airport so whatever is the area which is under the control of the Customs department is known as Customs area so area under customs and includes any area in which import Goods or export goods are ordinarily kept so unloaded goods and all in is kept in one area now so that area is also called as Customs area and those unloaded goods are kept under whose control there is a person called as custodian so imported goods are kept under the control of custodian until the time the goods are cleared from the port or airport the goods will be under the control of custodian during that stage if the goods are lost then who will be required to pay the customs duty custom custodian is required to pay customs duty and for the Importer we call it as pil forage and importer is not required to pay any customs duty on the pilford goods which are lost when it was under the custody of the custodian then next dyable Goods means Goods which are chargeable to duty I told you already so how do we know whether the goods are chargeable to Duty or not we need to refer to the Customs Tariff Act there we will be able to identify on which Duty has not been paid so once you pay it will be as Duty paid Goods so far you have not paid that's why it is called as Duty goods and once paid so once paid it will be called as once paid it is what goods Duty paid Goods Duty paid Goods right now it is dyable Goods then Indian Customs Waters you tell me Customs act extends up to how many nautical miles 12 nautical miles or 200 nautical miles 200 nautical miles the meaning of India is only 12 nautical miles but I told you the powers of the officers will go up to 200 nautical miles that's the reason why Indian Customs Waters is 12 nautical miles or 200 nautical miles 200 nautical miles so Indian Customs Waters is up to 200 nautical miles from the Baseline and what is the meaning of export goods export goods means which are to be taken exported Goods means already taken English just English only okay export goods means to be taken export orted Goods means which is already taken out of India and who will be called as exporter the owner who is manufacturing the goods and exporting the goods is called as exporter suppose if I am manufacturing the goods and you are exporting the goods so you will be holding yourself as a exporter so you are also exporter and I am the supporting manufacturer beneficial owner actually I am the owner of that Goods but I not exporting I appointed you as the merchant exporter or third party exporter what you will do is is that you will be exporting on behalf of me so you are also called as exporter I am also called as exporter if I manufacture the goods and I am only exporting so I'm the owner of the goods so that three words owner beneficial owner or person holding himself to be exporter then beneficial owner means who on behalf of whom you are exporting is known as beneficial owner that's what I told you I'm the owner of the goods but I am not exporting on behalf of me you are exporting so I'll be called as a beneficial own a person on whose behalf the goods are being imported or exported or who exercise effective control over the goods being imported or exported so because if I am the owner of the goods I will only have control over that Goods now then I am just appointing you as a person to export why can't I do because I don't have the license generally there are some codes called as restricted Goods under foreign trade policy those restricted Goods requires authorization under foreign trade policy that authorization will be given to a person and that person only can make a export I don't have the authorization you have the authorization authorization is like a license or permission who will be giving that authorization directorate general of foreign trade under foreign trade policy they will be giving that license to you and I don't have the license you have the license so therefore you will be exporting but I'm the owner of the goods so that's why it will differ okay next imported goods already we know Goods which are brought into India already and importer same way how exporter is owner beneficial owner a person holding himself to be importer so for example I the owner of the goods and I am only importing I will be called as owner importer whereas I am the owner of the goods but I'm not able to import because I don't know the custom formalities or I don't have the license to import so I'm appointing you as the person to import on my behalf so I am the beneficial owner and you are holding yourself to be importer the next baggage already we know so it refers to luggage But it includes unaccompanied baggage also unaccompanied means which is not accompanying the passenger means it comes either before the passengers arrival or after the passengers arrival then it will be called as unaccompanied baggage unaccompanied baggage is also coming under baggage definition but baggage definition does not include motor vehicle no idiot will now bring motor vehicle as a part of baggage and all so once upon a time when people used to travel in ships and all they used to bring but now no one is bringing they will bring it like a cargo only then Coastal Goods Coastal Goods means what which is referring to the goods which are taken from a port in India to another port in India means it is not from India to outside India or outside India to India from one port in India to another port in India then it will be called as Coastal Goods means Goods which are transported in coastal Waters is known as Coastal Goods what is Coastal Waters means the moment you see Coastal Waters it is refers to it refers to Sea not land Waters Inland Waters so Inland Waters means specifically they will call it as Inland Waters but Coastal Waters means it refers to Sea wte okay mainly this will be useful for GST next foring goinging Velar aircraft what is a foring goinging Velar aircraft name itself it says any Velar aircraft which is taking Goods or people from where to where India to outside India that aircraft or Vel is known as a foreign goinging Velar aircraft simple definition now so any Velar aircraft for the time being engaged in Carriage of goods or passengers between any port or airport in India to any port or airport outside India whether touching an intermediate port or airport or not is called as foreign goinging Velar aircraft that is simple but we have some more aircrafts or vessels which will be treated as foreign going Velar aircraft that you need to remember so any Navy vessel of foreign government taking part in any navy exercises so sometimes the Indian Navy will be conducting lot of naal exercises they will be inviting so various countries to come and participate in the Navy exercise so they will be bringing their Navy vessels so that will also be coming under foreign goinging Vel it's is not carrying any Goods or people but it is coming for participating in the Navy excise that's why it is a foreign goinging vessel or aircraft but it do not belong to Indian government it belongs to foreign government any vessel engaged in fishing or other operations outside the territorial Waters of India because I Told You So India means what 12 nautical miles territorial waterers so once the vessel crosses the territorial Waters it is called as a foreign goinging Velar aircraft and it is going for fishing operations it is not carrying any Goods or people even then it is foreign goinging Velar aircraft any Velar aircraft Pro proceeding to a place outside India for any purpose whatsoever so any purpose whatsoever means if it is carrying people or Goods that will be anyhow coming under foreign goinging Velar aircraft sometimes what will happen say we will be taking one flight one rafale flight like that we will take to catch one Pakistani terrorist so we will take the flight outside India catch the Pakistani terrorist and we will be bringing correct or not so our hero will be doing so that will be also coming under foreign goinging Velar aircraft you understood so they are not carrying any people or Goods but they are going to catch a terrorist over there so that is also foreign goinging Velar aircraft and next one so whenever the goods are imported what are the various options available to the Importer as soon as the goods are imported into India that imported goods into India will be unloaded in the Customs port or airport and the Importer is having two options option number one either that Goods will be cleared for home consumption or the goods Goods will be deposited in the warehouse without payment of customs duty and thereafter from the warehouse on payment of customs duty the goods will be cleared from the warehouse okay see this is option number one clearance for home consumption with payment of Duty or without payment of Duty with payment of Duty but we need to file one bill of Entry what is the name of the Bill of Entry that we need to file bill of entry for home consumption option number two option number two what we will do we will deposit the goods in the Customs Warehouse with payment of Duty or without payment of Duty without payment of Duty but for depositing the goods in the warehouse without payment of Duty we need to file one bill of Entry what is that bill of Entry bill of entry for warehousing or in bond bill of Entry or in bond bill of Entry anyway you can call it as so Bill of entry for warehousing or also known as in bond bill of Entry or also known as into Bond bill of entry and again for taking the goods from the warehouse whether we need to pay customs duty or no need to pay customs duty we need to pay customs duty at that time what is the Bill of Entry called as X Bond bill of entry for home consumption and we need to pay customs duty at that particular point of time that is this and this Warehouse is it a warehouse owned by the Customs Department no we don't have any warehouse which is owned by the Customs Department warehouses are licensed by the Customs means any person can own a warehouse for which they need to obtain a license then even importer can have his own Warehouse yes importer can convert his own Warehouse into a custom Warehouse thereby imported goods will be kept in his Warehouse without payment of custom duty only when he clears the goods from his warehouse for manufacturer he will be paying customs duties so he can defer the customs duty liability and without filing bill of Entry can the goods be cleared either for home consumption or veros impossible bill of Entry is a document that must be filed who will be filing this bill of Entry importer importer will be filing or any person authorized by importer and remember always the one who is filing bill of Entry will be called as a importer remember this the one who is filing bill of Entry will be called as importer for the purpose of Customs so that's where I told you sometimes we authorize an another person to file the bill of Entry so now automatically he will become the Importer and we will become the beneficial owner of that Goods we will not be called as importer even sometimes in case of sale on highes what will happen I'm the original importer I will transfer the documents of title to the subsequent person that subsequent person will go to the customs and he will make the clearance I transfer the documents which means I sold the documents of title what is the documents of title airway bill or Bill of leading I will be transferring it to him so he will go and do the clearan so he is required to pay customs duty that's where in GST we discussed that whatever money that I receive by way of transferring the documents of title it is excluded from Supply because anyhow that the subsequent buyer will be filing the bill of entry and he will be regarded as the Importer and he need to pay the custom duty are you understanding this then next one so see this without filing bill of Entry the unloaded Goods cannot be cleared for home consumption or for warehousing and goods can be cleared to Warehouse without payment p m of Duty but thereafter for clearance to home consumption from Vos customs duty is payable we know that bill of Entry can be filed before arrival or after arrival also but if you file the bill of Entry after arrival you need to pay the late fee because what is the due date of filing bill of Entry before the date of arrival what if before the date of arrival is a Sunday or any public holiday even then we need to file the bill of Entry so because there is no working day concept for filing bill of Entry so today if the vessel or aircraft or vehicle has arrived I need to file the bill of Entry by yesterday midnight I should have filed the bill of Entry otherwise I need to pay a late fee what is the late fee that I need to pay for delay in filing bill of Entry 5,000 rupees for everyday delay and in case of the delay is up to 3 days and if the delay is beyond 3 days the late fee will be 10,000 rupees per day so what is the late fee for delay in filing bill of Entry the late fee is 5,000 rupees per day 5,000 rupees per day if delay is how many days if delay is up to 3 days is up to 3 days suppose if the delay is beyond 3 days then 10,000 rupees per day if delay is beyond 3 days if delay is beyond 3 days we need to pay 10,000 rupees per day for example if the delay somewhere like 8 days so for 8 days how much is the late fee that we need to pay so don't take 8 into 10,000 first 3 days it will be like a slab only we need to create so first 3 days it will be 5,000 rupees so 5 into 3 15,000 and thereafter 5 days so 5 into 10,000 so that will be 50,000 50,000 plus 15,000 that is 65,000 rupees will be taken as the late fee but what is the maximum do we have any maximum late fee yes so subject to maximum subject to maximum maimum how much 100% of customs duty payable 100% of customs duty payable is the maximum late for example my customs duty payment itself is 40,000 in our example 8 Days delay 8 Days delay means 65,000 but the custom duty payable itself is 40,000 rupees so how much is the maximum late fee that we need to pay 40,000 is the maximum late fee that we need to pay that is with respect to this late fee point then next one you see as clearance from Vos is the taxable event sometimes it so happens that so one second here some some issue with this app I'll open it in other place yes see this as clearance from Vos is the taxable event if the goods are Exempted at the time of import so what will happen at the time I am importing I have to pay some customs duty say 10% customers Duty I kept the goods in the warehouse after I keeping after I kept the goods in the warehouse so there is a budget notification which says that these Goods which are imported is Exempted from payment of custom duty which means at the time when I clear it from the warehouse should I pay the custom duty or no need to pay the customs duty no need to pay customs duty because what is a taxable event at is when will I pay customs duty at the time of deposit at the time of clearance at the time of clearance so at the time of clearance the goods are Exempted so we don't have to pay the customs duty but contrary is also there at the time of import I kept the goods in the warehouse and that time it was Exempted and after depositing the goods in the warehouse I cleared it from the warehouse at that time so it became dyable should I pay the custom duty yes but actually it is a hypothal illogical situation because when the imported goods are Exempted why the hell a person will keep the goods in the warehouse mainly the motive behind keeping the goods in the is to defer the customs duty payable at the time of import itself if the goods are Exempted directly he will clear but suppose if it is like a lower rate and higher rate that could be possible so at the time of import he kept the goods in the warehouse and after import the rate was 10% and thereafter at the time of clearance the rate went to 15% so should he pay 15% or he need to pay 10% he need to pay 15% because the taxable event or the event on which we need to pay G uh customs duty is depend dependent upon the clearance not at the time of deposit that is this point and Customs Warehouse already I told you is it a warehouse owned by the Customs department or licensed by Customs Department licensed by Customs Department it is not owned by Customs Department licensed and suppose if an importer has obtained a license for his own Warehouse he can import the goods he can kept the goods in his he can keep the goods in his Warehouse without payment of custom duty again he can pay customs duty as and when the goods are cleared from the warehous because only clearance from wouse is the taxable event and you need to know certain important documents involved that is in case of import what will be treated uh like what is the document to be filed by the Importer always it is the same document what is the name of the document bill of Entry so this is a document to be filed by importer Let It Be import by vessel or import by aircraft or import by vehicle the name of the document is Bill of Entry suppose if it is person in charge what will be the name of the document to be filed by person in charge in case of V it is import manifest in case of aircraft it is arrival manifest in case of vehicle it will be called as import report then in case of export what is a document to be filed by the exporter with the Customs officer for the purpose of export it is shipping bill in case of vessel and aircraft whereas in case of vehicle the name of the document will be bill of export whereas what is the document to be filed by the person in charge in case of uh import by Vel that is export by Vel Etc in case of Vel import import manifest export it will be export manifest similar and aircraft arrival manifest departure manifest you usually easily you can remember usually in the context of aircraft we use the words arrival and departure so therefore arrival manifest arrival means what it is coming so therefore on import arrival manifest and departure means what it is leaving so therefore the document name will be departure manifest and in case of vehicle it will be import report export report and who is person in charge of the conveyance so in case of vessel Master of the vessel in case of aircraft it will be pilot and in case of vehicle either conductor or guard or any other person only after filing this import manifest Grant of Entry inwards is given for the vessel to enter into India that is when as soon as the vessel comes into the India so before the vessel coming into India they need to get a permission so that permission is known as Grant of Entry inwards when the grant of Entry inwards will be given and who will be giving Grant of Entry Inver Customs officer will grant of Entry words when it will be given only when the person in charge files the import manifest or you know arrival manifest or import report but actually the concept of Grant of Entry inwards is not applicable for aircraft and vehicle because practically you think until the time this person is giving Grant of Entry inwards where we can keep the aircraft we cannot hang it somewhere over there in case of vessel we can anchor it somewhere outer space but in case of aircraft literally it is not possible that's why for Vel only they are speaking about the grant of if you read that wording I did not use the word aircraft there I use the word only vessel read that point once again only after filing import manifest I did not use the word arrival manifest or import report only after filing import manifest Grant of Entry Inver is given for the Vel to enter into India means the concept of Grant of Entry inwards is applicable or not applicable to aircraft and vehicle not applicable to aircraft and vehicle but they need to file the arrival manifestor or import report for what purpose just for the sake of unloading the goods not for entering they can enter but they need to file it for the purpose of unloading the goods which are brought into India along with Bill of Entry so importer who will be filing bill of Entry importer will be filing bill of Entry what do Bill of Entry contains the details of the goods which are imported how much customs duty is payable from where it is imported what is the value of the goods everything will be there in the Bill of Entry along with Bill of Entry he need to prove that he is the owner of the goods how he will prove that he's the owner of the goods there is something called as documents of tit what is the document of title to the goods called as in case of import by Airways that Airlines will be giving a document called as airway bill in case of waterways that shipping company will be giving a document called as Bill of leading and in case of vehicle they will be giving either lry receipt or Railway receipt apart from that they should also prove that this is the value of the goods how will they prove that this is the value of the goods that exporter would have given them the one invoice now that invoice also they need to produce so what are the three documents to be filed by the Importer at the time of import come on Bill of Entry document of title that is airable Bill of leading L receipt rway receipt and third one will be invoice so commercial invoice which is raised to him by the supplier outside India these are the documents to be filed by importer next look into the taxable event and relevant date for determination of rate of Duty so as per section 12 what is the taxable event in case of import as and when you clear the goods for home consumption so which means as soon as the goods enter into the territorial Waters it is not import as and when the goods are unloaded in the India it is not import only when the goods are crossing the Customs barrier it is known as import there are two Landmark judgments that you need to remember that is Kieran spinning Mills case and garden silk Mills case these two are Supreme Court judgments so whenever you are writing anywhere in the answer sheet about import ensure that you are quoting these two case laws so you create the space you understood so space will not be there you should create that space for the purpose of writing you understood what I'm telling so you are writing somewhere about import you write that these two cases because see we have to uh ensure that we convince or we impress the valuer so it is like so whenever you are talking to one girl or one boy so you speak lot of nonsense cringe and all you do now like uh you know many things you will tell so to impress the other person so think think on the same lines that value also you need to impress and because here if you are impressing not impressing it's okay if not X it will be y if not y it will be said no issue but in exam and all you cannot take that chance somehow you have to impress them so due to that reason you create the space wherever possible you show your talent like how people will not have any stuff but they will post in LinkedIn that they have achieved many things you you understood so like that you have to create that space you understood what I'm telling so therefore you have to write this what is the meaning of UT come on crossing the Customs barrier what is crossing the Customs barrier barrier means Customs control so what is customs control when the goods are deposited in Warehouse so is it still under the Customs control yes but sir you said Customs is not controlling the warehouse I never said Customs is not controlling the warehouse what I said is Warehouse is not owned by the Customs but warehouses which are licensed by Customs are still under the control of Customs so that's the reason why only when the goods cross the warehouse Customs Warehouse we need to pay the custom duty so that is only the taxable event so Kiran spinning Mills case and garden silk Mills case then what is the taxable event in case of export so what is India good should cross India then only it will be called as export so what is India for the purpose of Customs 12 nautical mil so that is territorial Waters so only when Goods cross the territorial Waters it is called as export and there are two cases again landmar cases that you need to remember that is remember rajendra dying and printing Mills case what is this rajendra dying and printing Mills case there is a ship which has sunk within the territorial Waters as the ship has sunk within the territorial Waters the goods are not said to be exported remember so ship sinking rajendra dying you understood so ship sinking rajendra dying rajendra dying and printing mils case and then Sun exports case Sun exports case says that goods are crossing the territorial Waters and it returns due to engine trouble so in that case whether the goods are said to be exported yes as it crossed the territorial Waters even though it is coming back due to engine trouble still the goods are treated as exported so therefore you remember sun rises in the East sets in the west going and coming back you understood or not so Sun exports case going and coming okay so these two cases you remember that is rajendra dying and printing Mills case and Sun exports case these are Supreme Court cases and this also you remember Kiran is playing in the garden and only when he come out of the garden it is import you understood or not so therefore Garden here refers to what Customs barrier and therefore Kieran spinning Mill case and garden silk Mill case so only when the goods cross the Customs barrier it is treated as import then this is about section 12 section 15 and section 16 what is the relevant date for determination of rate of Duty so because rate of Duty will be different on different days then what should be taken this is like time of Supply under Customs so as per section 15 in case of option one what is option one imported goods cleared for home consumption at which time point you need to pay customs duty at the time when you file the bill of Entry correct because in option one there is no deferment of custom you have to to pay the customs duty so at the time of filing bill of Entry you need to pay but sometimes the grant of entry in wordss may be before so then what we should do they are telling Grant of Entry inwards or Bill of entry date whichever is later not earlier whichever is later so it is not whichever is earlier so keep in mind so wherever we have whichever is later Provisions that alone you need to highlight and keep okay so therefore this is the place where we have come across whichever is later it's not whichever is earlier and usually which will be later bill of entry date or Grant of entry in date Grant of entry in date is only later because what happens the due date of filing bill of Entry is what before the date of arrival and only when the grant of entry in is given that will come so means that comes before that itself we need to file the bill of Entry so usually 99% of the cases the bill of Entry will be before and thereafter only Grant of Entry inwards will come so whichever is later will be Grant of Entry inwards it so happens that in bill of Entry we have filed the bill of entry with 10% customs duty but on the rate of Grant of Entry inwards it is 12% so should we pay 10% or 12% 12% but already we filed the bill of entry with 10% customs duty so what should we do we need to do the amendment to the bill of Entry no need to file the new bill of Entry file the amendment to the bill of entry for correcting the rate of customs duty because the prevailing rate now will be 12% that only should be taken suppose if you are filing the bill of Entry late so already Grant of entry in actually you should file the bill of Entry before the date of arrival but you file the bill of Entry later so then whichever is later is what bill of entry date so now you don't have to do Amendment because you will file the bill of entry with the new rate whatever is applicable only so there is no need of amendment but there will be something called as late fee why the late fee will arise because you have not filed the bill of Entry before the date of arrival that late fee will be payable so either there will be Amendment to the bill of Entry or there will be late fee so whenever there is a change in rate so you keep that in mind when aircraft or vehicle comes whether the concept of Grant of entry in is applicable to aircraft and vehicle no so then the words bill of Entry or Grant of Entry inwards whichever is later the grant of Entry iners will not be there so then we need to replace that with what word arrival because for aircraft and vehicle there is no concept of Grant of Entry Inver so see this data presentation of Bill of Entry or Grant of Entry inwards whichever is later in case of aircraft and vehicle presentation of Bill of Entry or date of arrival whichever is later and what is the relevant date for determination of exchange rate for exchange rate we need to take the date of presentation of Bill of Entry so whenever you're filing bill of entry on the date whatever is the rate of Duty that only will be taken that only that is exchange rate should be taken but that exchange rate should be given by cbic or market rate or which rate should be taken cbic rate should be taken so exchange rate as determined by cbac should be considered and here there's no confusion because we will file only one bill of Entry but go to option two in case of option two what should be taken as relevant date for determination of rate of Duty so I told you we need to pay customs duty in case of Warehouse Goods at which point of time at the time of clearance from Warehouse so at the time of clearance from Warehouse which bill of Entry we will be filing X Bond bill of Entry so X Bond bill of entry date only should be taken as relevant date for rate of Duty in case of warehoused goods whereas what should be taken as relevant date for exchange rate for exchange rate we need to take as the inbound bill of Entry not X Bond bill of Entry keep that in mind why logic you remember at the time when you keep the goods in the warehouse you need to compute the customs duty payable for executing the bond because it is called as in bond bill of Entry if you need to compute the custom duty or if you need to know the bond value Bond value will be Indian rupees means you need to know the exchange rate at the time of depositing the goods in the warehouse but the rate of Duty is prevalent at the time of clearance of goods from the warehouse so that's why XB bill of Entry so remember for exchange rate it will be inbound bill of entry for rate of Duty it will be X Bond bill of Entry that is this then in case of export so we need to bring section 16 so for Relevant date for determination of rate of Duty as per section 16 let export order so whenever we are filing the let export order so we will not file actual export order we will be filing that is exporter will be filing shipping Bill or Bill of export then the Customs officer will verify the shipping Bill or Bill of export and he will pass a let export order on the date whatever is a rate of Duty that should be taken then for exchange rate what is the parallel document for Bill of entry in case of import it is Bill of entry in case of export what is an document name shipping bill so therefore we need to take the shipping Bill or Bill of export date for the purpose of determining the exchange rate okay and in case of improper import and improper export this discussion will not be applicable improper import or improper export means what smuggling so in that case we will not file bill of Entry there is no Grant of Entry inverts Etc and all so as and when the Customs Department catches at the time the customs duty is payable the date on which customs duty is payable that is a relevant date for determination of rate of Duty so the date of payment of Duty so these are the points mainly so two types of questions we will be getting on this one is related to this uh practical question wherein they will give different dates in the different dates different rates will be there so we need to take the appropriate date for the purpose of determination of exchange rate as well as rate of Duty sometimes in mcqs also they can coin some questions based on this then we are moving on to valuation under Customs so look into valuation under Customs page 197 valuation under Customs so we understood so far three sections that is section 12 which talks about the levy section 15 which talks about relevant date for determination of rate of Duty and section 16 talks about relevant date for determination of rate of Duty 15 is in case of import and 16 is in case of export so there are two queries sir if an aircraft is imported into India for domestic use I should pay customs duty on aircraft separately and store separately of course so on aircraft also we need to pay customs duty and the stores inside that aircraft also I need to pay customs duty for Grant of Entry of vessel should it be obtained before entering 12 nautical miles or 200 nautical miles 12 nautical miles so it's not 200 nautical miles 12 nautical miles they need to get the grant of Entry inwards if they are not obtaining Grant of Entry inwards Beyond 12 nautical mes they need to Anchor the ship so and they need to keep that ship there till the time they get the grant of Entry Inver so many cases it so happens that the air the ship will be anchored so in Marina Beach I have seen any number of times wherein the ship will be anchored and the moment ship ship enters into Port we will not be able to see because Chennai Port is such that it is actually concealed from the beach and if the ship enters into the port we will not be able to see but if you are able to see the ship means it is parked outside that is anchored outside the territorial Waters and there there may not be birthing accommodation available due to that reason it will be anchored outside okay then so then how they will file the import manifestor to get Grant of Entry inwards will the captain swim and come and he will be able to get the grant of ENT no so we have have electronic data interchange that is customs Gateway is there IC gate like how GST common portal Customs also is having a common portal called as IC gate Indian Customs electronic Gateway IC gate I for Indian C for Customs e for electronic gate gate is Gateway so that is the Customs common portal okay so look into this valuation under Customs so valuation under customs is given under section 14 of Customs act 1962 still we are in customs act 1962 only read with rules that is customs valuation rules 2007 so what will be taken as the ass value in case of import in case of import we need to take CF price and in case of export we need to take fob price what is the difference between CIF price and fob price in total we have four prices in customs so one is CIF price so which is the price prevailing at the time and place of importation is known as CF price and fob price is known as price prevailing at the time and place of exportation there are two more prices called as X Factory price and free alongside price so what is that we need to remember so somewhere you make note of this equation so how to arrive at this prices okay first we need to take xfactory price what is X Factory price the price prevailing at the at the factory gate of the exporter that is X Factory price to this x Factory price if you add transportation to this x Factory price so this is xfactory price here and this x Factory price means price at exporter Factory price at exporters factory is known as xfactory price to this xfactory price we need to add fright from where to where fright from Factory to load port or airport load port or airport that we need to add and then we need to add even the loading charges but once you add this fright it is known as free alongside free alongside f a s price free alongside price it will be called as free alongside price so X Factory price is price at exporters factory fright from Factory to load airport or Port if you add it will be called as free alongside price FAS price so in exam they can give xfactory price or they can give free alongside price also be careful because already they tested fob price AF so now if they want to confuse you they can give the X Factory as well as free alongside to this free alongside price if you are adding loading charges loading charges in port or airport who port or airport exporter portter airport there only we do loading so once you add the loading charges it is ready for shipment or it is ready for transportation so that will be called as free on board free on board f price so basically this fob price means what in the port or airport the goods are ready for shipment that is a meaning the price prevailing at the exporter port or airport is known as fob price so then to this fob price we need to add insurance so this insurance is for which purpose insurance from where to where outside India to India Insurance charges from outside India to India from outside India to India and also one more we need to add what is that fright fright fright from where to where fright from outside India fright from outside India to India so when we are adding this will be called as CIF price that is FOB is cost fob is cost and I is Insurance f is Fright okay that is what C so C for cost what is cost fob is the cost plus I plus f i for insurance and F for fright so that is what CF price we will be getting this CF price is also called as assessible value under Customs so this equation please keep in mind so that whichever price is given in the question accordingly you need to alter that so either we may be getting X Factory price or we may be getting so either we may get X Factory price or we may get free alongside price or we may get free free on board price or we may get CIF price so depending upon that we need to change you understood so what is xfactory price the price prevailing at the exporter Factory what is free along set price the price prevailing before loading in the port or airport and what is FOB price the price prevailing in the port or airport of the exporter after loading the goods and then CF price is the price prevailing at the importer's place that is CF price so what should be taken as aable value in case of import CF price what should be taken as ass value in case of export fob price so that is what I have given here so ass value in case of import is C price that is FOB Price Plus Insurance Plus fright should be taken but fob price PR whatever we have got is FOB price which is given in the invoice but we need to derive at the fob price as per the Customs so we need to make adjustments after making the adjustments we will get the fob price under custom there are two types of fob price fob price given that is in the invoice and fob price as per customer so what is the difference between these two sir first we will take fob price given in invoice fob price given in invoice we will be taking and to that fob price given in invoice we will be making two types of adjustments so primary adjustments primary adjustments we will be making so this primary adjustments as per rule 10 sub rule one rule 10 as per rule 10 so sub rule one of Customs valuation rules 2007 so this is the primary adjustments once you make this primary adjustments we will be getting fob price but this fob price is as per Customs or also known as revised fob price so this will be taken so this adjustments we need to make and we get the fob price as per customers also called as revised fob to this fob price we need need to make secondary adjustments secondary adjustments this secondary adjustments is as per rule 10 sub rule 2 of Customs valuation rules 2007 so that is the secondary adjustments and once you make the secondary adjustments what are the two secondary adjustments that's what insurance and fright insurance and fright so we should make the secondary adjustments so once we make this we will be getting CIF price CIF price so therefore actually from fob price to CIF price itself I just gave you little bit lengthy information that is this is actually at this stage only fob price to CF price but in that itself what we will do first we will take fob price as given in the invoice then we will make primary adjustments as per rule 10 sub rule one after making primary adjustments as per rule 10 sub rule one we get the fob price as per customs and thereafter we make the secondary adjustments that secondary adjustments as per rule 10 sub rule 2 as per rule 10 sub rule two only two adjustments are there remember rule 10 sub rule 2 10 is adjustments rule 10 is adjustments rule 10 of which rules Customs valuation rules 2007 rule 10 sub rule 2 has only two adjustments what are the two adjustments that we have fright and insurance so once we make those adjustments what we get will be the CF price is that clear now so whenever we are taking this fob price we need to take the fob price after adjustments means fob price given plus adjustments as given below so this is the fob price as per customers to that we need to add insurance and fright so insurance if ascertainable we will take actuals if not ascertainable we'll take 1.25% of fob what's the meaning of not ascertainable not ascertainable means not known to the Importer why it is not known to the Importer sometimes a container when we pay the frighter insurance that container contains the goods belonging to multiple importers so this container cost and the insurance cost that fright cost and insurance cost will be paid by the consolidation agents or Logistics operators there are many Logistics operators so these people what they do is that they will pay the fright and they will pay the insurance but in the same container they will transport Goods belonging to three or four importers so thereafter they will apportion this fright cost and insurance cost between the importers and they will give a separate bill for that so this operate Bill if I don't have from my consolidation agent or from my Logistics operators I don't know what is the insurance so in that case I will take whatever is the fob value of my goods in that container I have my goods I know what is its value so on that 1.1 125% will be taken as the insurance if not ascertainable that is this and if it is ascertainable we'll take actuals but when we are Computing 1.25% of fob so what will be taken so as fob is it the given fob or revised fob we need to take revised fob which means fob price as per Customs means after making the primary adjustments and then fright fright ascertainable or not ascertainable we need to see if it is not attainable again why not attainable same reason our consolidation agent or Logistics operators have not given the invoice to us as to how much is the proportion of the Fright that we have to pay so in that case we will take 20% of fob and suppose if it is ascertainable we'll take actuals but even if it is ascertainable if it is air FR we have restriction what we need to do we need to take actual or 20% of fob whichever is lower should be taken that is in case of air fright because in case of air fright there will be huge air fright that much air fright if it is included unnecessarily the customs duty computation value will increase and the custom duty will increase so that's why they have restricted it to 20% of fob then this fright when you are taking it shall include handling charges also what is this handling charges during the transit for from there to here some extra charges we need to pay for the purpose of handling the containers with care so because these containers contain some glass articles or electronic items Etc so these handling charges also part and parcel of right but unloading charges will not come which unloading charges unloading charges in the intermediate location will be coming in the Fright but unloading charges in the port of importation or airport of importation will not come sometimes what will happen there is a concept of uh you know like light rage and Barge in case when a ship cannot come into India or Indian Port because the depth of the ship is so big but the port don't have that depth the ship will be anchored at outer space from there to Port they will be bringing the goods in the form of boats so in boats they will be bringing as this is unloaded in the port or outside the port outside the port this unloading charges will come in the freight or will not come in the Fright will come in the freight only unloading charges in the port will not come in the Fright are you able to understand this so not at the place of import any unloading charges or any handling charges will come in Fright but not in the port of import or place of import intermediate on the Midway or end route any kind of charges is there that will be included in Fright ship demate charges there are two types of demate charges normal demate charges and Shi demate charges normal demate charges are payable by the Importer after the goods are imported concentrate because in exam they will give both these demor charges ship demor charg also sometimes will be there and normal demor charges that demor charges like that they will give they will not mention it as ship demate charges so there are two demate charges demate charges versus ship demate charges ship demate charges payable by whom person in charge for what reason because the ship is anchored in the outer space so they need to pay that ship demor charges but demor charges who will pay importer when it will be payable by importer after import when like what is the reason if the goods are not cleared within the permissible time so then they need to pay this demate charges as demate charges are payable after import will it be included in the value or not include in the value not included remember all post importation expenses will not be included in the value so deor charges will not be included in the value what about the ship demate charges will it be included in the value yes ship demate charges will be included in the value because it is payable before import or after import before import it is payable so it should be included so please try to remember with the logic Shi Dem charges are payable by the person in charge it is payable before import that's why it should be included in the value but demor charges is payable by the Importer when is it payable after import for not clearing the goods within the time so therefore that will not be included in the value are you understanding this so but I have not given here demate charges I gave ship demate charges so you keep in mind demate charges payable by demate charges payable by importer demate charges payable by importer not included in value not included in value so shall include handling charges not at the place of import ship demate charges light rage and bar charges what is this light rage and bar charges which are required for bringing the goods from where to where outside India that is uh ship to shore from ship to shore we need to pay to the boat some charges now that charges is known as light rate charges and Barge charges charges incurred for transportation of goods from ship to shore all these are part and parcel of fright so when you take this fright 20% means all these are already included in this particular fright itself then related to this there is one very very important adjustment say this so this you can make not somewhere you already have few papers now some rough sheets Etc so there you write down okay so parall you write down X Factory price this this is one question X Factory price X Factory price is somewhere $1,000 then Transportation Transportation up to exporter Port ex Factory price is $1,000 transportation of two exporters Port is $200 then loading charges loading charges in exporters Port is $100 and thereafter fright from exporters Port to India not ass attainable not ascertainable insurance insurance from exporter port to India is somewhere like $50 compute assessible value under Customs compute ass value under customs so when we have data like this what will you do first you will take X Factory price and to that X Factory price if you add these two you will be getting fob price and we don't have any adjustment so that itself is the fob price as per Customs so first we will take X Factory x factory plus fright plus loading charges plus loading charges how much that will come to ,300 so this is actually called as fob price but this fob price is under Customs okay X factory plus fright fright up to which place fright up to the port of exportation plus loading charges 1,300 fob price to this fob price we need to add fright but this fright is from where to where fright from exporter port to importer Port so fright is it attainable or not ascertainable not ass stainable so we will take 1,300 into 20% what is 1,300 into 20% so it will be $260 so we'll take $260 and insurance so what is insurance insurance will be 30 uh $50 because it's actual ascertainable so we'll take $50 so what will be the ass value 1,300 + 260 + 50 that is ,60 will be taken as the ass value you will not get one Mark also so this is wrong we should not do it this way okay we should not do it this way it is wrong so why sir because ICI has taken assumption when you are taking the Fright 20% % that 20% includes the Fright from the factory gate of the exporter so which means the X Factory price is correct the X Factory price of First is correct no doubt in that so we need to take X Factory Price Plus fright plus loading charges 1,300 that part is correct but fright 20% is also correct 20% is also correct what is 1,300 into 20% 260 that should be in the inner column minus already considered in fob how much is already considered in fob not 200 300 what is already considered in fob see when you take 20% please concentrate important assumption when you take 20% that 20% is from which place Factory gate of the exporter the moment when you take 20% it is from the factory gate of the exporter from the factory gate of exporter what is the extra cost that you have added in fob how you got fob 1,000 + 200 + 100 you got 1,300 means in that 1,300 what is the factory cost 1,000 what is the extra cost you have added from thereafter 300 which is already added in fob but what is 20% of fob only 260 minus already considered in fob 300 which means you need to reduce $40 you need to reduce $40 this you would not have done you would have seen only addition but here we have a deduction and then you need to add insurance and that insurance as actually is sutainable we will take actual that is 50 so what will be taken as the CIF price the C price will be taken as 1,300 - 40 + 50 that will be, 310 1,310 will be taken as the CIF price or accessible value sir should we do it like this only sir of course we should do it like this only you have to trust me no other go you don't have any other goer you have to trust me please trust me this is the way in which we need to arve the answer okay so what we need to do is that whenever we are taking 20% of fob so when we will take 20% of fob in two places we will take 20% of fob one is in case of air fright and what is that air fright actual or 20% of fob whichever is lower so when you take the actual you need to take from which place from the factory gate of the exporter a 20% is compared with what 20% is compared with what fright from which place Factory gate of the exporter so therefore in case of air fright we will take actual or 20% of fob actual will be from the factory gate of the exporter everything you take in actuals B 20% of fob but sir Factory gate of exporter to the placed of exporter that load port or airport we will add that in fobs it will be part of fob that's what here we have taken this 300 is part of fob definitely we need to add this as part of fob on that only we need to compute the 20% so why should we do this way this is how it is given in the law we have to follow this way only and if you follow with your logic you follow with your logic better we will meet in May 25 exam so therefore 1,300 into 20% that is 260 but in the 260 already whatever is considered in fob we should take out so remaining only should be coming and then insurance will be 50 so 1,310 will be taken as the CIF price or it will be taken as the S value is it clear now there is one question related to this in exam we will see that study material question it is not everything in study material I can discuss that much time I don't have but to the extent possible some critical questions like this we will see so this is this is a question on valuation under Customs there is one question question number 19 have a look into this in the screen product Zed was imported by Mr X by a the details of import transaction are as follows price of Zed at the exporter Factory what is the price of Zed at exporter Factory $8,500 means what is this price known as X Factory price fright from Factory of the EXP exporter to the load airport load airport that is exporter's airport that is $250 will it be added to get the fob price yes loading and handling charges at the load airport will it also be added to get the fob price yes 250 and 250 fright from loow airport to the airport of importation in India is 4,500 but we need to restrict it to 20% of fob and insurance charges actually is sutainable so we will take though the aircraft red on 22nd August the bill of entry for home consumption was presented by Mr X on 20th August the other details furnished by Mr X are 20th August 22nd August what is 20th August the date bill of entry for home consumption so arrival of the aircraft is 22nd August so which should be taken as the relevant date for determination of rate of Duty so presentation of Bill of Entry or arrival whichever is later what is the later date 22nd August on 22nd August what is the rate of custom duty 10% should be taken and exchange rate notified by cbic should be taken or RBI should be taken cbic should be taken so CB rate but prevailing on which date on the date you are filing the bill of Entry what is the date on which you are filing the bill of Entry 20th August so on 20th August what is the exchange rate that we have 70 rupees per dollar so the exchange rate 11 is 70 rupees per dollar you understood how whatever we have discussed is being applied and then for igst also just like basic customs duty only you need to take so basic Customs prevailing on which date you have taken 22nd August igst also prevailing on that date only should be taken in this case now let's proceed to the valuation first so for valuation we need exchange rate that's why I discussed this point so what is the relevant exchange rate respond 70 rupees per dollar so first we need to take uh fob price for that fob price we need to start with the xfactory so you do the calculation come on start with me along with me so price of Z at exporters factory that is xfactory price write down write down X Factory price X Factory price will be taken as $88,500 so X Factory price X Factory price X Factory price will be taken as $88,500 to this xfactory price we need to add two things what are the two things that we need to add in this question fright fright from where to where fright from Factory to load airport load airport how much is that $250 in the question and then loading charges so loading charges is $250 so if you add this $88,500 + 250 +250 $99,000 this $9,000 is what fob price and we don't have any adjustments in the question so this fob price we will take this is the f price as per customs and to this we need to add insurance insurance actual ascertainable yes should we compare with 20% of fob sorry 1.1 125% of fob no when Insurance actually is suable we will always take the actuals what is the actual Insurance charges 2,000 so we will be taking 2,000 as the insurance charges then fright how much will be taken as fright fright will be air fright no so air fright will will be actuals or 20% of fob how much you will take as actual see the question how much you will take as actuals wrong answer 4,500 if you are taking it is a wrong answer we should take 5,000 why we should take 5,000 I told you start from the factory gate of the exporter so starting from Factory gate of exporter how much is the Fright 250 so loading also part of fright yes I told you now loading handling everything will be part of freight itself so therefore 250 +$ 250 $250 + $250 + $4,500 should be taken as the actual so what is the actuals in this case 5,000 or 20% of fob so what is the fob you have got 9,000 9,000 into 20% so that will be 1,800 so whichever is whichever is lower what is whichever is lower 1,800 everything is in our column only minus less already considered in fob what is already considered in fob already considered in fob is $500 how $500 this $250 and 250 already considered so therefore how much should be coming in the outer column 1,000 $300 now this will be called as CIF price or assessible value that will be 9,000 + 2,000 + 1,300 that comes to 12,300 now to this 12,300 we need to multiply with the exchange rate so what is the relevant exchange rate relevant exchange rate is rup 70 per dollar therefore able value will be 12,000 300 into 70 that will be rupees 8 lakh 61,000 that will be taken as the ass value so 8 lakh 61,000 should be the answer correct now see this 8 lakh 61,000 you understood now will you believe in me this is study material yeah IC study material you have to okay so this is how you need to arve and this is only for CA final exams you don't follow this in reality in reality and all if you follow this so Customs department will kick on your phase itself okay because you are actually reducing the value you are not increasing the value so actually know reality is that this 1,300 will not be taken 1,800 will be taken in reality in reality 1,800 is taken so which means to the extent of $500 the value will get increased on that you need to pay customs duty this is only for for CA final exam in reality no one is following this so why ca is doing like that always they are different now okay so they are different they have to be different so that's why and basic customs duty thereafter we need to proceed to the customs duty computation so you understood up to this ass value so ass value 8ak 61,000 now how to compute the customs duty payable on this so the steps involved in computation of customs duty so we will do this continuation so that we will learn how to compute customs duty also customs duty computation will be made in three parts so part one so total nine customs duties we have total nine in that the first one is basic customs duty that basic customs duty will be at the rate of it will be given in the question itself so what is the rate at which we need to pay the custom duty always it will be given in the question we don't have to remember any rate for this purpose Pur but only thing they will give different dates and different rates from that we need to assertain how much should be taken as a rate of basic customs duty in this case 10% or 20% 10% so basic customs duty at 10% on what it will be computed on assessable value what is assessable value in this case 8ak 61,000 into 10% that will come to 86,1 100 is the basic customs duty and then social welfare surcharge but in the question we don't have social welfare surcharge always we should take social welfare surcharge on import at the rate of 10% on what basic customs duty what is the basic customs duty 86,00 so 10% will come to 8,610 that is social welfare surcharge then number three called as cvd counterveiling duty this counterveiling Duty will be at the rate that will be depending on whatever rate that is given in the question in this question we don't have cvd but sir if there is cvd it will be computed on what cvd will be computed on ass Value Plus basic customs duty plus social welfare surcharge that should be taken okay and ass value basic customs duty social welfare surcharge on what CBD is applicable right now on what goods you tell me what are the goods on which excise duty is applicable even today GST is not applicable but excise dut is applicable in the sense excise duty is applicable on domestic sales today what are the goods on which duties applicable huh alcoholic liquor alcoholic liquor for human consumption and then petroleum products and then tobac and tobacco products tobacco and tobacco products on these three only cvd will be applicable only if these three goods are there in the question then we need to take cvd but the cvd rate should be given in the question itself but only computation you remember it is on ass value basic customs duty and social welfare sub charge but in this question it is not there so we don't have to take it and once you add these three we call it as customs duties excluding additional customs duties customs duties excluding additional customs duties so that will be 86,00 + 10% that is 8,610 94 0710 and after this 94710 we need to take second part so we have three additional customs duties what are the three additional customs duties that is Step number two we have three additional customs duties so Point number four Safeguard Duty Safeguard Duty that Safeguard duty is not applicable in this question but if we have we need to take that and number five that is anti- subsidy Duty that anti- subsidy Duty also if it is there in the question we need to take otherwise not required then anti- dumping Duty these are the three additional customs duties but in this question we don't have so we don't have to take that what are the three additional customs duties here Safeguard Duty anti- subsidy Duty and anti-dumping Duty so this will be called as customs duties excluding customs duties excluding igst and SS compensation s so 94710 thereafter in the third part we are having three more so number seven igst igst is at the rate of so that will be given in the question itself what is the rate at which we need to take igst 12% or 18% 12% only because 202 August whatever is the date relevant for basic custom duty the same rate is relevant for igst also so therefore we need to take 12% because igst is also under Customs igst is not under GST law igst is under Customs so due to that reason we need to follow the basic customs duty rate whichever you are following as per section 15 the same thing should be taken that is 12% should be taken in this case so igst at the rate of 12% on what on ass value plus step two what is ass Value Plus step two that is ass value 8 lakh 61,000 plus 94710 into 12% so that will come to 808 lak 61,000 + 94710 into 12% that comes to 1 lakh 14, 68520 round of Errors lot of students are doing because because of which many marks are being deducted in exam so don't do round off error so we have to take after decimal like two digits but the last final answer you get a total custom duty that only should be rounded off to nearest one rupee not nearest 10 Rupees nearest one rupee so therefore I GST at 12% and next we have something called as GST compensations s but this GST compensations S at the rate it will be given in the question so on what on same ass Value Plus step two total but why not we are taking step one sir so step two total itself includes step one total also so we don't have to take both okay and this is not there in the question so we don't have to do that finally the last one s a special additional duty special additional duty this special additional duty will be at the rate that will be given in the question itself and it will be computed on what same ass Value Plus step two and sad is applicable on what goods so only on one product s is applicable what is that petroleum products so we have some petroleum products five petroleum products that is crude oil petrol diesel Aviation turbine Fuel and natural gas these are the five petroleum products for which sad will be applicable so what are the five petroleum products crude oil petrol highspeed diesel then Aviation turbine Fuel and natural gas in this case it is not there so we will not take that and when you add this so This total will be called as total customs duties payable total customs duty payable and you round off to nearest one rupee in this case what is that 94710 plus 1 4,685 20 that is 2 lakh 9,395 this is customs duty payable 2 lakh 9,395 you can see the answer yes 2 lakh 9,395 okay so this is how customs duty computation will be made so remember these are the nine customs duty ities that we have depending upon which customs duty is given in the question accordingly you need to insert in the respective place okay so still some trust I need to create sir the available fuel which is in the foreign goinging aircraft or vessel is not dyable right yes so I told you the fuel which is left over in the aircraft or vessel which is coming into India treated as import of fuel and we need to pay customs duty but if the same Velar aircraft is a foreign goinging Velar aircraft on the leftover fuel we don't have to pay any customs duty that's correct then sir in the SM question if actual fright in India is $100 lower of two will be actual fight 600 in this case also we have to deduct 500 already considered always we need to deduct that's what I told you while creating a question which I have given to you I gave you negative Freight usually fright will not be negative but because because of the I assumption the Fright will become negative so because of this because something which is already there in fob we need to reduce it okay so then so if the question it is not given the Fright from where to where can we deduct already considered fight from Factory gate to the load Port no so remember this assumption whatever is given whatever we are doing will be applicable in two places only only two places first condition Number One X Factory price should be given X Factory price should be given and we need to take fright as 20% of fob in these cases only we need to do what are the two conditions for application of this assumption what price should be given in question if fob price is given in the question don't touch don't do like this if fob price is given in the question don't do like this in the question what price should be given X Factory price should be given and if the Fright is actual fright don't touch this so the Fright should be 20% when you will apply 20% fright when you will apply 20% fright if the Fright is not attainable or if the Fright is air fright in these two places only you will be applying this got it if the Fright is not attainable you will take 20% of fob or if it is air fright also we'll take actual or 20% of fob whichever is lower there only we will do this assumption so condition number one what price should be given X Factory price should be given condition number two you should be applying fright as 20% of fob okay when we will apply fright as 20% of fob in two cases case number one so when the ACT fright is not attainable or case number two when a fright is given we will take actual or 20% so I gave both actually first case first question which I made you right is actually C fright port and in that c fright we did not compare directly we have taken 20% of f but here also xfactory price is given one more question which we did from study material is actually X Factory price but air fright so we are comparing between actual or fob so these two cases we discussed actually okay now coming back to this adjustments to aob price this is adjustments which adjustment primary adjustment or secondary adjustment primary adjustment secondary adjustments already we have completed insurance and fight that is only as per rule 10 sub rule 2 now we are looking into primary adjustments as per rule 10 sub rule one the first adjustment is related to commission commission is divided into two buying commission and selling commission buying commission is the commission payable by the importer to his agent so who is buying who is buying importer is buying and so he appoint agent that commission is called as buying commission who is selling exporter is selling so he will appoint an agent to sell and that commission is known as selling commission so buying commission who will pay importer will pay to whom he will pay his agent he will pay means it is his expenditure and is it a indirect benefit to the exporter no his own expenditure that will not be included in the value so don't include buying commission where are selling commission actually selling commission who should pay to whom exporter should to should pay to his agent and where is his agent located in India where is importer agent located outside India why importers agent is outside importer is in India so one person should represent the Importer so he is outside India that is Agent of importer is outside India same way exporter is outside India but his agent will be in India so that's why the selling agent commission is also known as local agents Commission in many places so there for whenever they use the word local agents commission don't get confused it is not buying commission it will be selling commission and selling commission generally payable by the exporter to his agent so definitely that will not be included in the value but but if the commission of the exporter agent is paid by the Importer it's a indirect benefit to the exporter so that should be included in the value so selling commission paid by importer to whom exporter's agent is indirect benefit to the exporter so that should be included in the value that is this first part second part material which is sent by the Importer to exporter so importer is sending some material to the exporter and using that material exporter make the finished goods and those finished goods are being sent either material can be sent or capital goods can be sent or intangibles can be sent anything can be sent by the Importer to exporter so three things which are sent by importer to exporter what are the materials capital goods and intangibles using these three exporter is making the finished goods and that finished goods are being imported into India now in that finished goods exporter will not charge for these materials which are sent by the Importer or capital goods are intangibles because he is not spending them so exporter will charge only the conversion cost but we need to assertain the value of the imported goods that contains the material which is sent by the Importer also so this material cost should be included in the value of imported goods either at actual or at the apportion cost then apart from this any other expenses which is recovered by the exporter from whom from the Importer and is it before import or after import if it is before import no doubt it should be included in the value if it is after import then we need to check is it as a condition of sale or not as a condition of sale if it is as a condition of sale as per the Contra as for the contract it should be included example installation charges installation charges is payable for the import Ed Goods as a condition of sale of imported goods to India which means that exporter will only do the installation and we need to pay for this installation is this installation charges payable as a condition of sale as per contract yes so even though we are paying this after UT we need to include it whereas at the importer's request some customization charges customization charges which are payable by the Importer to the exporter is not as a condition of sale so it is a post import expenses so it should not be included in the value already I told you this log that post import expenses should not be included in the value so but only exception to that is what if that post import expenses is payable as a condition of sale as per the contract then it should be included in the value so these are the adjustments that we need to make for the fob price given and we get the fob price as per customs and to that we need to make the secondary adjustments sometimes it is not possible to determine the transaction value when it is not possible to determine the transaction value if the price is not the sole consideration or the import and exporter are related in that case so we will not take transaction value or sometimes the value is rejected by the Customs officer on the grounds of undervaluation usually Imports we do undervaluation to pay lesser customs duty in that case the value declared by the Importer will be rejected so tell me usually what should be taken as the ass value as per rule three of Customs valuation rules transaction value what is transaction value in case of import what is the transaction value CIF price just now we discussed now C price and the above adjustment shall be made as per rule 10 Customs officer shall not have any doubt as to truth and accuracy of the declared value what if he has he has a doubt with respect to the declared value he has a suspicion that the value declared by importer is undervalued in that case what he will do he will reject the value when he reject the value we need to determine the value as per rule four rule five rule six like that okay so now four condition should be satisfied it should be unrestricted sale and it should be unconditional sale it should be unrelated sale and price must be the sole consideration what if price is not the sole consideration or it is a sale between related parties or it is a conditional sale or it is a restricted sale or if the officer is not satisfied with the value in all these cases transaction value not applicable when transaction value not applicable we need to determine the value as per other rules you understood so tell me when transaction value not applicable come on conditional sale conditional sale means exporter is selling to importer and he's telling that you have to sell to this people only conditional sale or restricted sale or related party transaction or price is not sold consideration mean some other consideration is Flowing from the Importer to the expor reporter or if all these are not there but Customs officer not satisfied with the value declared in this case the value will be rejected when this value is rejected the value will be determined by the officer and that value here in this case remember this value is not determined by the Importer it will be determined by the officer we have rule four ass value in case of imported goods ass value of identical Goods so first transaction value remember this t i s d c r first transaction value if transaction value fails identical Goods if identical Goods fail fails similar Goods if similar Goods fail deductive value if deductive value fails computed value if computed value also fails then residual value okay so transaction value identical Goods similar Goods deductive value computed value residual value but between D and C it is interchangeable first can be C next can be D either deductive value first and then computed value or it can be computed value or deductive value but we need to apply it in the sequence only so first when transaction value fails we need to apply which value identical Goods all these valuation will be done by the Importer or the Customs officer Customs officer identical Goods means that is also imported goods so you need to know the definition of the identical Goods first what is the meaning of identical Goods that also important and imported having the same physical features and quality and that is also imported from the same country where from where you have imported and that should also be imported from the same producer preferably not necessarily from the same producer preferably same producer for example you are importing LG washing machine and this LG washing machine when you are importing from Japan so what is comparable identical Goods the is also washing machine only and if you are importing topload washing machine that comparable is also topload washing machine only as you imported from Japan that also should be imported from Japan and if you are importing LG can the Samsung be taken as identical Goods yes Samsung can be taken as identical Goods not necessary same producer same producer preferably Samsung can be taken but that Samsung also should have the same physical features and quality which means if you are importing top load and in that top load if it is a steel dram Samsung also should be top load steel dram and if you're importing 6.5 kg that should also be 6.5 kg everything should be same but the brand name alone can be different because the producer need not be same preferably the same is only they are telling suppose if they imported from Taiwan so can that be taken as identical Goods no because it should be from the same country come on respond what is the meaning of identical Goods imported goods same physical feature and quality and same country and same person preferably and we need to make three adjustments to this what are the three adjustments number one adjustment with respect to the quantity suppose if you have imported 2,000 units and the other person has imported 3,000 units had he Imports 2,000 units whatever is the value that should be taken because it should be comparable at the equal stage suppose if there is a difference in the quantity we need to check what if he Imports your quantity what will happen to the price maybe he will not get the discount so that adjustment we need to make then adjustment with respect to the transportation cost for example you imported to Chennai Port whereas he imported to Mumbai poort suppose if that is imported to Chennai poort there will be some extra fright so that should be added so that is how we need to make the adjustment and next number three adjustment with respect to difference in the commercial level of importation say you imported from manufacturer and that person imported from a distributor had he imported from manufacturer the distributor margin will not be there so the distributor margin should be taken out so that is called as difference in commercial level of importation after making these adjustments only it will be perfectly comparable first it should be identical goods and then we need to make these three adjustments and if you get multiple values which value should be taken lowest of such value shall be considered so my making this maybe some four identical Goods values we might be getting so in that the lowest of such value should be taken for valuation then suppose if this identical Goods fails then what we need to do we need to go for similar Goods what does similar Goods says similar Goods has a slight difference similar Goods should also be imported goods but commercially interchangeable can a front Lo washing machine be taken as a comparable to topload washing machine yes that can be taken because it is commercially interchangeable but washing machine only fridge and all we cannot take a comparable okay under similar because commercially interchangeable the purpose should be the same but it can be commercially be interchange maybe semi automatic also can be compared with automatic like that okay but it should be washing machine that is the meaning commercially interchangeable but other two points are same produced in the same country produced by the same person preferably but not compulsory country should be same and we have to make four adjustments now what are the four adjustments the first three adjustments same difference in quantity difference in transportation cost difference in commercial level of importation is same but what is the extra adjustment we need to make difference in the material and Engineering work so that is like we are comparing a top load with a front load so usually there is a difference between top load and front load to the extent of 15,000 rupees there will be a difference so that adjustment we need to make and what if we get multiple comparable values we need to take lowest of such value then rule six when the above rules are not applicable rule three transaction value that is EF price rule four identical Goods rule five similar goods and Rule six suppose if it is not possible you can decide between either deductive value or or computed value I told you there's already that either we can follow rule seven or rule eight in any order so therefore deductive value what does deductive value says deductive value is like a bottom up approach whereas computed value is like a top- down approach so usually under bottom up approach we need to take the sale price in India after importation from that you do all the back workking and go to price at the time of importation usually how we will get the price in India selling price in India price at the time of importation plus all post importation expenses you will add you will get the selling price in India now so take the selling price in India and minus what all post importation expenses so selling price of imported goods or identical Goods or similar Goods to unrelated buyers in India minus post importation expenses including the customs duty if you deduct you will get the value at the time of import this is known as deductive value whereas computed value will be top down approach top down approach means we will take the cost of production that is at which stage Factory of the exporter material cost labor cost conversion cost or Etc cost of production profit and general expenses plus frighten insurance from where to where frighten insurance from the exporter pter airport to importer place so that is frighten insurance as referred above then this will be called as computed Value method but sometimes when there is a deductive value as well as computed value you can choose whichever is lower well you can choose whichever is lower that's what rule six says that value can be determined as per rule seven or rule eight in any order okay and rule 9 talks about best judged value so when it is not possible to determine value as per any of the above rules then Customs officer based on the principles of valuation so he will be determining general principles of valuation he will determine the value and that will be taken okay suppose if you don't want to pay that particular value based on that value you can go for appeal against that so they will pass a assessment order against that you can go for appeal that is up to this you understood next what will be taken as a valuation in case of export you tell me what is the value in case of export fob price should be taken as value in case of export and any adjustments required no in case of import only adjustments required in case of fob everyone will declare more value so Customs officer will try to reduce the value why we will declare more value in case of export because of export incentives in case of import we declare lower value because we need to pay the customer Duty so he will add the value whereas in case of export we declare a higher value so off user will try to reduce the value so there is no adjustments in this case just the fob price declared will be taken but sometimes this fob price declared will be rejected if the officer is of the opinion that we have inflated the export value to claim more benefits they will reduce this value so looking into the next page rule three but this is also Customs valuation rule sir same rule how we will have no not same rules actually it is customs valuation rules itself we have two rules Customs valuation for imported goods rules 2007 Customs valuation for exported Goods rules 2007 same year the Year of the rules is same but we have two separate set of rules in this rule three says Ass value transaction value what is the transaction value fob price will be taken as a transaction value here if you want to write down so in case of import what is a transaction value C price will be taken as a transaction value but here what should be taken as a transaction value fob price will be taken as transaction value but the proper officer should satisfy that the declared transaction value is genuine even in case of related party transaction value may be acceptable then suppose if it is not possible to take this transaction value because of the I told officer is of the opinion that the value declared is not correct then rule four transaction value of goods of like kind and quality they did not use the word identical Goods they use the word like kind and quality like kind and quality means what that should also be exported goods for example you are exporting a missionary from India so comparable should also be a missionary exported from India so exported Goods having same physical features and quality for example you're exporting a LED TV so that should also be a LED tv that should not be LCD TV or OED TV that should also be a LED TV and produced in the same country so if you are exporting goods from India that LED TV is also exported from India and produced by the same person so suppose if uh you are manufacturing it so that should also be manufactured by you but preferably not compulsory you understood and then we need to make three adjustments actually this is similar to that uh rule for identical Goods okay and adjustments three adjustments we need to make what are the three adjustments difference in quantity difference in transport cost and difference in commercial level of exportation suppose if we get multiple values what we need to do lowest of that value should be taken and as for rule five computed value computed value means what cost of production plus profit and general expenses why we don't have fright and insurance and all because if you see previous case computed value cost of production profit and general expenses plus fright and insurance we have taken because we need to take the price prevailing at the importation whereas in case of export we need to take the price prev sing at the exportation in that case so we will not add fright and insurance so just cost of production profit and general expenses then if suppose it is not possible we need to determine the value as per best judgment value where in customs officer considering the you know various principles on valuation he will determine that is known as best judge value then finally we have valuation in case of secondhand Goods so in case of secondhand Goods what we need to do is that first we need to check whether we need to get the report of overseas chattered engineer because secondhand Goods basically will not have a uniform value because at which stage it is secondhand one year used is also second hand three years used is also second hand five years used is also second hand so because of that there is no proper value for this so we need to get a chartered engineer certificate from outside India if we get a chartered engineer certificate from outside India that value declared by the chartered engineer outside India only will be taken as a value for payment of custom duty where the report of overseas chart then submitted by import for yes that declared value will be based on formia only and we need to pay custom duty based on that suppose we are unable to get the chared engineer certificate from outside India then we need to produce the chartered engineer certificate from India but that will not be directly be taken by the Customs Department that will be compared with the value declared by the Importer and the depreciated value of the goods so comparison between value declared by importer and value as per report of Indian chartered engineer and depreciate value of the goods if there is no much difference more or less all these three values are same then the value declared by importer only will be taken if there is a huge difference say the depreciated value is five lakhs but the value declared by the Importer is one lakh like that if there is a huge difference then in that case proper officer shall seek an explanation from the Importer and importer should provide the explanation if the explanation is satisfactory then also declared value will be taken otherwise officer will determine the value as per the above rule four to rule 9 okay that's it these are the points that we have in valuation and we will see one more question related to rule 7 that computed Value method is there now say this question number 22 Mr X imported certain goods from a related person Mr Q of us and transaction value has been rejected so it is import import transaction value rejected rule four and five of the imported valuation rules are found inapplicable so identical Goods also failed similar Goods also failed as no similar or identical goods are imported into India Mr X furnishes cost related data of imports and request Customs authorities to determine value accordingly as per rule 8 the relevant data are cost of materials incurred by Mr Q is 2,000 so we need to take the computed value in computed value we need to start with the material cost and add everything but ensure that post importation expenses you are not taking got it so whether it is pre-import or post import cost of material incurred by Mr Q is pre-import or post import pre-import before import so we need to take that 2,000 we will take next fabrication charges incurred by Mr Q pre or post pre so therefore we need to add this th000 and other chargeable expenses incurred by Mr Q pre or post pre so therefore 400 Q is exporter yeah Q is exporter other indirect cost incurred by Mr Q 250 pre-import and fright from Q's Factory to Us Port yes or no should it be taken in fob yes so plus 250 plus loading charges at Us Port is it also his cost yes so plus 100 now what we got 4,000 is 4,000 fob no still we have not added profit still we have not added profit 4,000 is is cost whose cost Q's cost Q's cost now we need to add the profit sir what about air fright and insurance this is afterwards afterwards we will get the air fright Insurance aftering the fob correct or not so therefore we should not take it now so we need to take the profit so how much is the profit 20% of fob but what we got is cost so after you add profit only you get the fob so if 20% is on sales fob is selling price if 20% profit is on sales then how much will be on cost 25% on cost let sales be 100 profit is 20 on 100 so but cost on on cost means 20 by 80 20 by 80 is what 25% so therefore what is the cost that we have got so far $4,000 for this $4,000 add 25% that will be $5,000 is taken as the fob price are you understanding this so $5,000 is the fob as per Customs to this we need to add fright and insurance because everything should be taken up to the importation Place correct so what is the insurance what is the insurance ascertainable or not ascertainable ascertainable so we will take 5050 so so far we have gotten this $5,000 as the fob correct fob price we got as $5,000 and insurance we need to take what is the insurance $50 and air fright also we need to take what is air fright don't take fully we have to compare actuals what is actuals what is actuals how many times should I tell you X Factory price is given here x Factory price is given we have calculated from the factory gate so we need to take actuals as fright from Factory gate of the exporter that is 250 plus 100 + 1,500 250 + 100 + 1,500 how much it will be 1,000 $1,850 r b 20% of fob what is 20% of fob ,000 whichever is lower which is lower whichever is lower that is $1,000 and to this th000 minus already in fob what is already in fob 350 this 250 and 100 350 then how much will be taken as air fright $650 will be taken now what is the CIF price because we don't have any other cost in the question we don't have any other cost so therefore how much will be taken 5,700 into what is the exchange rate given in the question 70 per dollar so into 70 that will be 5,700 into 70 3 lak9 9,000 is taken as the ass value as per deductive Value method but see the point below the Customs authorities are of the opinion that since a value as per rule 7 can be determined at four lakhs that is deductive value can be determined at four lakhs there is no need to apply rule eight true or false false so even if the dtive value is applicable it is up to the Importer to choose either computed value or deductive value but in this case as the computed value is less than than the directive value 399,000 only will be taken as the ass value for payment of customs duty is it clear so see the answer for this question number 22 clear 399,000 is taken as the answer understood and that paragraph We need to write what is that paragraph So as per rule six the Importer can choose either deductive value or computed value okay fine so we completed taxable event and valuation under Customs we'll take a break and then we will proceed to types of customs duties okay so we'll meet after 15 minutes take a break for 15 minutes and online students if you have any doubts just post your doubts I'll clarify after break even if you guys have any doubts in your in the break you can ask me e e e e e e e e e e e e e e e e e e e e e e e e e e e e e okay we'll start looking to page 191 segment 25 classification of goods and types of customs duty in that classification of goods under Customs actually we have only these rules related information that will be tested so that's why I have just given this much on so general interpretative rules or rules for interpretation of tariff so tariff is like uh we have list of goods on which we need to pay customs duty different different goods are there and different rates are there and this particular tariff whenever we are unable to identify the product that we have imported or exported in the Tariff how to interpret this tariff for that we have rules rule number one which says that titles are for reference only which means so we should not classify based on the headings of or any title Etc we need to read the relevant section notes and chapter notes and then only we will be able to do the classification for example so Prima fa when you see the heading it appears that the product will be coming under that heading but read the relevant section notes and chapter notes then you will get an idea as to whether this product what you have imported is really coming under this heading or not that's what rule one says the titles are for reference only classification based on headings r with section and chapter notes then 2 a says if you are importing a car without Tire or if you are importing a car without seat where will you classify that you have to classify along with the car only because even though incompleted goods are imported that incompleted goods are classified along with the completed Goods provided the incomplete goods are having the essential characteristics of the completed Goods so when you are importing a car without Tire still it is a car when you're importing a car without seat still it is a car so therefore that should be classified along with the car only but not under parts of car but when you are importing really the parts of the car say engine you are importing or any parts of the car you are importing that will only come under parts of the car but when there is a incomplete product it should not be classified as Parts it should be classified along with the completed product so any reference to completed Goods also includes incomplete or unfinished Goods that is completed goods equals to incomplete or unfinished Goods then 2B says any reference to a material includes combination of that material with the other material for example you are importing coffee coffee is having a separate heading but if you are importing coffee with chori so you are not importing coffee per se you importing coffee which is mixture of coffee with chori where you should classify under coffee only same way you are importing gold you have to classify it under gold what if you are importing a gold article which is partly made up of gold and partly made up of copper where will you classify under gold only so any reference to material includes combination of that material with other material then next one says Whenever there are two headings one is a general heading and one is a specific heading generally we need to prefer specific heading over General heading for example you are importing a shaving machion so electric shaving machion and there are two headings one heading says electr mechanical domestic appliances with self-contained electric motor like that one heading is there another heading says Shavers and hair clippers when you are importing electric shaver it will come under both the headings because it is a domestic appliance with a motor so it will come there also and it will come under Shavers and hair clippers also but which is specific heading Shavers and hair clippers is specific heading over the general heading so we need to prefer specific heading over General heading then whenever you are importing articles that is like when you are importing a product that product is containing multiple you know articles for example example you know you are importing a uh mobile when you're importing a mobile that mobile comes with charger and the mobile comes with headset like that so when you are importing a geometry box the geometry box contains drawing instruments eraser pencil sharpener these are all different different editings so where we should classify so a product contains multiple articles we need to classify it based on essential character so in the geometry box what is essential character we have total five in the geometry box box metal box one heading drawing instruments one heading and then pencil one heading eraser one heading sharpener one heading so where we will classify what is the essential character in this drawing instruments is essential character so we need to classify based on that so you can see classification shall be as per essential character if a particular product is mixture or composite of goods containing different materials suppose if both the headings are specific which should be taken so we need to take which comes last in the numerical order for example 8702 is motor vehicle for transportation of persons 8703 motor vehicle for transportation of goods you are importing a motor vehicle that can be used both for transportation of goods also for transportation of persons also for example this Isuzu vehicle is there now the Isuzu vehicle on the back so there will be a very big space wherein you can use it for transportation of goods the same vehicle can be used for transportation of persons also even T is kind of vehicles it can be used for transportation of goods also transportation of passengers also when both the headings are specific which heading should be taken which comes last in the numerical order what is last in the numerical order 8703 8704 03 is passenger vehicle 8704 is Goods vehicle so therefore we need to put it under Goods vehicle which comes last in the numerical order the latter the better then rule four talks about Akin Goods Akin Goods means similar goods for example you are importing this Su glare protector film car car or vehicle Suare protector film you are importing that Suare protector film we don't have any separate heading but it will be classified under blinds and curtains because blinds and curtains is also for the same purpose to filter the sunare same purpose we are using this also microfilms also Sun microfilms due to that reason it will be classified under that similar so when you are not have not having exact Goods you classify it under similar so a Goods last tool of classification where in Goods under question can be classified under that heading which is most related to the set Goods rule F talks about packing containers so whenever you are importing some packing materials or packing containers and if the packing materials or packing containers is used only for that particular product it should be classified along with that product for example you're importing a violin box violin box cannot be used for keeping anything else only violin so therefore what is the rate applicable to violin box the rate applicable to violin only will be taken same way you are importing jewelry box jewelry box can be used only for the purpose of keeping the jewelry so whatever is a rate applicable to jewelry the same thing should be taken for jewelry boxes also but what if the Articles packing materials is general means not specific then we should see the separate heading for it rule six says Goods can be compared for classification at the same level only which means under the chapter one heading and another heading can be compared but one heading in one chapter whereas another heading in another chapter cannot be compared So within the chapter only the comparison can be made that is the meaning of goods can be compared for classification at the same level only that is so headings are subheading but one heading with chapter cannot be compared so one heading in this chapter cannot be compared with heading in another chapter so mainly for mcqs or somewhere this will be helpful okay next one what we have is types of customs duties already we have discussed how to compute the customs duty payable so we have basic customs duty that basic customs duty will be given in the question itself and it should be computed on what ass value and we have two types of rate standard rate and preferential rate look out for the question in the question if they give standard rate as well as preferential rate apply preferential rate only if we are importing from some countries with which India is having trade agreement so that point should be given in the question in the question they give standard rate as well as preferential rate but the statement should be given so these Imports are made from the countries with which India is having a trade agreement like that somewhere if the line is given then don't take the standard rate take the preferential rate and social welfare searge always social welfare sub charge is 10% of basic customs duty and there is something called as agriculture infrastructure development mostly that will be asked to ignore so we will not take suppose if we have aidc agriculture infrastructure development say it should be computed on what it should be computed on ass value and it will be coming in the step one so in step one we discuss now basic customs duty social surcharge in that step one itself it will come okay aidc agriculture infrastructure developments is you just write down agriculture agriculture infrastructure [Music] infrastructure development development says Aid DC at notified rate at notified rate on assessible value so it will be part of step one it will be part of step one only if it is given in the question you take otherwise don't take okay only it should be given in the question so that's what I said notified not on all Goods only on notified Goods that will be applicable then mostly in almost every question they will be giving ignore aidc like that only they will give the questions but suppose if they give aidc then you need to take it this way then we don't have education sets and secondary and higher education s at present so that is omitted then igst and GST compensation say again if it is given in the question only you take and that two it should be computed on what ass Value Plus all the customs duties why all the customs duties because in GST we have one point section 15 subsection 2 Clause a which says that all taxes and duties and says other than GST should be included in the value due to that reason while Computing GST we will add all customs duties then next see this note one in the past on Imports there used to be cvd counterveiling Duty under Section 3 subsection one to counterbalance what excise duty but at present excise duty got subsumed into GST so cvd also got subsumed into GST so was levied in order to counterbalance excise duty and special additional duty under 35 was levied in order to counterbalance the sales tax however now on account of GST its applicability is limited to few goods what are the few goods for which its applicability is limited already we discussed cvd is limited to three Goods what are they alcoholic liquor for human consumption petroleum products tobacco and tobacco product products whereas special additional duty is restricted only to petroleum products then in case of exports the basic customs duty is only applicable social Fair surcharge is not applicable you understood so only basic customs duty is payable and if exports are chargeable to duty so just like that exports is given don't compute the customs duty check for the rate in the question only if rate is there we need to pay customs duty because not all exports are chargeable to customs duty there are only few exports which are chargeable to customs duties then note three in case of warehoused goods sold by way of transfer of Warehouse receipt igst under Customs will be computed on ass Value Plus basic customs duty plus social for surcharge or sale value of such Warehouse receip whichever is higher let's try to understand this with an small example say Mr a has imported the goods Mr a has imported goods and imported for $10,000 Mr a has imported for $10,000 and what Mr a did he kept those goods in the Customs Warehouse so those goods are deposited in customs Warehouse when these goods are deposited in customs Warehouse Mr a would have paid the customs duty or not paid customs duty not paid the customs duty now what a is doing a is transferring this Warehouse receipt to Mr B so a transfers Warehouse receipt Warehouse receipt a has transferred to B and for which B has paid to a $11,500 you understood up to this a has imported for how much $10,000 yeah has deposited the goods in the customer warehouse and he got a warehouse receipt that warehouse receipt is the document of title to the goods so a has transferred this Warehouse receipt to B for which B has paid $11,500 to a is this sale made by A to B is covered under GST no it is excluded from Supply so which means this $11,500 Mr a is not required to pay any GST so this particular transaction is not a supply it is excluded from Supply that is under GST so where sale of rosed goods under Customs is excluded from GST now who will file the bill of entry for clearance of goods from the Customs Warehouse Mr B will file bill of Entry which bill of Entry X Bond bill of Entry correct or not so X Bond bill of Entry will be filed by Mr B for payment of customs duty now what is the customs duty payable if basic customs duty is 10% social welfare surcharge is 10% and igst is 18% how much how much is the customs duty payable customs duty payable by Mr B you understood the question again I'm repeating Mr a has imported for $10,000 he deposited the goods with the customer warehouse and for which he got the warehous receipt that is a document of title he transferred that wos receipt to Mr B and for which Mr B has paid $1,500 to Mr a and this particular sale is excluded from Supply this is exclud included from Supply under GST under GST now B will file the expon bill of entry and B is required to pay the customs duty so the question is how much customs duty is payable by B if the basic customs duty is 10% soal for sub charge is 10% and igst is 18% simple first what should be taken as the ass value you understood this question please respond here what should be taken as the ass value in this case the ass value in this case will be taken as 11,500 or 10,000 10,000 the ass value will be taken as 10,000 only so even though B is clearing the ass value will be 10,000 only not 11,500 don't forget this so in case of Warehouse duts cleared from the Customs the ass value will be the original ass value only what is the original aible value 10,000 that should only be taken and let's take the exchange rate The Exchange change rate as 80 rupees per dollar so how much will be taken as aible value 10,000 into 80 that will be 8 lakhs will be taken as able value now we need to compute the basic customs duty how much will be the basic customs duty at 10% of rupees 8 lakhs that will come to 80,000 Rupees is the basic customs duty social welfare surcharge at 10% of rupees 80,000 that will be 8,000 and next we need to take igst related to this only this note three is given what is it they're telling igst at the rate of 18% on a a will be assemble Value Plus basic customs duty and social fair searge that is 8 lakh 88,000 or B what is the price at which these goods are sold 11,500 into 80 what is 11,500 into 80 sir what is the price at which these goods are sold to Mr B transaction value at which these goods are sold to be 11,500 into what is the exchange rate 80 rupees per dollar that will be 9 lakh 9 lakh 20,000 whichever is higher whichever is higher Which is higher 920,000 will be higher on that 9 lh20 you take 18% what is 18% of 920,000 1 lakh 65,66 will be taken this is the customs duty payable so what is the customs duty payable so 80,000 who will pay B will pay 80,000 plus 8,000 plus 1ak 65,66 that is [Music] 23,600 is the customs duty repayable understood so even if you are not able to write all these things in the speed in which I am writing don't worry I will share all these notes handwritten notes as a G Drive Link in the description to this video so in YouTube video is there now in that today evening once the class gets over day wise whatever notes is there that will be uploaded so you can just track whatever is that information okay don't worry about this but if possible you write so so that you know you keep yourself engaged for that reason okay so now this is the customs duty payable 23,600 are you understanding this now read that note once again what does it says in case of wost goods sold by way of transfer of wost receipt correct a is transferring the warehouse receipt now igst under Customs not ass value igst under Customs shall be computed on what regular regularly how you will compute agst ass value basic custom duty social forar charge or sale value of such warehous receip whichever is higher so due to that reason only we are taking it this way suppose in this question what will be your answer if a is clearing the goods and thereafter you know a is making sale to B okay what will happen if if Mr a clears from Warehouse if Mr a clears from Warehouse and later sell it to Mr B sell it to Mr B for you know 11,500 then what will happen in this case who will pay customs duty are B customs duty payable by Mr a customs duty payable by Mr a what will be the ass value $10,000 into Rupees 80 per dollar that will be rupees 8 lakhs and what will be the basic customs duty at the rate of 10% on 8 lakhs that will be 80,000 and social welfare sub charge at the rate of 10% on 80,000 that will be 8,000 and then we need to take igst should we do the comparison no no don't do the comparison igst at the rate of 18% on 8 lakh 88,000 that is normal normal don't do the comparison normal you take so that will be 8 lakh 88,000 into 18% 1 lak 59840 so therefore customs duty will be so 2 lakh 47 840 customs duty payable will be this now thereafter what a will do Mr a shall Avail itz of Mr a shall Avail itz of rupees 59840 should it be reflected in gstr 2B answer should it be reflected in gstr 2B no because this particular customs duty igst paid need not be reflected in 2B even if it is not reflected in 2B this can be taken as ITC okay so this is called as GST paid under RCM so therefore no need but mostly it will be coming in 2B I'm not telling that it will not come in 2B it will come in 2B but even if it is not coming in Tob we can still take the ITC keep that in mind okay so Mr a shall Avail ITC of 1 lakh 59 814 now a is making sale to be whether that will be trade as Supply under GST yes sale by Mr a to Mr B is Supply under GST why is it not excluded from Supply what is excluded from Supply if a is not clearing the warehouse receipt is transferred to B and B is going and clearing then a is not required to pay a GST that is excluded from Supply but in this case a has cleared the goods from the Customs as a has cleared the goods from the Customs so it will become Supply under GST it is not excluded from Supply then what is the gross GST payable by a gross GST payable how much a value 11,500 into what is the exchange rate 80 rupees per dollar into sir but for GST why are you taking 80 rupees per dollar my dear for the purpose of time of Supply also we need to take exchange rate as per cbic Only Rule 34 of cgst rules rule 34 of cgst rules 2017 says when ever we are determining the GST computation we need to convert the foreign currency into Indian rupees using the same cbic notified rate for goods for service only we need to take Gap rate here what is the cbic notified exchange rate 80 for Customs what is the cbic notified rate 80 the same cbic notified rate we take even for GST computation also you understood so therefore into 80 rupees per dollar so 11,500 into 80 how much that comes to 920,000 into what is the rate of GST 18% into 18% 1 lakh 65,66 but this itz is there now minus itz utilized what is that it utilized 1 59,800 but you need to always check this point what is that there is one rule called as rule 86b which says that if if your taxable turnover exceeds 50 lakhs in a month in a month concentrate if the taxable turnover in a month exceeds 50 lakhs not total turnover taxable turnover it excludes Exempted it excludes non- taxable it excludes zero rated you should see the taxable turnover if it exceeds 50 lakhs you cannot use full ITC so out of the liability 99% only you can use from electronic credit Ledger 1% you have to pay through electronic cash Ledger okay but that point is not applicable here why not applicable remember when you will apply rule 86b you know whenever you have sufficient balance in ITC then only you apply rule 86b which means you have an ITC in this case more than or equal to your gross liability what is itz in this case less than your gross liability don't apply rule 86b you know when you need to apply rule 86b in the question you see the gross liability and you see the itz if the itz is more or equal to the gross liability then rule 86b of cgst rules you should apply and here you don't have to because your gross liability is more than your ITC so fully you can use and balance will be the net GST payable so what is a net GST payable 1ak 65600 minus 1 L 15984 that will be 5,760 will be taken as net GST payable are you understanding this now this is about in case of warehoused goods sold second one cleared from the warehouse and then sold you understood now let's take another combination what if what will be your answer if Mr a transferred documents to Mr B even before even before depositing Warehouse even deposit even before depositing Warehouse then then what will happen it is called as I sale and in case of I sale so whether any GST payable by Mr a no so GST not payable by Mr a why GST not payable by Mr a because it is excluded from Supply as it is excluded from Supply GST not payable by Mr a then who will pay the customs duty who will file the bill of Entry Mr B bill of entry for X Bond bill of Entry or Bill of entry for home consumption bill of entry for very good bill of entry for home consumption keep it up because we are not depositing the goods in Warehouse Mr B is going to clear it for his place so he will not file inbound bill of Entry or X Bond bill of Entry he will file bill of entry for home consumption bill of entry for home consumption filed by filed by Mr B so what is the customs duty payable and customs duty payable by Mr B how much will be taken as the ass value come on ass value equals to $1,500 not 10,000 are you understanding the difference in case of high SE theable value is the last purchase price not the original import price the last purchase price should be taken what is the last purchase price $11,500 into Rupees 80 so $1,500 into 80 will be 920,000 will be taken as a sub value and after this we need to take basic customs duty what is a basic customs duty basic customs duty at the rate of 10% basic customs duty at the rate of 10% on what 9 lakh 20,000 previously we took on 8 lakhs but now customs duty will increase so now it you tell me what is the better option so deposit in warehouse and then sell or before depositing warehous itself you sell before depositing in Warehouse itself if you sell you are going to pay higher customs duty so better to keep it in the warehouse and thereafter you sell it so that Mr B will be paying the Lesser custom duty because basic custom duty itself you see somewhere it is going correct or not so 920,000 into 10% 920,000 into 10% will be 92,000 social welfare sub charge at the rate of 10% on 92,000 that will be 9,000 200 I GST at the rate of 18% should we do the comparison or no need to do comp comparison no need to do comparison normal ass value basic custom duty social sub charge what is that ass value how much 9 lh20 basic custom duty 92 and social surcharge 9,200 that is 10 lakh 21,200 into 18% that is 1 lak 83816 so what is the total customs duty payable total customs duty payable $92,900 1H 183,000 816 that will be 2 LH 85,681 [Music] 16 so small small differences only you need to appreciate these differences what is that ass value in case of sale of arosed Goods is the original import price only will be taken whereas in case of high SE sales the last purchase price will be taken but for computation of igst in case of warehous goods we will take the regular ass value basic custom to social for sub charge or transaction value at which these warehous goods are sold whichever is higher but in case of high sale normally we will do the computation of igst that comparison is not there is it clear and Sir what if the price at which these goods are sold is less than you know less than the price at which it is imported for example they are importing for $10,000 and they are selling it for $99,000 in that case what will happen in case of highes in case of highes they're importing for 10,000 but they're selling for 9,000 how much will be taken as the ass value $9,000 only will be taken so the last purchase price will be taken not necessary that the last purchase price should be more than the original import price if Mr a is originally importing for 10,000 and thereafter Mr a is selling to Mr B for $9,000 so $9,000 only will be taken but Customs officer will definitely question as to why the price has been reduced so if there is proper justification that will be taken otherwise rule three rejection of value transaction value declared and value determined as per identical Goods similar Goods Etc that will come into the picture understood next so this is the note three which we discussed elaborately then note four where basic customs duty is nil social Fair sarge is also nil and of course because social forch charge is 10% of basic basic is zero social sarge is also zero then we have some additional customs duties what are the three additional customs duties I told you on import we will pay Safeguard Duty anti- subsidy Duty and anti-dumping duty but we have protective Duty protective duty is not actually additional customs duty it is enhancement of the basic custom duty means it will not come anywhere in the computation steps so basic custom duty regular basic custom duty if is 10% means wherever protective duty is there the basic custom duty will go to 30% or 40% like that which means it is not a separate line item in the regular basic customs duty itself inbuilt in the basic custom duty there will be increased rate that is this protective Duty and protective duty is given under Section six of Customs Tariff Act Safeguard Duty Section 8 B of Customs Tariff Act anti- subsidy Duty sometimes anti- subsid Duty also called as counterveiling Duty in the questions given in the exam but that is under Section n so why it has been separated because we have already one counterveiling duty under Section 3 subsection one this counterveiling duty is to counterbalance the excise duty but this is under three subsection one this is counterveiling Duty under Section n so both are counterveiling duties only but then the confusion will come so that's why you remember it like anti- subsid Duty even in study material also they use the words anti subsidy Duty only but under Section n of Customs tar act then anti-dumping Duty will be section 9 of Customs tar act now first we will try to understand why there will be these duties so number one protective duties all these are mainly to protect the domestic manufacturer but against what so normally to protect the domestic manufacturer they will be bringing protective Duty for example you are importing some staple Goods of India what are the staple Goods of India usually it is already produced in India rice wheat Etc are the staple Goods if you are importing what will happen to the domestic production will it get affected or not affected affected so therefore protective Duty will be levied in order to discourage the import okay and next we have Safeguard anti- subsidy duty anti-dumping duty for same reason to protect the domestic industry but Safeguard duty is to protect the domestic industry against large Imports when you are importing in large quantities in order to you know stop you from importing in large quantities they will be living something called as Safeguard Duty you can see this so protective duty is to protect the interest of any industry established in India against Imports but Safeguard duties for what reason Serious injury to domestic industry on account of what large quantities importing large quantities anti subsidy duty is also to protect the domestic industry on account of what granty subsidy Duty in order to compensate the subsidy on the exported article to India so like for example China is giving subsidy to a manufacturer in China China government is giving subsidy to a manufacturer in China that if they sell to India they enjoy that subsidy as they enjoy subsidy what manufacturer in China will do he will sell to India at a lesser rate so which means that the imported article is cheaper why it is cheaper because it got the subsidy so now we will ly anti- subsidy Duty by adding the subsidy so that the price will increase so serious injury to domestic industry on account of subsidy enjoyed in export pricing anti-dumping Duty for what reason manufacturer in outside India what he will do he will manufacture in uh you know large scale when he manufactures in large scale he will sell in his country at a normal selling price but he will export to India at a lesser price just to recover his variable cost marginal costing so because whenever we study marginal costing we would have studied export order means accept if the contribution is positive he will also learn marginal casting now so therefore he will also sell to India whenever the contribution is positive which means he's selling to India at a price less than his selling price means he's trying to dump the goods in India at a cheaper rate so then in India there will be something called as anti-dumping Duty that is levied by the Indian government to increase the price of these Goods so serious injury to domestic IND on account of what on account of import of goods at a cheaper rate how we know that it is import at a cheaper rate compared with their selling price who selling price exporter selling price not import like in India so exporter selling price compared to exporter selling price is exporting to India at a cheaper rate that is this point are you understanding when which Duty will be coming so tell me in case of large quantities Safeguard Duty and if subsidy is there in the product ex prise anti sub sub duty if they're selling to India at a price less than their domestic selling price anti-dumping Duty normally to protect the domestic industry protective duties you got it now whether the exports made in case of Safeguard duty is fair export or unfair export it's a fair export you are importing in large quantities that is not the mistake of the exporter or the exporting country it's a fair export only and you are importing in large quantities so that is not their mistake so due to that reason in case of Safeguard Duty that is levied it cannot be levied for a period Beyond 10 years as it is a fair export there is no mistake of the exporter or exporting country so in India you can Levy Safeguard duty but for a maximum period of 10 years so means it will be levied for a period of four years and it can be extended for a further period of 6 years but the maximum will be 10 years but anti- subsidy Duty and anti-dumping duty is on account of fair export or un export unfair export so what is happening unfair export by whom exporting country so country is doing a trade war with us so they are giving subsidy to the exporter so that exporter is selling to India at a cheaper rate so it is a mistake of the exporting country whereas anti-dumping Duty also Fair export or unfair export unfair export in the other Market they are dumping at a lower rate you understood so mainly for the purpose of creating you know sales in other Market they cannot spoil the domestic manufacturer in this market are you getting this so therefore it is unfair export by whom country exporter exporter so due to that reason in these two cases as it is an unfair export there is no time limit it can be leved for a period of 5 years and it can be extended for a further five years at a time after review means there is no time limit for every five years they will conduct a review and if required they will be extending this so maximum will be unlimited time are you understanding the time limit logic okay so Safeguard Duty will be lived for 4 years plus 6 years maximum 10 years whereas anti- subsidy Duty and anti-dumping Duty will be levied for a period of 5 years plus 5 years plus 5 years like that but the maximum is unlimited time then next next Point who is the authority to Levy protective Duty will be levied by central government even these also levied by central government but slight difference is there so these three are levied by central government based on receipt of complaint from the domestic industry which three Safeguard anti- subsidy anti- dumping but protective Duty as it is General so there is a tariff commission which is appointed by the central government that tariff commission will give recommendations to the central government based on that recommendations so central government will be living there's no need of making any complaint etc for protective Duty are you getting this then here what is the ex ENT of relief so once protective duty is levied what they will do they will increase the basic customs duty for example on import of ATA at a time they went for 40% basic customs duty ATA ATA is there to make chapati okay wheat floor P not weed wheat wheat floor for import of wheat floor so they have levied customs duty of 40% here everywhere wheat Flor is available and like a idiot you are importing so what is the need of it so they have increase that is called as protective Duty okay so increase in basic customs duty whereas Safeguard Duty Safeguard duty to the extent adequate to prevent the remedy so therefore they will give a percentage that percentage you need to multiply on the ass value or landed value depending upon the question okay so rate shall be specified in the question but we need to compute it on what either accessible value or landed value and so see this what is the difference even anti- subsidy Duty also same like a percentage percentage rate shall be specified in the question for these two cases you just write down computed either on computed either on computed either on able value or land landed value what is landed value means landed value means accessible Value Plus basic customs duty plus social welfare sub charge sir if the question is silent we need to compute it on what ass value okay so note compute on a compute on a if question is silent usually they will give whether it is an ass value or landed value like that it will be given in the question itself but if the question is silent you compute it on ass value given in the question okay whatever you do the computation ass value on that itself and landed value will be what ass value basic customs duty and social welfare sub charge this is common point for both Safeguard Duty as well as anti- subsidy duty but anti-dumping duty is not like that anti-dumping Duty will be lower of dumping margin or injury margin so we need to take whichever is lower okay now concentrate who is dumping exporter is dumping so you tell me what could be The Dumping margin the price at which he is selling in his country minus the price at which he is exporting to India are you understanding so what is dumping margin normal selling price in exporter country minus export price to India then what is injury margin who is getting injured the domestic manufacturer is getting injured so what will be injury margin so normal selling price in India minus landed value of the imported goods whatever is the import price so that difference will be taken so whichever is lower so dumping margin is sale price in exporting country minus export price to India injury margin means normal selling price in India minus landed value that is Av plus BCD plus social Fair Sarge of imported goods sir what if the exporter is not selling in his country exporter is only exporting he's not selling in his country then what we should do so exporter is exporting he's not selling in his country see the price at which he exported to a third country not India see the price at which he exported to a third country he's only exporting from his country for example exporter is in Germany he's selling to India he's also selling to us see the price at which he's selling to us and that you take as the normal selling price in his country got it and suppose if he's not exporting to any country he's exporting only to India then in that case what we need to take as a normal selling price there will be some usual cost of production in this country plus usual profit margin Cost Plus pricing understood cost of production plus profit margin that you take as a normal selling price over there is it clear here so say this what we need to do whenever we are impor in but we don't have the information okay so somewhere you write down this sale price in exporting country and suppose if this sale price in exporting country is not available sale price not available sale price not available consider export price to export price to third country export price to Third Country are cost of production plus usual profit margin usual profit margin okay sale price not available consider export price to Third Country or cost of production plus usual profit margin anything first you need to take export price to Third Country if that is also not available then cost of production plus usual profit margin this is when whenever we don't have the sale price in the exporting country for that this special Point okay so these are all I could not give in the book book size itself you can see if I give all these things the book size will increase so that's why I'm telling some extra points you make note of that okay now because this point is tested in exam in one attempt they have tested this that's why I gave you this information see this so this question they have tested in uh November 20 attempt this is there in our Sol workbook also so but you have to open that that's why I'm showing you the question directly here meas PCB limited has imported printed circuit boots for sale in India from country X which are liable for anti-dumping Duty you are provided with the following details country X does not sell these Goods in its domestic Market however it exports the same printed circuit boards at us dollar200 to another Third Country Now that will be taken as the usual selling price in the exporters country are you understanding they're not selling there but exporting to a third country so that will be taken as the normal selling price in their country minus what is the price at which they are exporting to India directly they have not given so the printed circuit board is sold in domestic industry at 175 per piece domestic industry means in India so normal selling price in India and PCP limited has imported the printer circuit Bo at 100 per piece if they are importing at 100 means exporter is exporting at 100 correct or not so what is the export price at which they are exporting to India 100 what is the normal selling price in exporters country 200 minus what is the export price to India 100 200 minus 100 100 then what we need to compare with normal selling price in India what is the normal selling price in India 175 minus what is the landed value of the printed circuit board 100 175 minus sorry 125 landed value 125 so 175 minus 125 50 so 100 or 50 whichever is lower what is lower 50 50 into how many circuit boards 1,000 so 50 into 1,000 into 75 so 50 into 1,000 into 75 that comes to 37h 50,000 will be taken as the anti-dumping duty that much only we need to just compute The anti- Dumping Duty direct application but only thing the special point we need to remember when we don't have the price at which they are selling in their country you take the price at which they are selling to a third country so this already tested now they may ask one more question what if this is also not there but their usual cost of production plus profit margin is there that you take as the normal selling price that concept is not a tested they may Co a question on that next see the next Point investigation is investigation required or not required in case of protective Duty no because first of all they will not receive any complaint and take the action it is a suot action which is taken by the central government but in the other three cases we need to make a complaint that's why investigation required until completion of the investigation they will be leving a provisional Duty what is the period for which they will Levy if it is Safeguard Duty they will leavey it for 200 days and anti- subsid Duty 4 months anti-dumping Duty 6 months means by this time they need to complete the investigation until that point of time provisionally they can leavey some Duty what will happen upon final determination suppose the final amount is more than the provisional amount we need to pay the difference if the final amount is less than provisional amount then we will get the refund so refund allowed or differential Duty payable duration already we know exemption so we don't have exemption for productive duties but we have exemption from these three additional customs duties if it is imported by a 100% eou or a scz there are not required to pay the special additional duties that is additional customs duties Safeguard Duty or anti-dumping Duty or anti subsidy Duty not payable not payable by home come on imported by 100% eou or a unit in special economic zone however if that 100% e or unit inz is importing and then clearing it in DTA are they required to pay this yes because they are trying to circumvent that is they are trying to escape from this indirectly by importing in scz or eou so however if imported and cleared to DTA it is applicable retrospective Levy so last two that is anti- subsidy Duty and anti-dumping Duty can only be led retrospectively up to 90 days prior so today they can Levy So within 90 days prior import also they can Levy this so retrospective day is possible up to 90 days before the date of such notification now here this 5year time limit is there now so for anti- subsidy anti-dumping Duty 5 years plus 5 years after review what if 5 year over but the review was not conducted to extend it or not extended there is an automatic extension for one year if not decided whether to extend or not within the expiry of 5 years then next in case of import in large quantities what is the duty that is applicable please see the table and tell me what is the duty applicable for importing large quantities Safeguard Duty there is a alternative to safeguard Duty called as tariff quota method what is this tariff quota method it is not fair to Levy the Safeguard Duty on flat on whatever quantity that is imported once the Safeguard duty is applicable on that product concentrate once the Safeguard duty is applicable on that product if you import the product from any country you need to pay the Safeguard Duty now sir I'm not importing large quantities yes Safeguard dut is applicable on that product but I am importing only 2,000 units why should I also pay Safeguard Duty that's where they are bringing tariff rate quota Varin up to this much quantity let's say up to 10,000 units no need to pay anything beyond 10,000 units you need to pay extra 10% Beyond 20,000 units you need to pay extra 20% like that they can create a tariff rate quota method okay so that is fixing the maximum quantity of input a safeguard measure instead of Safeguard duty but if there is a tariff rate quota method all the provisions what we are learning for Safeguard Duty the same will be applicable for tariff rate quota also then anti- subsidy Duty and anti-dumping duty is mutually exclusive there cannot be both so it's like because both if Leed already we are increasing the price under anti- subsidy Duty again if anti-dumping duties levied the price will be more which is not at all acceptable see by leving these additional customs duties the price should be on par with the import price so the price should not be that is local selling price the import price should be on par with the local selling price but the import price should not be more than the local selling price if the import price is more than the local selling price it is not acceptable because other countries also will start practicing the same so our exports will get affected okay so that's why these two are mutually exclusive then some special points and above see the first one non applicability of Safeguard Duty already we know one non applicability of Safeguard Duty what is that see the table non- applicability of Safeguard Duty one one case it is not applicable Imports by 100% eou or unit in sez apart from that we have two more points where Safeguard duty is not applicable articles originating from a developing country so long as the percentage of import of that article into India does not exceed 3% of the total import into India so we are importing from one developing country or more than one developing country one developing country say we are importing from one developing country and many developed countries okay so concentrate so we are importing good say product X product X this product X we are importing from developing country developing country and developed countries developed countries say from developing country we have imported 300 metric tons and and from developed countries we have imported somewhere like 27,000 metric tons okay now what is the percentage import what is the percentage share 300 divided by 27,300 into 100 you understood percentage to total total inputs is 27,300 now what is the percentage 300 divided by 27,300 into 100 that will be 1.98% which does not exceed 3% so no Safeguard [Music] Duty even though product Tak has Safeguard duty but when you are importing from this developing country there is no Safeguard Duty because the percentage does not exceed 3% are you understanding sir what about this don't see always Safeguard Duty applicable okay always Safeguard Duty applicable why Always Safeguard Duty applicable the exemption is not for import from developed countries the exemption is only for import from developing countries okay so therefore we are importing from only one developing country and the person percentage of import from that developing country does not exceed 3% of the total Import in that case Safeguard Duty not applicable then see the next point we are importing from more than one developing country and percentage from each developing country with less than 3% group does not exceed 9% then also there is no Safeguard Duty for example same product X same product X we are importing from developing countries developing countries as well as developed countries developed countries from developed countries how much we imported say 27,000 metric ton and from developing countries say we have a b c d like that four developing countries and from a 300 metric tons and and B 2,000 metric tons C 600 metric tons D 800 metric tons now see the percentage from each developing country percentage import percentage import from each developing country so total 300 2,600 800 and 27,000 that is 30,700 so 300 divided by 30,7 00 into 100 2,000 ided 30,700 into 100 600 divided by 30,700 into 100 800 divided by 30,700 into 100 quickly do this 300 divid 30,700 into 100 that is 97% this is 2,000 divided 30,700 into 100 that will be 6 51% 600 divided by 30,700 into 100 1.95% 800 divided by 30,700 into 100 that is 2 60% now which which and all you should group a c d a c d you take okay so will there be Safeguard Duty on yes Safeguard Duty applicable why Safeguard Duty applicable so which should should Group which you should group less than 3% you should group okay but greater than or equals to 3% Safeguard Duty applicable Safeguard Duty applicable what about import from developed countries whether Safeguard Duty applicable yes Safeguard Duty always applicable now you see these three countries these three countries taken together what is these three countries taken together 97 plus 1.95 + 2.6 that is 5 52 correct country a country C country D taken together 5.52% which does not exceed 9% so Safeguard Duty applicable or not applicable Safeguard Duty not applicable so that's how whenever you get a question you need to do first you need to see what is the percentage of each country import to total and you group less than 3% together if that together does not exceed 9% no Safeguard Duty on import from those countries those grouped countries whereas 3% or more than 3% you should take out always safu Duty applicable here it is not less than or equals to 3% it is less than 3% but for the first point it is less than or equal to 3 % okay so that is this so tell me what are the two cases articles imported from a developing country a developing country does not exceed 3% of the total Imports of that article into India Import from more than one developing country with developing country less than 3% taken together does not exceed 9% of the total inputs of that article then circumvention of anti- subsidy Duty and anti-dumping duty circumvention means escaping from payment of anti- subsidy Duty or anti-dumping Duty how we will escape sometimes we will change the description of the Articles if say if anti-dumping Duty and anti- subsid is applicable on some product we will try to change the description of the product in the Bill of Entry or we will import it in unassembled or disassembled condition or we will change the country of origin for example if anti- subsidy duty is applicable for import from China but we will not import from China we will import it from Singapore so that we will try to escape from anti- subsidy Duty in that case they will not give a new notification the same notification which is already given for anti- subsid duty anti-dumping duty will be extended for you import from Singapore also will be extended for imports of unassembled Goods also will be extended for imports by changing the description also you understood read this so it's important for Theory where the central government on inquiry as it considered necessary is of the opinion that circumvention of anti- subsidy Duty or anti-dumping Duty has taken place circumvention means escaping so either of the following ways what you will do first you will change the description alter the description or you will import it in unassembled or disassembled form or you will change the country of origin or in any other manner wherein you will make ASD or add ineffective so it may extend ASD add to such other article also from such date not earlier than the date of initiation of enquiry then there is something called as absorption of anti- subsidy duty anti-dumping duty absorption is taken place whenever they reduce the export price for example exporter is selling to India in the same uh this case we will see anti-dumping duty case what is the price at which exporter is selling to India $100 and what is the uh normal selling price in his country $200 and what is the anti-dumping duty LED in this case $50 because of which what happened to the price in India what is is the import landed value what's the landed value 175 175 + 50 how much it came to 2 25 so 225 which is the normal selling price in India also correct or not again I'm repeating here what is the landed value of the goods in India 125 for that 125 for that 125 what is the anti-dumping duty in this question 50 so 125 + 50 will be 175 what is the normal selling price in India 175 means import price also equal to the normal selling price then is import there is any excitement no so people stop importing because Normal selling price is also the same now the exporter will question the Importer why are you not importing because sir normal selling price is also the same in India why should I import okay I will give you a deduction I'll give you $20 discount so I'm I'm already selling to you at 100 now I'll give you $20 discount so when I give $20 discount to you which means the landed value will be minus 20 correct 175 minus 20 155 you got it 155 but the normal selling price in India will be 175 so I will import correct or not this is called as absorption of anti-dumping Duty or anti subsidy Duty whenever government comes to know that exporter has absorbed by reducing the export support price here anti- dumping Duty will be increased by $20 understood they will not give a new notification using the same notification they will increase it by $20 means already what was the existing anti-dumping Duty $50 now they will make it as $70 means plus 20 so 175 the normal C is restored you understood so this is called as absorption so when the absorption has taken place absorption of a d d is said to have taken place is if there is a decrease in the export price of an article without any commensurate change in the cost of production of that article then when the central government as it may consider necessaries of the opinion that absorption has taken place and The anti- Dumping Duty or anti subsidy Duty became ineffective they can increase the anti-dumping duty it may modify such duty to counter the effect of such absorption from such date not earlier than the date of initiation of inquiry then old customs duty so these two concepts uh circumvention or absorption can be tested in exam as a theory part okay next old customs duties relevant in current scenario already we discussed what are the goods for which cvd is applicable cvd alcoholic liquor for human consumption petroleum products tobacco and tobacco products so sad is applicable only for petroleum products computation of customs duty already we discussed now look into one last area in this chapter that is whenever you are importing articles as set of Articles set of Articles means what that is I'm importing in a package more than one product so in that package there is more than one product now how to determine the rate of Duty so we will take the essential character that uh drawing instruments example but that is not applicable here we are not talking about one product imported we are importing multiple products as a package the geometry box example is we are importing one product that contains multiple articles one product that contains multiple components okay but here we are not importing a product with multiple components we are importing multiple products as a package like composite Supply mixed Supply in GSD we need to apply this what we need to see first you are importing as a set of Articles example remember Camera DSLR camera you are importing that tripod you are importing as a package and you are also importing one extra lens as a part of package then one SD card also you're importing as a p part of package that's what in Amazon when you try to buy something when you scroll down so frequently purchased together like that it will come now so it will only tempt you to buy other things also like that when you buy the camera you are also buying all these three things and you are importing it like a package now whether these articles are chargeable to duty at same rate or different rate you need to check so we are paying customs duty on ADM basis ADM basis means what when customs duty is payable as a percentage of value that is ADM somewhere you write down there ADM means ADM means customs duty payable as a percentage of value then it is known as ADM what is the opposite of this what is the opposite of Adam specific Duty specific Duty specific duty means customs duty payable based on units of measurement based on units of measurement so example for this ADM is is like value will be 10 lakhs on that customers Duty will be 10% that will be 1 lakh this is known as agular method okay whereas in specific Duty method what will happen is that we will not see the value so that is on cigarettes cigarettes 85 per cm is payable okay so 85 per CM we need to pay means if you are importing a cigarette with 20 cm so 20 20 cm will not be there but for example I'm telling so 20 cm means 20 cm into 85 we need to pay the customs duty irrespective of its value okay irrespective of its value when we pay customs duty based on the units of measurement that is known as specific Duty method so here the confusion will come only in case of method correct or not because if it is specific Duty method there is no confusion that article whatever rate of Duty that we will take but if it is at which is Multiplied on the value but there also if the rate is same there is no confusion all the Camera DSLR camera lens tripod everything same rate means we'll not have confusion so we will just take the rate and we will apply correct or not but when there will be confusion if it is liable to duty at different rates for example camera 12% and lens at 10% tripod at 5% like the different rates are there which rate should be taken whether the price is single or separate price is separate then also no confusion correct you'll take the respective rate for the respective value separate values can be assertain camera 30,000 so 30,000 into 10% and lens 12,000 12,000 into 12% like that respective values for respective rate chargeable to customer Duty accordingly based on the separate values what if there is a single price okay again see whether these are all compulsory accessories supplied along with the main article if yes you treat it like composite Supply means principal Supply rate you will apply on the entire Goods which means camera is the principal Supply correct so camera rate will be applicable on entire price so entire Consignment chargeable to duty at the rate applicable to main article what is the main article in our example camera that rate only we will take for all the goods if it is come on if it is compulsory accessory if it is a compulsory accessory supplied along with the main article for a single price what if it is not a compulsory accessory means you are trying to bundle it but it is not like naturally bundled you understood so it is not a compulsory accessory you are trying to add it then in that case you will treat it like a mixed Supply highest rate you will take what is the highest rate out of this you will take that so entire Consignment chargeability duty at the highest rate of such Goods okay so this is about section 19 articles liable to different rates yes okay then so we completed 12 Levy and uh 15 relevant date for determination of rate of Duty 16 relevant date for rate of Duty in case of export 14 is transaction value so whenever you come across valuation you need to write section 14 valuation chapter will be section 14 so 12 14 15 16 okay and next 19 we discuss that is this articles liable to different rates of customs duties okay so we'll take a break and then we will continue after break with warehousing Provisions baggage Provisions little interesting area we will see just to kill our sleep and then we will complete the remaining aspects procedures and other things okay fine and at what time we will meet 25 45 minutes enough now we'll meet at 25 e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e okay welcome back so there are few queries let's complete those queries and then move on Sir if foreign aircraft is foreign going but before that it goes to two or more destinations in India then how to consider the stores if it is going from India to outside India whether or not it is touching any intermediate port or airport it is still a foreign goinging Velar aircraft that is the definition so definition says if it is starting from India going to outside India in between it may go to any airport that is irrelevant still it will be considered as a foreign goinging V aircraft only for Safeguard Duty Etc should it be computed on aable value basic customs duty so social Fair Sarge plus cvd no plus cvd we will not take landed value will be always ass value basic customs duty and social welfare sub charge no doubt that's it book is amended for November 24 that's what I said whatever May 24 book the same thing can be used you don't have to buy the new book the same will be applicable for November 24 as well if the aircraft uses the same fuel for domestic flight customs duty will be payable to avoid paying customs duty aircraft will remove the foreign ATF and use the same domestic ATF correct so for example if a flight is coming from outside India to India there is some uh 20 L of fuel that is left over now on the 20 L of fuel they have to pay customers duty but that aircraft they are using it for domestic so what they will do the 20 L they will remove it from the aircraft and they will keep it in the warehouse and already they would have imported some Aviation turbine fuel regularly some import would be there that one will be used in this flight for domestic Transportation that's why every flight when it completes the international Journey so for some time the flight will be staying in the airport and thereafter at least like 1 hour one and half hour then only that flight will be used for domestic Transportation then in that one and half hour what will happen whatever the fuel that is left over in that flight will be removed and deposited in the warehouse so that they don't have to pay customs duty on the fuel left over in the tank okay so that is correct sir whether the identical goods and similar Goods should be for the same time period yes they did not specify for the same time period like same day like that they did not specify means at or about the same time at or about the same time means any nearest time can be taken maybe last one week or last one month that can also be taken why exporter computes aable value for customer Duty so could you please brief on the incentives so that incen we will come across in foreign trade policy so there we will see that would the exporter be liable to pay customs duty and claim it similar to GST exporter will be liable to pay customs duty only on certain goods and ITC concept will not be applicable there because he is paying the customs duty he's not like a importer who pay the customs duty on import here it is exporter okay so therefore there's no itz concept over there design and development license we are treated as intangibles and should be included in the value correct these are to be included in the value will engineering and design charges paid in India as a condition of sale be including able value actually related to that there is one exam question recent exam question only so we have so which says that design and development charges or engineering charges Etc undertaken elsewhere than in India only should be included but whenever these design charges are not incurred by the Importer but incurred by the exporter as a condition of sale of goods then it should be included in the value so if I show you exactly what is that you'll understand so see this I'm taking the May 24 exam suggested answer to explain that point so there is a question on valuation which is given in uh May 24 exam yes this part calculate the ass value rounded off to nearest one rupee under the Customs act with appropriate working notes from the following particulars related to import of mission by C by du industries from USA in the month of October 2023 cost of the mission at the Port of exportation what is this cost of mission at the Port of exportation mean fob price fob price is $8,200 Fright from Port of export to Port of import ,800 directly given so we are not taking any 20% and this is air fright or normal fright SE fright so we will not compare it with actual or 20% fob whichever is lower Dux Industries has paid to seller who is Du Industries importer okay du Industries is the Importer and importer had paid to the seller the cost for packing not as a condition of sale but included in the cost of machine at Point number one above so packing cost should always be included in the value and whether it is paid as a condition of sale or not paid as a condition of sale so packing cost should be included three expenses which are incurred by the Importer should be included packing cost container cost and the selling commission paid by importer these three things should always be included whether it is as a addtion of sale or not and in this case it is to be included and it is already included so should we add it again no so that's where in this if you see they have taken the fob price 8,200 and uh they did not add this charges because it's already included okay next another point if you see actual selling commission paid by du Industries to local agent of the exporter actually to local agent of exporter who should pay exporter should pay but who is paying importer is paying so that's an indirect consideration so take your calculator 8,200 plus uh that is 88,200 convert into Indian rupees what is the exchange rate 80 rupees so that is 88,200 into 80 rupees 6 lakh 56,000 6 lak 56,000 plus 6 lakh 56,000 plus local agents commission 20,000 that is 6 lak 76,000 correct and next one fright later we will add fright later we will add insurance also later we will add ship de charges is part of fright correct so whenever we are adding fright ship Dem charges also will add actually the seventh Point engineering charges paid by du Industries paid by whom du Industries to a consultancy firm in Mumbai as a condition of sale okay whether the 1 lakh 125,000 to be included or to be excluded is a confusion now I just wanted to show you so Customs valuation rules that we have so in the study material itself I'll show you rule 10 we have certain inclusions rule 10 sub rule one in that rule 10 sub rule one so see this point point B point B hope it is visible to all of you the value apportioned as appropriate of the following goods or services were supplied directly or indirectly by the buyer free of charge or at reduced cost for us in connection with production and sale of export of imported goods to the extent such value has not been included in the price actually paid or payable see the last Point engineering work development work art work design work and plans and sketches under taken elsewhere than in India and necessary for the production of imported goods so but in this question where the engineering work is carried out where the engineering work is carried out engineering charges paid by du industri so paid by importer to a consultancy firm in India so it is not sent to the exporter actually we are not referring to the correct point we are referring to point number B we are referring to point number B please listen to the point number B what it say the value apportioned as appropriate of the following goods or services were supplied directly or indirectly by buyer free of charge or at reduced cost for using connection with the production and sale of export of imported goods is the buyer in India giving this work to the exporter for us in production no this is not that because if You observe here engineering charges paid by du Industries to a consultancy firm in India as a condition of sale so many students are referring to this and they are telling that it should be included in the value but actually speaking it will come in point number e so read Point number e all the payments actually made or to be made as a condition of sale of imported goods by the buyer to seller by the buyer to seller or by the buyer to a third party party here it is buyer to a third party correct where is it given that the third party should be outside India it's not given buyer to a third party to satisfy an obligation of the seller to the extent such payments were not included in the price actually paid or payable so whenever it comes as a condition of sale we need to refer to point number e so this point is actually Point number e which means it should be included in the value or not yes it should be included in the value but I study material so and the suggested answer is contradiction so suggested answer says this 1H 125,000 should not be included they have not included this 1ak 125,000 in the answer so see this they have not included 1ak 225,000 6 lak 56,000 plus 20, 6 l76 they have not included and they are telling engineer ing chares are not include aible value as engineering work is undertaken in India you understood which point they referring to I don't know who drafted this suggest answer might be you know something they would have drunk and they would have drafted this no really here now they played with the life of the student I posted this in my YouTube also mistake in suggested answer okay now because of this point one or two marks would have been lost okay so already people are finding it difficult to clear in that if suggested answer they are preparing like this I don't know what to do I show you the proof also so why it should be included again I'm showing you the proof all other payments actually made or to be made as a condition of sale correct of imported goods by the buyer to seller in this case buyer is not paying buyer is paying it to whom third party that is also there or by buyer to a third party to s is why an obligation of the seller to the extend such payments are not included so it should be actually included but they're telling it should not be included that is the differential point then because of that the answer will be different and fright will be normal insurance will be normal ship demes charges and all we will take so we will get the ass value these also okay agreeable so one point they have missed so because there is a conflict whether it will come in B point or point because of it they have missed it's okay not necessary that people who are preparing the suggested answer need to be knowledgeable okay but you know RTP RTP one question I will show you so these people and all will not have good death I'm telling you now will not have good death definitely they will suffer all the type of diseases like AIDS something Etc whatever is there everything they will get you know because they are playing with the life of the student what should I do and the students are thinking that you know I'm teaching wrongly to them okay thank God not at any faculty other faculty who is taking indirect tax has posted video on me that tun sir so teach properly like that and all okay so P I have only this subject no other okay so I am teaching properly only maybe for you it is one of the subject for me it is the only subject okay so no other go see this question which is given in RTP huh see this paramjit limited imported a mission this is RTP November 24 question paramjit limited imported a machine from all your equipments UK the price of the machine was settled at 6,000 UK pound the machine was shipped on 110 2023 meanwhile paramjit limited renegotiated the price of the mission with Aller equipments which agrees on a reduced price of 5,000 UK pound on 1010 2023 the machine arrived in India on 1810 2023 as on 1810 2023 what is the price prevailing 5,000 so 5,000 should be taken as the fob price price other details pertaining to Mission or as under license fee that the buyer was required to pay in UK as a condition of sale was 500 UK pound should we add this or not it is also payable to the exporter so that we need to take so therefore 5,000 + 500 buying commission paid in India 20,000 will it come or not buying commission will not be included due to Deep Dro at the Port machine was not taken to the jety in the port but was unloaded at the outer Anchorage so jety means so it is a place which is far away from the port so they will construct one uh structure deep into the port they will construct one structure so there it will be anchored from there through boards only it will be coming the charges incurred for such unloading and transport of the machine from the outer Anchorage so I told you now sometime the ship cannot come outer Anchorage to the jety in barge this is only called as barge charges so small boats were 50,000 this 50,000 will come in the Fright or not yes date of presentation of Bill of Entry was 1510 and rate of exchange notified by cbic on this date was 100 rupees per pound rate of basic customs duty was 10% date of Entry inwards 1810 which should be taken as relevant date date for rate of Duty rate of Duty rate of Duty 1510 or 1810 whichever is later that is 1810 should be taken as on 1810 what is the rate 15% but for exchange rate we need to take bill of entry date what is the Bill of entry date exchange rate 100 so rate of Duty will be 15% and exchange rate will be 100 rupees per pound insurance premium details were not ass attainable compute theable value and basic customs duty payable rounded off to nearest one rupee by paramjit limited can we do this please first you take aobb price £5,000 fob 5,000 convert into Indian rupees you need some additional sheets it's okay if you want you can go to ground floor you ask the admin they will give okay so 5,000 into what is the exchange rate 100 5,000 into 100 5 lakhs 5 lakhs you take as the ass value that is FOB price fob price 5 lakhs license fee 500 into 500 into 100 that is 50,000 license fee buying commission will not come correct now if you add these two you will get the fob price as per Customs what is the fob as per customs 550,000 add fright add fright how much is the Fright how much is the Fright given in the question or not given in the question so uh 20% of fob what is FOB 550,000 into 20% how much 1 lakh 10,000 1 lakh 10,000 when you take 1 lakh 10,000 that itself includes this 50,000 also correct or not when you take 20% that is for overall fright don't add this 50,000 again you understood per fright is from the factory of the exporter till the place of import that includes all the charges when you take 20% it is equal to all the cost So 20% you are taking how much is it 20% 1 lakh 10,000 insurance how much will be the insurance 1.25% of fob what is FOB 5 lakh 50,000 into 1.25% that is 6,1 187.5 so how much it will come to C price come on do the computation 6 lakh so rounded off to 188 so CAF value or ass value will be 6 lakh 6,18 8 okay so you did 5 lh50 fob correct plus prite how much you have taken 1 lakh 1 lakh 10,000 that is 6 lakh 60,000 6 lakh 60,000 + 6,1 187.5 6 lakh 66,1 187.5 but they got 6 lakh 67.5 why uh so they are telling as fright not given in the question fright not there you understood so they are taking only 50,000 I don't know what should I do p now 50,000 should be taken correct but where is Fright in the question not there when fright is not there we need to take 20% of fob now correct or not so I did not tell that rules only says so if you see valuation study material same study material I'll show book will teach how to make rice question paper how to make chicken biryani I don't know so here if you see rule 10 sub rule 2 where are it went huh say this rule 10 subu to can you read this provisor where the cost referred to in Clause a is not ascertainable okay actually Clause a is what cost of Transport loading unloading and handling charges where the cost referred to in Clause a not attainable such cost shall be 20% of fob value of goods that's what we have taken what is the cost referred to in Clause a cost of Transport loading unloading handling charges associated with delivery of the imported goods to the place of importation and look to the explanation the cost of transport of the imported goods referred in Clause a includes includes ship demor charges light rate charges and bar charges correct when you take 20% that 20% is inclusive of light rate charges bar charges and ship demate charges so no need to add that separately is it clear so that's why we have taken so whatever answer that we did is correct only as per but what they have done is you know up to them only it's not correct so there is a mistake in RTP as well RTP November 24 there is a mistake because fright they have taken only 50,000 but when fright is notable we need to take 20% of fob that point they have missed okay maybe recently qualified CA students they would have asked them to prepare a question paper or RTP so because of that only it happened like that they should spend money they are collecting donations every 6 months in the form of exam fees so they should spend money if they spend money good people will come and set the RTP questions Etc and all so fine coming back to this some more questions in rule five computed value why aren fright charges from Factory of exporter to Port not considered so in rule five we will will not consider all those things that's what difference we are already making we are taking the price prevailing at the Importer port and we make the adjustment with respect to this then basic customs duty social such as igst applicable to Imports by 100% eou or scz no so import by 100% eou or scz is exempt from payment of customs duty that's the reason why they are not even required to pay Safeguard duty anti-dumping duty and an subsidy Duty also fine yes then now we will move on to the next area that is baggage so looking into baggage Provisions baggage refers to passengers luggage so any Goods which are imported into India we need to pay customers Duty even if it is imported in the form of baggage also we need to pay customs duty so look into page number 216 baggage provisions and we don't have any section Etc and all here but you need to just remember the rules so what are the dutyfree allowances these dutyfree allowances is given in rule three and rule four of uh baggage rules 1998 so any article which is brought into India in the form of a baggage if it is dyable article we need to pay customs duty okay if it is dyable article we need to pay customs duty we need to pay full custom duty on the duty of article no we have certain allowances after these allowances on the remaining amount we need to pay baggage duty but what are the Exempted articles we have only two Exempted articles number one used personal effects is Exempted what is Exempted here in baggage used personal effects used personal effects meaning what you can see used personal effects and travel sers irrespective of value is freely allowed which means it is exemp used personal effects means things required for satisfying daily Necessities but does not include jewelry jewelry will not come under used personal effects and it should be required for satisfying the Necessities then second laptop will not come under used personal effects why laptop will not come under used personal effects because laptop is not coming under necessity so then what will come under used personal effects dress and Footwear or valet perfume watch these will come under used personal effects that's the reason why people who are coming from abroad they will remove the tag they will remove the stickers Etc and all they will bring so they consider it under used personal effect so they will not be required to pay baggage Duty and Necessities only will come so as laptop is not a necessity it will not come under used personal effect that's the reason why for laptop there is a separate exemption that is given a person more than 18 years of age can bring one laptop so which is allowed as dutyfree so who per person more than 18 years of age they can bring a laptop one laptop is only allowed say this passenger of 18 years and above coming from anywhere one laptop computer laptop computer or notebook computer anything only one will be allowed these are the two exemptions that we have so can you tell me what is the first exemption used personal effect second exemption laptop laop for whom 18 years and above greater than or equals to 18 years and travel sers also Exempted along with used personal effects what is travel sers when you visit a particular country as a memory of visit of that country you will be purchasing something so as a memory uh yes uh this fridge magnet is also a travel sovor or something of the importance in that country will be coming under travel sovor that you can bring you don't have to pay any customs duty on that then we have allowances in that allowances the first allowance is General free allowances General free allance easily remember so first general Elance divide into two the passenger is coming from Nepal Bhutan Myanmar and if they're coming by land route there is no General free allance so General free allance for a passenger coming from which place here Nepal Bhutan Myanmar if they're coming by land route it will be nil suppose if it is coming by any other cases then it it will be 15,000 General free elevant if the passenger is coming from other countries then if the passenger is a tourist of foreign origin then it will be 15,000 all other cases it will be 50,000 can you remember this Four Points jfa divide into two passenger coming from Nepal Bhutan Myanmar again divide into two land route other cases land route will be nil other cases will be up to 15,000 whereas coming from other than Nepal bhan man again divide into two what is that tourist of foreign origin then it will be up to 15,000 all others it will be up to 50,000 and for infant passenger General free relevance is not applicable for infant passenger only used personal effects there is no General fance who is a infant passenger child not more than two years of age up to two years what general fance we can give to them so there is no General free elevant and apart from General free Elance we have jewelry element so jewelry elevant is like for male passenger 20 G with a value cap of 50,000 female passenger 40 G with a value cap of one lakh what is the meaning of that value cap that is weight and value cap for example there is a female passenger so Mrs a Mrs a bringing bringing 48 G of jewelry 48 G of jewelry with a value of with a value of 1 lakh 25,000 okay what is dyable value tell me what is dyable value after 11 how to calculate simple first we need to take total value what is the total value 1 lakh 25,000 minus allance how much will be the allance a a will be towards the weight how much weight is allowed 40 G so 1ak 125,000 divided by 48 g into 40 G is allowed how much is that 1 125,000 divided 48 into 40 how much 1H 14,167 r b value value wise how much 1 lakh whichever is lower whichever is lower so therefore how much is the 11 1 lakh so what is the dyable value dyable value will be 25,000 hope you understood how to calculate and on that the baggage Duty will be payable and what is the baggage Duty 38.5% baggage Duty so 25,000 into 38.5% that is 9,625 is the baggage Duty payable okay so first you need to take the value and the allowance allowance will be total value divided by total weight into what is the permitted weight what is the permitted weight for male passenger 20 G what is the permitted weight for the female passenger 40 G so that much value or value wise 1 lakh whichever is lower is only allowed so remaining will be the dyable value on which they need to pay baggage duty is it clear suppose if it is male passenger what we will do allance will be total value divided by total weight into 20 G and B point will be 50,000 whichever is lower is only allowed and remaining will be the dyable value on which they need to pay package Duty now my question is on this 25,000 can she claim General free allance there is a general free allance how much is the general free allance 15,000 50,000 like that it is there now can she claim General freance yes jewelry also can be claimed and after jewelary elevance for the remaining amount General free elevance also can be claimed but General free elevance is not possible in case of certain articles what are those articles for which general relance is not possible please see there total six articles for which general relevance is not possible called as annexure one articles number one Firearms number two catridges of firearms exceeding 50 means up to 50 can we claim allance yes then cigarettes exceeding 100 means up to 100 can we claim the 11 yes cigars exceeding 25 and tobacco exceeding 125 G so tell me what are the first three firearms catridges of firearms exceeding 50 cigarettes exceeding 100 cigars exceeding 25 tobacco exceeding 125 G next three alcoholic liquor in excess of 2 L means up to 2 L can we claim General filament yes and gold or silver in any form other than ornaments so other than ornaments means for ornaments can we claim general f Elance yes what is gold or silver any form other than ornaments means gold bars gold biscuits or gold coins Etc we cannot claim General filaments but for ornaments we can definitely claim jewelry we can claim then LCD LED and plasma TV also we cannot claim General filament so comparing this so now in this case for this 25,000 can Mrs y claim General fre relevance yes possible if she is coming from other than Nepal Bhutan Myanmar ENT 25,000 she can claim suppose if she's coming from Nepal Bhutan Myanmar other than land route only 15,000 can be claimed and remaining 10,000 will be dyable are you understanding this so first we saw two exemptions the two exemption is used personal effects travel sers and second exemption is laptop 18 and above and then we saw General free elevant then we saw jewelry elevant and then next Elance and Jewel General free allance is not applicable in case of annexure one articles then one more point you have see that the free elevance of one passenger cannot be pulled with the free elevance of another passenger what does it mean say Mr a and Mrs a they are going abroad each carrying one laptop and they purchase One gaming laptop for their son and that laptop is 90,000 rupees and they are not bringing any other articles both are eligible for 50,000 50,000 General fents if you accumulate 50 plus 50 one lakh and the laptop is only 90,000 rupees so can they claim the allowance no because allowance of one passenger cannot be clubbed with the allowance of another passenger which means one article will be dyable in one baggage only so therefore out of A and B anyone can keep that in their back so 50,000 will be allowed and remaining 40,000 they need to pay baggage Duty understood or not so pooling is not possible and what is the rate of Duty on baggage come on respond 38.5% however for three articles the rate of Duty will be 110% what are the three articles in general free allance not applicable annexure one we saw now in that first three articles are there now Firearms CES of firearms exceeding 50 cigarettes exceeding 100 cigarettes exceeding 25 tobac exceeding 125 for this the rate will be 110% for an exure one items 1 2 and three beyond the limits customs duty rate is 110% and next what are the entitlements to a passenger who is is transferring their residents so transferring residents means they are in abroad and please look into jewelary Elance for jewelry Elance is there any condition for jewelry Elance is there any condition yes there is a condition for jewelry Elance what is that Indian passenger who has been residing abroad for more than one year and like that for transfer of residents also under rule six we have limits what is that limit so a person has went abroad and stayed in abroad for 3 to 6 months 3 to 6 months so 6 for 60,000 you understood and 6 months to one year one for one lakh got it easily remember yeah 3 to six last number six are 60,000 then 6 months to one year last number one one lakh minimum one year in the preceding two years two lakhs and Beyond 2 years it will be 5 lakhs so tell me the limits 3 months to 6 months up to 3 months no allowance no allowance under transfer of residents this rule but the general free allowance applicable okay and then 6 months to one year one lakh one year minimum one year in the preceding two years 2 lakhs and two years or above above 2 years then it will be 5 lakhs what are the ineligible articles all anex one articles is ineligible in this case even anure two articles also ineligible that is color TV video home theater system dishwash washer refrigerator above 300 L up to 300 L can we bring yes up to 300 l means single door and Beyond 300 l means double door okay deep freezer video camera cinematograph of 35 mm and above gold or silver any form other than ornaments which is already there in anure one now I'll give you an example tell me whether they can claim this 11 under transfer of residents there is a person who went abroad he's a working he's working in a software company he went abroad for a training for 6 months and when he went abroad for training he did not carry anything with him just the rice he has carried because outside India in us and all rice is not available so he need to cook the rice and he need to eat so he took the rice and there he purchased one rice cooker one Kettle and one iron box and one sandwich maker because he need to make the food and laundry and all costly so he only should press so he purchased these four items what are four items he purchased rice cooker Kettle iron Box sandwich maker and at the time when he's returning he's bringing these articles now on these articles can he claim General free allance no General free allance is for his Necessities not household articles these are all household articles on the general fance not possible I told you General fance is only on the garments garments or watches perfumes etc for his purpose not for his hous articles but for his outso articles we can claim allance under transfer of residence now come to rule six in this rule six can he claim any allance yes or no how many months is staying means 60,000 definitely four items will not be more than 60,000 and whether these four items are mentioned in anure one and two check check is it mentioned in anure 2 anywhere no it's not mentioned which means can he claim the allowance yes so his used personal effects anyhow he can claim and normal dyable articles General relevance is there for household articles he will be able to claim under this point okay and next all other points you see all the above Provisions are equally applicable to unaccompanied baggage what is unaccompanied baggage back coming back coming before his arrival or after his arrival but what is the time limit remember a for after B for before a for after B for before alphabet a will be first number alphabet B will be second so tell me what is the time limit by which the unaccompanied baggage should come one month after arrival and two months before arrival then it is called as unaccompanied baggage is it clear all the above Provisions are equally applicable to unaccompanied baggage baggage that arrives one month after passengers arrival two months before passenger arrival so a B1 2 you remember this then for member of crew whether baggage Provisions is applicable during the time when they are in service during the time when they are in service means contract so they cannot bring 50,000 Rupees worth of Articles and all they can bring only Petty gifts up to 1,500 rupees but once they complete their contract and finally they will be coming now at that time the regular Provisions are applicable passenger carrying non-d dutiable and non- prohibited articles will walk through green chart Channel and if they are carrying any dyable or prohibited Goods they should walk through the red Channel and every passenger who is getting down has to make a true and full Declaration of what are the goods that they are bringing and that is called as baggage declaration passenger has to make true and full declaration regarding contents of the baggage suppose if he is not required to pay baggage duty is there any relief available to him yes so temporarily those dyable articles can be detained in the Customs area and again when this person is returning he can carry those goods so he's not required to pay baggage Duty on those goods that is called as temporary Detention of baggage where the baggage of the passenger contains any article which is dyable or the import of which is prohibited and in respect of which a true declaration has been made proper officer May at the request of the passenger detain such Goods for the purpose of being returned to him when it will be returned to him whenever he is leaving India suppose if he is not able to collect he can authorize any other passenger also Al to collect and go if that is also not possible he can request the officer to CER that bag in his name so through any other passenger or as Cargo consigned in his name but remember this temporary Detention of baggage is Possible only when he makes the true declaration suppose he's bringing some cocaine powder and he is walking through the green Channel officer stopped him and he's telling okay temporary detonation of baggage at the time when I am going I will take and go not applicable because he did not make any true declaration so therefore temporary Detention of baggage point will not be applicable to him is it clear so what are the customs duty rate on baggage okay so you should tell me P don't see your book you tell me for firearms what is the GFA available or not available not available rate 110% catridges of firearms up to 50 GFA available up to 50 GFA available yes rate 38.5% Beyond 50 Beyond 50 GFA available or not available not available and what is the rate 110% very good cigarettes up to 100 GFA available rate 38.5 Beyond 100 GFA not available rate will be 110% cigars up to 25 GF available yes rate 38.5% be beond 25 GFA not available 110% tobacco up to 125 G GFA available and 38.5% so wherever GFA available the rate is always 38.5% sir when GFA available why 38.5% we need to pay that is what Beyond 50,000 for example 60,000 worth of Articles means 50,000 we will claim General fance remaining 10,000 we need to pay 38.5% that is the meaning of that so tobacco Beyond 125 G GFA not available and the rate will be 110% then alcoholic liquor up to 2 L GFA available rate Beyond 2 lit GFA rate 38.5% only the rate is not 110% 38.5% then gold or silver so other than ornaments so if it is ornaments GFA available rate 38.5% other than ornaments gfn not available still the rate is 38.5% LED LCD plasma TV GFA not available rate will be clear here so this is about baggage that you need to remember and let's see one question related to this see this question number 27 Gregory Peg of foreign origin has come on travel visa to tour in India he carries with him as a part of baggage the following travel soer 85,000 what is your answer Exempted Exempted travel soer is Exempted other articles carried on in person dyable how much 1 lakh 50,000 dyable thereafter we will get the allance okay but dyable okay then 120 sticks but for this 150 can they claim General fance yes no issue 120 sticks of cigarettes of rupees 100 each 12,000 we need to divide into two 100 will be eligible for GFA 38.5% remaining 20 not eligible for GFA 110% so firearm with 100 cages value includes the value of catridges at 500 rupees per catridge so 100 into 500 is how much 50,000 100 into 500 50,000 but the value given is 1 lakh so in that 1 lakh if 50,000 is Cates what is remaining 50,000 firearm so firearm 50,000 catridges 100 but in that 50 eligible for GFA remaining 50 not eligible for GFA determine customs duty payable if the effective rate of customs duty is 38.5% inclusive of social Sarge with short explanations were required ignore agriculture infrastructure development say whether we need to pay any igst no just the 38.5% only on the top of that we don't have to pay any igst now tell me by reading this question what is the general freance that is applicable in this case what is the general fance 50 or 15 he's coming from Nepal Bhutan Myanmar or other other but he's a tourist of foreign origin as is's a tourist of foreign origin the applicable amount of General Fe allance will be up to 15,000 so now how to present this in exam first we need to prepare a table particulars particulars then eligible for GFA eligible for General free elevance not eligible for General free elevance not eligible for General free Elance in this eligible for general fance what is the rate always 38.5% not eligible for General fance divided into two rate will be 38.5% some articles are there and 11% also some articles are there okay now what is the first article that we have travel sers travel sers is Exempted so we don't have to bother about this and other articles other articles 1 lakh 50,000 but it is eligible for GFA you put it under eligible for GFA and next what we have is cigarettes cigarettes 12,000 120 sticks so cigarettes 100 sticks will come here 100 sticks into what is the price 100 that will be 10,000 eligible for GFA correct and remaining 206 where it will come 110 or 38.5 110 so 20 into 100 that equals to 2,000 understood P next next what is the next one firearm already we know the firearm value will be 50,000 where it will come not eligible for GFA 110% catridges catridges of firearm catridges of firearm 50 catridges into so 500 that will be 25,000 eligible for GFA remaining 50 catridges not eligible for GFA 25,000 now anything that is left in this question that's it so now we need to do the total of these three columns first case 1 lh50 + 10 + 25,000 that is 1 lakh 85,000 here zero whereas here 50 25 75 + 2 77,000 minus General free allance what is the general free allance only 15,000 but here we don't have any general fre Elance and is there any other allance possible jewelary allance is possible jewelary allance is possible in this case no jewel allance is only for the Indian passenger and whether transfer of residence is applicable in this case no because that is also for the Indian passenger so both are not applicable so therefore this is the allowance that we have so what is the dyable value come on here 1 lak 70,000 and here it will be 77,000 and what is the baggage Duty what is the baggage Duty 38.5% 170,000 into 38.5% 65450 and 77,000 into 110% that is 84,7 you understood don't total it just show this separately so don't total it in exam show separate baggage duty at 38.5% is 65450 at 110% is 84700 because if you see the question specifically they asked so what is the custom duty payable if the effective rate of custom duty is 38.5% so means they are asking only that 38.5% component that is 65450 so because if you see the answer for this 27th question they would have given 65,000 450 you understood that 110% they did not give but they gave it as a note what we will do we will total this and we will write because of which unnecessarily we will lose the marks for doing perfectly also sometimes they will reduce the marks okay so that's why better not to do that because a question is asking only about 38.5% rate so that only we will do is it clear then another question we will see one more more question on baggage looking to question number 31 Mrs X an Indian resident 36 year old who was on a visit to China returned after 6 months she was carrying with her the following items personal effect 75,000 what is your answer Exempted laptop computer 60,000 Exempted why 18 years and above so Exempted jewelry 25 G purchased in China 75,000 what about that whether she will get jewelary elements no because her stay in abroad is not more than one year so she will not get the jewelary Elance so General free Elance she will get yes how much General free Elance she will get 50,000 so that 75,000 will be dyable correct then music system ,000 that is also dyable but music system what if it is used what if it is used if it is used it should have come in the personal effects but if it is not given in personal effects means it's a new article is it clear sometimes they will give mobile phone personal effects mobile phone is personal effect only but separately if they have given mod does it mean it's a new mobile phone that is brought so that will become dyable article so therefore 1ak 125,000 minus what is 11s 50,000 so 1 lakh 125,000 minus 55,000 75,000 will be taken as the dyable value in this case Okay clear 75,000 into 38.5% 28875 comfortable here baggage questions mostly for four marks and all they will not complicate much they'll give it easy only but if you know these Provisions that will be sufficient okay because off late every attempt they're asking one four marks question on baggage every every attempt they are asking so therefore somewhere in question number two to question number six somewhere you will find one four marks question on baggage mostly it will be like this simple question only but little bit if they want to complicate they will make a question like this they will bring in Firearms CES of firearms Etc and all and they will make the question little complicated what will come in this second column actually not eligible for GFA but rate is 38.5% alcohol liquor in excess of 2 L then gold or silver other than ornament and LED LCD will be coming on the second column okay next look into warehousing Provisions segment 30 page 222 so there are few queries let's answer that and move on to mobile get get covered under laptops for baggage provision no mobile if it is used it will come under used personal effect but if the mobile is separately given means it is a newly imported mobile that will be dyable so laptop is different mobile is different correct or not correct or not uh yes so you should not get that doubt further how do people coming from USA manage to bring more than one iPhone for family and friends usually two phones will be permitted under used personal effects used personal effects does not mean it is like sir 10 phones sir because I'm maintaining 10 people sir so therefore 10 phones are like that you cannot tell like that okay so only one two one hand phone and one business phone that is only allow so people go there and they will buy one iPhone throw that unboxing video and all they will do there itself they will throw that box they will bring only the iPhone if they bring along with box now then it will become dyable and they need to pay because lot of people I have seen in Instagram they posted videos about iPhone 16 so in Dubai the rate is less you go to Dubai buy over there and flight cost and all also if you add still the cost of iPhone in Dubai is less then baggage Duty whose father will pay correct 38.5% we need to pay now when you are bringing it but if you are not bringing it with box just the phone if you are bringing no problem already you have one phone one more phone you are bringing no problem fine you can bring that with without box but if box you are bringing and the customs Office are catches we need to pay the baggage Duty 38.5% then for people from Nepal Bhutan and Myanmar there is no allowance under Customs am I right no there is allowance what is allowance for Nepal Bhutan Myanmar if they are coming from other than land road so how much other than land Road up to 155,000 they can bring then aidc to be shown at last after SS or with category one I told you already with category one so a agriculture infrastructure development say where it will come it will come in step one okay sir for insurance 1.25% of fob do we need any deduction like we did for fright calculation no for insurance always we will take 1.25% of fob mine is already considered in fob like that we don't have that is only for fright only for fright okay so alcoholic liquor 5 lit single bottle single bottle 5 lit hypothal actually it is no then really here 1 lit only maximum is 1 lit okay 5 lit and all we will not have bottles hypothal situation but fine so you are bringing five bottles of 5,000 rupees fully taxable or proportionate fully taxable but uh 2 lers we can claim under General Fu elevance 2 L we can claim under General Fu elevance provided that does not exceed 50,000 so beyond 50,000 we have to and remaining 3 l always we need to pay baggage duty 38.5% is 11an Center transfer of residents to India can be claimed along with GFA of 50,000 yes GFA 50,000 is independent of the other allowances you can claim all the three allowances jewelry allance also we can claim transfer of residents also we can claim and even we can also Claim about that uh General freance also okay so actually in my regular batch I did one question as you have asked me for you I will do that question so you see this that is all the allowances can be claimed by one person possible that is this question a very good question you can see hope it is visible to you if you have the resource book you can see in that page 134 volume 3 Mrs Sharma a resident of India and carrying out her profession in USA returned back to India after one year 3 months of stay and brought used personal effects including jewelry 1 lak 10, 55 G 1ak 160,000 personal and household articles including annexure 3 but excluding annexure 1 and to 225,000 other articles not falling under annexure 1 55,000 determine Duty payable by Mrs Sharma now in this case if you see first she has jewelry elements because she's staying abroad for more than one year so she is having jewelry elant how much jewelry elements 40 G subject to a value cap of 1 lakh then as she's coming from USA she is eligible for General fance and she's not a tourist of foreign origin so therefore how much will be the General fance 50,000 plus as she is going there for profession and she is bringing even household articles also so she is eligible for transfer of residents how much will be the value of transfer of residents minimum one year in the preceding two years therefore two lakhs two lakhs worth of article she can bring correct now let's segregate it into respective allowances used personal effects how much is the used personal effect alone except jewelry except jewelry 1 lakh 160 minus 1 lakh 10,000 how much so where 50,000 will come Exempted correct remaining 1ak 110,000 will come under jewelary allance Duty yes but we have jewelary elant can you calculate the jewelary element and tell me how much 1 lakh 110,000 divided by 55 g into 40 G that is 80,000 value wise 1 lak whichever is lower which is lower 80,000 so 80,000 is only allowed remaining will be dyable what is the remaining value 1 lakh 10,000 minus 80,000 30,000 understood that part then personal and household articles including annexure three but excluding annexure one and two annexure one and two will not come but remaining how much 2 lakhs because minimum one year State 2 lakhs but how much worth of article she is bringing 2 lakh 25 so 2 lakh 25 minus 2 lakh what is the dyable value 25 already 30,000 dyable jewelry plus 25,000 thereafter other articles not falling under Antion one means dyable articles how much 55 can she claim General free relevance 50,000 yes so 55,000 minus 50,000 what is the dyable value 5,000 so 55 + 5,000 that is 60,000 any other elevance left no fully exhausted so on that 60,000 she is required to pay 38.5% you understood clear here so all the three Elan is also possible then if You observe in this question what has happened is that they have given uh jewelry brought in China purchased in China like that one question is given no this one jewelry 25 G purchased in China what if the jewelry is purchased in India what if in this place it is given purchased in India what would have happened now we need to check one one more point in the question because what happens is that lot of girls in India in the name of marriage will be exported outside India correct because every father and mother wanted you know their son-in-law to be settled abroad what should we do then we are all we are all what beggars in India okay so because they want only foreign groom Indian Grooms and all Beggars are we are Beggars stupid fellows we are okay so all uh good-looking girls and all will be exported there and no marriage today situation is that all matrimonial websites is full of boys only only gender conversion we need to do then only marriage will happen for us okay so therefore these girls when they are going abroad what will happen is that they will take along with them some jewelry there and after going there because now marriage means minimum some 500 G 600 G jewelry is must and when they go there so one week they will stay hard thereafter definitely they will come because every girl is Dad's little princess how they will be able to survive so they alone so they will be coming back here when they're coming back here definitely they will bring the jewelry whatever they have taken from here clothes also they will not be bothered but jewelry definitely because that is costly so they will bring that bag full of jewelry whether baggage Duty payable on the jewelry yes provided they have not given any declaration at the time of going abroad so at the time time when they are going abroad they have to submit all this jewelry with the Customs so that the Customs will take a record of it and at the time of returning back to India if the same jewelry is brought we don't have to pay baggage Duty otherwise we need to pay the baggage Duty on the jewelry so therefore when the question says purchased in India you need to check out whether this is declared with the Customs at the time when it is taken from India you understood if it is declared with the Customs at the time when it is taken from India don't put it as dyable you make it like Exempted you got it because logic is simple those articles which are taken from India to outside India at the time when we are taking it if you give the Declaration same articles when you are bringing it you don't have to pay baggage duty but sir lot of times we go abroad we will not declare about our laptop our clothes Etc that is anyhow Exempted now that's why we will not declare so clothes will be Exempted under used personal effects laptop will be Exempted under separate points that's the reason why we will not do the Declaration otherwise all dyable articles which are taken from India because these producers and all who are going abroad for shooting purpose they carry the equipments now production equipments cameras Etc and all everything needs to be declared and when they go abroad for shooting again when they are bringing the same articles they are not required to pay baggage Duty provided the Declaration is made at the time of export okay yes so all these questions completed now come back to where ring page 222 segment 30 warehousing under Customs already we know some points that imported goods can be kept in the warehouse without payment of customs duty and all these warehouses are licensed by Customs Department what are the types of warehouses that we have we have three types of warehouses public Warehouse private warehouse and special Warehouse public Warehouse means Goods belonging to any person can be imported and kept in that warehouse that is public Warehouse private Warehouse means Goods belonging to the warehouse keeper can only be imported and kept in that warehouse that is private Warehouse whereas special Warehouse means there are some notified Goods like gold silver precious metals Etc that can be imported and kept only in the special Warehouse so these are the three warehouses public Warehouse private warehouse and special Warehouse in public wos goods belonging to any person can be deposited but in private weos only Goods belonging to the lensey that is the license holder or the warehous keeper those goods only can be deposited only notified Goods what are those notified Goods actually that is not applicable for exam you don't have to remember what are those notified Goods so but that notified Goods can only be deposited in a special Warehouse what is the difference between public private versus special Warehouse public wouse private wouse will not be under physical control of the Customs Department which means there's a record- based control so therefore they will be just asking the Vos keeper to maintain essential records as to what goods are brought and kept and whether they are filing the exbon bill of entry and then only the goods are cleared like that records based control but in case of special Warehouse as the notified goods are of precious articles and high value articles due to the reason it will be under the Customs lock and control which means that there will be a customs officer present in the special Warehouse so which is under Customs lock suppose if the warehouse license is cancelled who will be giving license to operate a warehouse Customs Department that is commissioner principal commissioner or commissioner under Customs will be giving the license sometimes when we breach the conditions of license then the license will be cancelled so whenever the warehouse license is cancelled on account of breach of conditions by the license holder whatever Goods that are already deposited in that warehouse should be transferred to another Warehouse or it should be cleared for home consumption what is the time limit within which it should be cleared within 7 days from the date on which cancellation order is served and at the time when we deposit the goods in the warehouse are we paying customs duty or we are not paying customs duty we are not paying customs duty due to that reason we need to execute a bond and the bond needs to be executed for what value three times the customs duty payable see this so warehousing bond is required for deposit which is of two types so Consignment Bond and general Bond Consignment Bond means every Consignment we will deposit and execute a bond and the bond value will be three times the Duty payable at the time of deposit whereas General Bond as specified by the officer upon execution of the bond the officer will pass a warehousing order warehousing order is for what permitting us to keep the goods in the warehouse and whenever the warehouse order is passed what is the time limit within which we can keep the goods in the warehouse for a maximum period of one year see there the time limit for warehouse warehousing period will be one year one year from the date of deposit in Warehouse or warehousing order one Year from the date of warehousing order can this one year period be reduced also yes in case of perishable Goods it may be reduced but in some cases this one year time limit is not applicable what are those goods for which this one year not applicable eou ehtp STP and Warehouse where manufacturing operations are permitted so in these warehouses there is no time limit so what are the warehouses here where in like uh time limit is not applicable eou what is the full form of OU export oriented unit ehtp electronic Hardware Technology Park STP software Technology Park then Warehouse where manufacturing operations are permitted what are the warehouses where manufacturing operations are permitted whether public Warehouse is permitted no private warehous so which means for private wos time limit not applicable invalid statement I did not tell that you don't interpret like that I did not say what I said is that private weos manufacturing operations are permitted if in private arrows manufacturing operations are permitted then there is no time limit I did not say private WS no time limit okay private warehous also time limit is there but if it is a private warehous where manufacturing operations are permitted then there is no time limit means we can keep the goods even for 5 years 10 years also got it next an interest will be payable what is the rate at which interest is payable at the rate of 15% perom from 91st day after the date of wehousing order till the date of actual clearance sir you said that we can deposit the goods in wouse for one year yes but in that one year also 90 days will be interest free period and remaining that time we need to pay the interest why should we pay the interest because you are deferring the customs duty liability when you keep the goods in warehous you are not paying customs duty now you're deferring that due to that reason you need to pay interest what is the rate of interest in case of Customs 15% perom what is the rate of interest in case of GST 18% perom don't forget this so 15% perom from 91st day after the date of osing order till the date of actual clearance and payment of customers Duty and Manufacturing and other operations are permitted in the warehouse so we can do the manufacturing operations and Duty not payable on such warehoused Goods if the processed goods are exported so listen we are importing some fabric and that fabric is kept in a warehouse from fabric we made the garments so in the process of making garments out of the fabric there will be some Wast and scrap what is the treatment of that Wast and scrap if these garments are exported if the garments are exported for example we have imported 10,000 M of cloth 10,000 M of cloth converted into garment so garment how much is converted say out of 10,000 9,800 M we converted into garment so what is the remaining 200 M waste so now the entire garments are exported the entire garments are exported so what is the cloth contained in the Garment 9,800 M should we pay customs duty on 9,800 M of cloth imported no we don't have to pay customs duty what about remaining 200 M of cloth in the form of Wast and scrap so whether we need to pay customs duty no provided that Wast and scrap is either destroy or that Wast crop is sold in India as if it is imported in that particular form please read this paragraph properly manufacturing and other operations are permitted in Vos and Duty not payable on such warehoused Goods if the processed goods are exported however customs duty payable on Wast scrap at the applicable rate to Wast and scrap arising out of manufacturer if such Wast and scrap is not destroyed within the warehouse okay so this I'll just show you one example you'll understand say this so we have imported some steel so what is the weight of the steel that is imported 100 kgs what is the rate of Duty applicable for this 100 kgs 12% using this 100 kgs of Steel we have manufactured utensils and exported what is the steel present in the utensils that is exported 96 kgs and what is the remaining 4 kgs waste and scrap and what is the rate of Duty applicable for that Wast and scrap 5% okay now what they are telling is that this 100 kgs present in 96 kgs this 96 KGS is exported so on this 96 kgs of Steel imported present in utensils are we required to pay custom duty or not required to pay custom duty not required to pay custom duty is that part clear why we are not required to pay custom duty because this is exported so we don't have to imported goods exported are imported goods only when it is cleared for home consumption we need to pay custom duty imported goods kept in the warehouse and from Warehouse it is exported why we need to pay custom duty we don't have to pay customs duty are you understanding this now what about this 4 cages it is in the form of wasand scrap this Wast and scrap you destroyed then on import of Steel which is present in this four cages are you required to pay custom duty or not required to pay custom duty not required to pay any customs duty is it clear but suppose if you have not destroyed this waste transcrip then sell in India this 4 kgs you sell in India at what rate is it at 12% or 5% 5% so customs duty payable at the rate applicable to waste G scrap that is 5% but what we imported is still rate is 12 but we are not paying 12% we are paying 5% understood the benefit that is available that point only I have just given here so read it again manufacturing and other operations are permitted in warehous and Duty not payable on such warehoused Goods if the processed goods are exported however customs duty payable on the Wast and crap at applicable rate to Wast and scrap arising out of manufacturer if Wast and scrap is not destroyed within the warehouse then in case of volatile Goods volatile Goods means what goods which are prone to evaporation so like for example I'm importing 1,000 L of whiskey in a Casp in a barrel and at the time of clear CLE from the warehouse I deposited in the warehouse because I don't want to pay the customs duty now I deposited in the warehouse at the time of clearance from the warehouse in that Barrel only 960 L are there what happened to 40 l so whether the Customs officer or warehous keeper they have drunk no it got evaporated natural loss it will get evaporated should I pay customs duty on 1,000 l or 960 L 960 lit that is this volatile Goods in case of volatile Goods custom duty not payable on the quantity lost on account of evaporation or other natural causes okay looking to the next page this is the overview so whenever the goods are imported and kept in the you know custodian's place I told you all Goods imported in the port or airport will be kept under the control of a custodian what is the period for which the imported goods will be kept under the control of custodian for a period of 30 days and from there we will be clearing the goods to warehouse for which we need to file one bill of Entry what is that bill of Entry known as Bill of entry for warehousing or into Bond bill of entry and we need to clear it with payment of Duty or without payment of Duty without payment of Duty and we also should require to execute a bond and to which Warehouse we can take either we can take it to public Warehouse or to private Warehouse or to a special Warehouse when public Warehouse so Goods belonging to any person public Warehouse Goods belonging to the license private warehouse and notified Goods belonging to any person special Warehouse what's the difference between public private and special Warehouse public private Warehouse will be under records based control but special Warehouse will be under physical control and all these warehouses are licensed by principal commissioner or commissioner then next page you see what is the period for which we keep the goods in the warehouse so in case of eou ehtp STP are private Warehouse where the manufacturing operations are permitted correct so in that case warehousing period is still cleared or consumed there is no warehousing period are we required to pay interest or not required to pay interest not required to pay interest and in case of others what is a warehousing period one year from warehousing order and what is the interest free period 90 days so from 91st day we need to pay interest at what rate 15% now what is the purpose for which we can clear the goods from the warehouse for what purpose we can clear the goods from the warehouse either for another Warehouse correct or for home consumption importer's place or for export if you're clearing it for another Warehouse are we required to pay any customs duty no because from one Warehouse to another Warehouse only we are clearing so we are not required to pay customs duty so there is no need of any bill of Entry just a transfer request to be made but already we executed Bond at the time of deposit in the first warehouse now are there again are we required to execute another Bond No all whatever bond that got executed that will be remaining in force so Bond will be retained customs duty not payable is it clear but every Warehouse whether we get one year one year one year like that no all the warehouses cumulatively put together one year then the goods can be clear to the importer's place for clearing it to the importer's place what is the Bill of Entry that is to be filed X Bond bill of entry for home consumption to be file and whether we need to pay any customs duty yes we need to pay customs duty but once we pay the custom duty Dy the bond executed shall be released and there is one important Landmark judgment casam ran case and SBC sugars case so you have to remember this case name like how that rajendra dying and printing Mills case and Sun exports case Kiran spinning Mills case and Gard silk Mill case you remember same way you need to remember this case also kesoram rayan case and SBC sugars case what does this case says as per this case Supreme Court is telling if the goods are not CLE cleed within the permissible warehousing period what is the permissible warehousing period one year or in case of perishable Goods it can be reduced for less than one year if the goods are not cleared within the permissible warehousing period on expiry of the permissible warehousing warehousing period the goods are said to be improperly cleared and on that day whatever is the rate of Duty that should only be taken but not the date when you are actually filing the expon bill of Entry again I'm repeating carefully listen goods are permitted to be deposited for 6 months 6 months over still the goods are in the warehouse and you are clearing the goods in 8th month on expir of sixth month itself the goods are said to be improperly clear and on that day whatever is the rate of Duty that only should be taken even though you file the X Bond bill of Entry at a later point of time generally for rate of Duty we need to take X Bond bill of Entry but this is like a exception to that point so kesoram ran and SBC Sugar's case goods deemed to be improperly cleared on expiry of warehousing period Then the Goods can be even exported when the imported goods are exported are we required to pay custom duty on the import no we are not required to pay any customs duty and no bill of Entry but the shipping bill needs to be filed and the bond will be retained so till the time we complete the export you understood and once the export is complete the bond will be released then what are the owners's right with respect to the warehoused goods so with respect to warehoused Goods say for example I'm the owner of the goods I kept the goods in the warehouse so I can sort the goods or I can inspect the goods or I can show the goods for sale but I should not sell got it I should not sell the goods but I can show them for sale but sir we discussed one point sale of warehoused goods under Customs that sale of warehoused goods I'm not selling the goods I'm selling the warehouse receipt documents of title I selling I'm not selling the West Goods so remember I can show them for sale but I should not not sell the goods what are the three rates that I have inspect the goods sort the goods show the goods for sale but while doing this I have to exercise proper care and caution to prevent the loss deterioration or damage why like that suppose if there is any damage that happens in the warehouse I don't have to pay full customs duty there is a abatement that is available to me so due to that reason Customs department is putting a condition on me that if the damage happens due to your negligence then we will not give you abatement you need to pay full customs duty so while doing this inspection sorting or showing them for sale I need to exercise care and caution to ensure that there is no damage or loss to the goods so this is the rights with respect to the owner of these Goods so this about warehousing Provisions here understood now mostly on warehousing Provisions we will get question on interest computation so because that 90 days interest free period is there now beyond that and connecting that with quesam ran case so they will be making one question okay so that we will see so it's there in your study material itself so looking to this question question number four this is standard question very very important question not tested in new syllabus so definitely there is a chance of asking this question vull imported certain Goods in May an into Bond bill of Entry was presented on 14th May and the goods were cleared from the port for warehousing ass value on that date was US 1 lakh so a person has imported the goods and they filed a into Bond bill of entry and what is the ass value on that particular date $1 lakh the order permitting the deposit of goods in the warehouses for 4 months is issued on 21st May what is 21st May May warehousing order warehousing order is 21st May what is the period that is permitted 4 months but usually what is the period that we have for deposit of goods in a warehouse one year so but I told you in case of perishable Goods considering the nature of the goods they may reduce a period to less than one year also so in this question they have reduced it for four months then we deposited the goods in the warehouse on the same day but did not clear the imported goods even after the warehousing period got over when the goods are that is to be cleared from the warehouse 21st September how 21st September what is the warehousing order 21st May four months so June July August September by 21st September they should have cleared the goods but they have not cleared it by 21st September so means warehousing period is expired now what does the quesam ran case says on expiry of warehousing period the goods are said to be improperly cleared and a notice was issued on under Section 72 of the Customs act demanding Duty and interest but they have not cleared now deemed to be cleared they have not actually cleared but the goods are deemed to be cleared that's why they got a notice whle cleared the goods on 14th October what is the date on which they are actually clearing 14th October compute the amount of Duty and interest payable by whle while removing the goods on the base of the following information so on 14th May 21st September 14th October we have have different exchange rates different rate of basic customs duty and integrated tax is exempt so we don't have integrated tax that is igst we don't have ignore agriculture infrastructure development say now can we do this question so kindly take your book first I need ass value what is the ass value $1 lakh but that should be converted into Indian rupees so what is the relevant exchange rate 65.2 or 65.4 or 6 .5 what is the relevant exchange rate in case of warehoused goods into Bond bill of Entry what is the date on which into Bond bill of Entry is presented 14 may as on 14 May what is the exchange rate 65.2 so that should be taken write down relevant exchange rate relevant exchange rate hyund relevant exchange rate hyund into Bond bill of Entry that is relevant exchange rate hyund into Bond of Entry that is 6520 per dollar 65.2 per dollar are you understanding this then second what is the relevant date for rate of Duty next line relevant date for rate of Duty relevant date for rate of Duty usually what is the relevant date at the time of clearance from wouse but because of quesam ran case we should take 21st September write down relevant date for rate of Duty 21st September High fund 21st September that is 10% 10% in Brackets quesam ran case usually we will take 12% at the time of actual clearance but because of quesam ran case we are taking 21st September kesoram ran case now what is the ass value in Indian rupees ass value equals to 1 lakh into 65.2 1 lakh into 65.2 65 lakh 20,000 and compute the customs duty payable basic customs duty basic customs duty 65h 20,000 into 10% 6 lakh 52,000 next line social welfare sub charge 65,00 and igst we don't have so total custom duty payable 6 lakh 52,000 into 11% that is 71,000 uh 7 lakh 17,200 correct now 7 17,200 is the total customs duty payable now we need to compute the interest now what is the period for which we need to compute the interest after 90 days so first you compute from the date date of wosing order to the date of actual clearance so write down next line number of days number of days from the warehousing order number of days from the warehousing order till actual clearance because we need to pay interest till the date we actually pay the custom duty when are we actually paying the customs duty 14th October so till 14th October number of days from warehousing order till actual clearance that is 21st May to 14th October 21st May to 14th October 2st May to 14th October how much 21st May to 14th October so in the month of May 31 minus 21 you count from 22 10 days in May correct and in June 30 days July 31 days August 31 days September 30 days October 14 days that will be 146 days right 146 days 146 days minus interest free period minus interest free period what is the interest free period 90 days balance days for which interest is payable balance days for which interest is payable 56 days therefore interest payable equals to interest is payable on what customs duty interest payable equals to interest payable equals to that's 7 lakh 17,200 into what is the rate of interest remember 15% don't get confused usually you'll take 18% because of GST impact but in customs the rate of interest will be 15% into 15% into 56 divided by 365 how much 16,5 not5 see the answer in the screen so first we have computer at 7ak 17,200 and you need to definitely write this quesam ran case Okay quesam ran case you need to apply you have to write a note related to that and thereafter you need to do the interest computation interest computation is for 56 days and the interest payable will be 1655 rounded off to nearest one rupee is it clear so that is about this wehousing question this is one important area next so we will see some mcqs also and then we'll take a break and then proceed with the other areas because I can see your face I don't want to start the new chapter so kindly look into mcqs but don't scold me P that I don't have a space here to speak anything else okay even then I'm trying trying to you know go out and come back soon because if it is a regular batch or any other batch I'll have ample time but in the given time I want to discuss many things okay so that's why all important questions also I wanted to cover that's why I could not 4 days only monotonous only but bear with me definitely in this four days you are going to complete the entire indirect access there after you can focus on other subjects little bit difficult only okay but you have to bear see this page 164 we have completed uh few chapters now in customs taxable event valuation on that we will see the mcqs just some application based questions and if there is any extra Concepts also we can discuss there is one query warehousing some 5 56 days can you explain how we got 56 days simple P from the date of warehousing order that is 21st May till 14th October actual date of clearance you need to count number of days that calculator will tell how many number of days so that number of days minus interest fre period 90 days so that's where we will get 56 days okay say this question number one in the context of Indian Customs law IC gate means what is the meaning of IC gate full form of IC gate Indian Customs electronic Gateway so option b is the answer option A was the previous answer previously it was called as Indian Customs electronic data interchange Gateway like that so I'll show you so if you see I gate full form is now so here itself they have given in the website itself because in ICI somewhere in some mcqs they have given electronic data interchange Gateway but they modified that name now now the updated name is Indian Customs electronic Gateway that is only the correct name okay so therefore option A is not the answer option b is the answer which of the following options is are are correct Indian Customs Waters extend up to 12 nautical miles 24 nautical miles so Indian Customs Waters extend beyond 200 nautical miles Indian Customs Waters include territorial Waters and extend up to 200 nautical miles which is the correct answer four so four only four will be coming under Indian Customs Waters that is only correct first one is wrong Indian Customs Waters is not up to 12 nautical miles and not 24 nautical miles Beyond 200 will not come so only up to 200 nautical miles up to 200 even territorial Waters also will be coming what is the relevant date for determining rate of Duty in case of warehoused goods before clearing for home consumption which one in bond or X bond rate of Duty warehoused Goods in bond or X Bond X Bond option b data presentation of xon Bill of Entry the relevant date for determination of rate of exchange in case of imported goods is exchange rates which which document here bill of Entry B date of presentation of Bill of Entry not date of deposit of Duty or date of examination date when Vel arrive in India neither of the this Dash entry of Union list has given the power to central government to leavey duties of Customs including export duties so we have three list under seven schedule to the Constitution Union list State list and concurrent list and Union list talks about Levy of you know taxes or duties by central government state list Levy of tax and duties by the state government concurrent list we don't have any tax related entries so these are shared powers between central government and state government customs duty is clearly levied by central government only so therefore it will be coming in the union list in the union list actually it will be coming under entry number 83 entry number 83 actually entry 82 is income tax entry 82 is income tax entry 83 is customs duty so it will be coming under entry 83 of Union list of seven scheduled to the Constitution so the answer is entry 83 then you can remember it easily Income Tax Act is 1961 entry 82 and Customs Act is 1962 next year so entry 83 okay then goods are deemed to have been imported if the vessel enters the imaginary line on the sea at the dash nautical mile when it is said to be imported 12 nautical miles then in case of goods entered for home consumption the rate of Duty and tariff valuation shall be the rate on date of presentation of Bill of Entry or either a or b whichever is later or earlier later so option C in case of vessel or aircraft it is date of arrival in case of vessel it is date of Entry inits the territorial Waters extend to dash nautical miles into the sea from the appropriate Baseline 12 nautical miles goods include stores currency package all of the above all of the above Coastal Goods means Goods other than imported goods or exported goods are both imported and exported Goods both because Coastal Goods refers to domestic goods from one port in India to another port in India dyable Goods which are chargeable to duty and on which Duty has been paid or Duty has not been paid not being paid once the duty is paid then it will be called as Duty paid Goods foreign goinging vessel which of these will come under foreign goinging vessel Navy vessel of foreign government taking part in Naval exercises yes and Naval vessel of Indian government proceeding to foreign taking part in Naval excise yes any Velar aircraft going from India to outside India whatsoever purpose it will be coming under foreign goinging Velar aircraft even foreign country vessel which is coming to India for participating in Naval excise also will come so the answer is both A and B option C which of the following is treated as import if goods are brought from oil rig and such oil rig is located where outside the territorial Waters correct because outside the territorial Waters what is the meaning of India up to 12 nautical miles if there is a oil rig outside the 12 nautical miles and from the oil R if the goods are brought into India the goods are said to be imported into India so it is not 200 nautical miles it is 12 nautical miles because the meaning of India is only 12 nautical miles territorial Waters then what is the taxable event for import but actually it should be outside the territorial Waters only okay so outside India outside territorial Waters both are correct only n sir actually both are correct only but you know here outside territorial Waters is the exact one and uh that confusion you know don't worry in exam it will not be there okay I created these options because of this I created okay human error okay but IC will not do this error then tax taxable event for import what will be taken as taxable event for import pilloff entry filed or crossing the Customs barrier a orb or none of these so taxable event is the date on which which it crosses the Customs barrier for the purpose of Customs valuation rate of exchange means the rate of exchange notified by Dash shall be taken into account cbic what is the relevant date for rate of exchange for the exported Goods rate of exchange rate of exchange shipping Bill shipping bill which section provides for rate of Duty of imported goods 15 rate of Duty is given in 15 for imported goods 16 for exported Goods what is the relevant date for rate of Duty when the bill of Entry is presented before the date of Entry inwards of the vessel which will be taken relevant date of Duty relevant date for rate of Duty date of presentation of Bill of Entry or entry in wordss whichever is later so in this case which is later read the question properly P they already presented the bill of Entry before the date of Entry Inver so which is later entry Inver so option b is the answer so but if you see here date of actual bill of Entry or date of Entry Inver a b whichever is later a b whichever is earlier so l logically speaking it should be a or b whichever is later the date on which we actually presented the bill of Entry or the date of Entry Inver whichever is later so option C is the answer but here here option b also correct option C also correct both are correct depending on the options then section Dash make makes it abundantly clear that importation or exportation of goods into or out of India is the taxable event this is section not rupees section 12 that is the base of charge Customs act 1962 extends to whole of India including Jammu and Kashmir or excluding Jammu and Kashmir including Jammu and Kashmir we don't have any excluding Jammu and Kashmir so option b because in all the other options we have excluding jamu and Kashmir Customs act 1962 not only regulates the levy and collection of Duties but also serves equally important purposes like regulation of Import and Export protection of domestic industry prevention of smuggling conservation and augmentation of Foreign Exchange so select the correct answer from the options given below all all to D are the objectives of Customs act it is section 12 of Customs act that provides duties of customs duty to be led at such rates as may be specified in which act Customs Tariff Act 1975 under the Customs act 1962 the rule making power is delegated to who will be making the rules cbic or central government or respective state government cbic and all don't have the power to make rules cbic has power to give the notifications and circulars it is the central government B export goods means Goods which are to be taken out of India to be taken out of India to a place outside India which exporter desires to take outside India none of the above so B any Goods which are to be taken out of India to a place outside India which of the following statement is correct all imported goods are dyable Goods no market price in relation to any Goods means Goods the retail price of which in the ordinary course of trade in India all dyable goods are imported goods all of the above so see because all imported goods need not be Duty able Goods but all dyable Goods will definitely be imported goods as per section 2 Clause 38 of Customs act stores means goods for use in a Velar aircraft includes Fuel and spare parts and other articles both A and B a warehouse is a designated area where the goods are allowed to be stored after landing without payment of Duty designated area where goods are allowed to be stored after payment of Duty no designate area where goods are allowed to be stored after landing without payment of Duty and certain cases after payment of proper amount of Duty no designated area where imported goods are kept if the Importer is unable to pay the proper amount of Duty imported goods are kept if the Importer is unable to pay the proper amount of Duty no no not that because it is Importer without payment of Duty goods are allowed to be stored okay so option A is the correct answer question 28 Jet Airways of India has purchased aircraft from a foreign shipping company for transportation of goods or passengers within India within India State whether such aircraft is liable to duty under Customs act so liable to Duty or not liable to duty liable to duty as aircraft is covered in the definition of goods next question 29 Mr Alex of Mumbai has imported goods from USA when the goods were on high seas he sell those goods to Mr Peter of Mumbai Mr Peter clears the goods from Custom barrier by failing into Bond bill of Entry identify the Importer in the given case so who will be called as importer Mr Peter because when whenever the goods are sold by way of transfer of documents to title I told you the one who is filing the bill of Entry will be taken as the Importer then question number 30 m Saturn limited has imported saing missiones from Japan Mr Arjun a clearing and forwarding agent who clears the goods on behalf of Saturn limited from Customs Port by filing the bill of entry for home consumption by using the import export code of measures Satan Limited identify the Importer who will be called as importer so who is the owner of the goods so measur certain limited will be taken as the owner of the goods okay so because on their behalf some other person is importing the goods but if you see whose IEC is mentioned whose import export code is mentioned s pattern limited import export code is mentioned so they are only called as the Importer okay then so see this classification of goods classification enables categorizing the goods into group subgroups in order to apply a different rate of Duty on Goods following within the same group so actually classification is not for the purpose of categorization so it is for the purpose of applying the rate of Duty so mainly to arrive which rate of Duty to be taken for the purpose only we do the classification so enables categorizing the goods into groups or subgroups in order to apply a single rate of Duty on each group or subgroup okay that is this there are d interpretation rules under the custom s fact up to rule six rule one to rule six rule 2A of interpretation rules under the Customs act states that Goods shall be classified under the heading Which is closest to the specific description no any reference to heading shall be deemed to include a reference to that article in a unfinished stage two yes so completed Goods includes incomplete or unfinished Goods which of the following example is best suitable to the specific identification rule that is prefer specific over General car without tires or without seats would still be construed as cars but not Cars without engines no that is not natural rubber would include in its mixture with synthetic or other forms of rubber no that is also not if One Import liquor gift sets that have both liquor and glasses it should be classified under the heading liquor option C specific identification rules means what prefer specific over General and minty is not separately classified but the classification should be t as the product is closest to one under the heading T mint is only flavor this is actually any reference to material includes combination of that material with the other material if compos OS it Goods cannot be classified as per rule three of interpretation rules then shall be classified on the basis of material or substance this is known as essential character rule then rule 2B of the interpretation rule states that any reference in a heading to a material or substance shall be deemed to include reference to the mixture combination of that material with other material you are required to state which of the following example of this rule read that and tell me any reference to material includes combination of that material with the other material already I gave you this natural rubber would include its mixture with synthetic or other forms of rubber correct scooter without tires is classified as scooter no minty is not separately classified but classified should be t as the product is closest to the one under the heading T so all of the above so option A is the answer for this DH states that the goods which cannot be classified in accordance with rule one two or three shall be classified under the heading which includes Goods that are most similar what is that rule known as Akin rule which of the following is covered under rule three of interpretation rule so the latter the better essential character all these three actually in rule three only everything is there 3 a 3 B 3 C okay okay under the Customs law electric shaving Mission this example I discussed is classifiable under the following Shavers and hair clippers with self-contained motor or electromechanical domestic appliance which heading it will come 85 one0 which of the following statements are correct as per general rules for the interpretation of import tariff a durable wooden case especially shaped to contain a musical instrument and presented with the same shall follow the classification of such musical instrument true packing materials presented with the goods therein shall be classified with the goods if they are of a Kind normally used for packing such Goods provided such packing materials are clearly suitable for repetitive use repetitive use means it will not be classified with the goods so therefore it is false repetitive packing means separately we will classify The Heading which provides a more spef spefic description shall be preferred to The Heading providing General description true so one and three option a fine we'll take a break and then we will continue with exemptions under customs and procedures under Customs okay fine e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e I see this small change in the answer for McQ this question number four actually D is the correct answer I'll tell you why because they are asking prefer specific over General if you see option see liquor gift set that have both liquor and glasses it should be classified under the head liquor which means any reference to an article includes combination of that article with other article so so therefore this will not come under specific over General but this mint te will come under specific over General so because mintty you know is classifiable Under The Heading T itself so because you know mint is only a flavor option D so option A is actually any reference to complete Goods includes incomplete Goods option b is any reference to material includes combination of that material with other even option C also any reference to material includes combination of that material with other so option D is the correct answer for this okay because if this is actually not correct then next one also will be changing because minty will be coming under any reference to material includes combination of other material then both option A and C will be correct so actually option A only for question number six and for question number four it is option D then one question you asked so what is that question ma out of Customs control question number 14 huh question number 14 why W It Be A or B because Bill of Entry filed under 46 means bill of entry for home consumption and 68 means into Bond bill of Entry when you file into Bond bill of Entry still the goods are under the Customs control so therefore for a will not come only B crossing the Customs barrier so suppose if it is given as Bill of Entry under Section 46 but not 68 then A or B will be the correct answer but 68 means still the goods are under Customs control so that is warehoused Goods so that's why B is the correct answer in this case fine now look into segment 24 page 187 exemptions under customs as per section 25 central government by way of notification official G from time to time can give exemption from payment of customs duty so power to Grant exemption is with the central government as per section 25 then we have four sections which deals with the exemptions section 13 22 23 subsection 1 and 23 subsection 2 look into section 13 what does section 13 says read it column wise read it column wise see the table below that chart section 13 says no Duty on pilfered Goods what is the meaning of pilferage petty theft so when the section 13 is applicable in case when the goods are stolen so petty theft so goods are pilfered and what is the benefit whether we need to pay custom duty or no need to pay custom duty no need to pay custom duty for example your import importing th000 pieces of iPhone 16 in a box and that box is imported and kept in the airport and when you have kept it in the airport so like you have to keep it in the custodian Place till you file the bill of entry and what happened someone over there has you know removed three pieces of iPhone from that box three pieces itself is a big value now somewhere like 1 lh50 1 lh50 into 3 means 4 lakh 50,000 Rupees whether we need to pay customs duty on that 450 or no need to pay customs duty on that no need to pay but sir what about value of the goods fine customs duty only need to pay but what about the value of the goods insurance company is there they will take care okay but who will pay custom duty on these three pieces of iPhone which is missing custodian will pay okay and what if the goods are restored what if the goods are restored then we need to pay the customer Duty and what whatever custodian has already paid it will be refunded to him so see that point benefit customs duty not payable by importer but payable by the custodian and remarks if the goods are restored then customs duty is payable by the Importer whether this section 13 is applicable in case of warehoused goods no means when the pill for should have happened before order for home consumption or warehousing that is as soon as the goods are unloaded in the port or airport we will be filing either bill of entry for home consumption or Bill of entry for warehousing then they will pass order for clearance now before that order for clearance if the goods are pfer then section 13 will be applicable is it clear so if the goods are deposited in the warehouse whether section 13 is applicable not applicable that is about this then look into section 22 section 22 talks about abatement so what is abatement means rather than paying the full customs duty we need to pay the reduced customs duty that is known as abatement when is it applicable in case of damage or deterioration of the goods what is the meaning of damage versus deterioration damage means physical damage but is a product working or not working working but it is not working as original or as specified but it is functioning but there is a damage to that so means there is a reduction in the utility value but there is no reduction in the you know like functioning I mean I mean it's not destroyed it is damaged for example mobile you dropped at the ground so glass broken screen broken but will it function or not yes so will you replace the screen no you'll not replace the screen because I know that half of your mobiles are broken screen is broken but still you will be using using because ultimately what you need is it functioning or not functioning if it is functioning it is okay you got it so that is what damage is what if it is not at all working then it will be called as destruction if it is destruction it should not come in 22 it should be coming under 23 subsection one see there if the goods are destroyed it should come under 23 subsection one if the goods are damaged it should be section 22 what is DET duration dation means reduction in quality is known as dation not quantity reduction in quality okay then what is the benefit in case of abatement custom duty payable or not payable payable but at discount in proportion to the value of damaged goods for example if the value of the goods before damage value of goods if the value of goods before damage before damage is somewhere like 8 lakh 40,000 this is the value of goods before damage and customs duty payable on above customs duty payable on above is 2 lakh 81,000 now what is the value of goods what is the value of goods after damage what is the value of goods after damage value of goods after damage is 450,000 then what will be the customs duty payable how will you calculate simple cross multiplication for 8 lakh 40,000 we are paying 281,000 then for 450,000 what will be the customs duty payable cross multiplication you will do that is 450,000 into 281,000 divided by 840,000 that comes to 4 lh50 divided by 840,000 into 281,000 1H 50,53 is the customs duty payable correct therefore what is the abatement instead of paying 281,000 I am paying only 1ak 56 50536 therefore abatement will be 281,000 minus 150,00 536 so 281,000 minus this abatement will be 1 lakh 3,464 be careful when they're asking about how much is a custom duty payable 150 536 is the answer when they're asking what is the abatement 13,46 is the answer they will give both in the options they will give 1 15, 536 also they will give 13, 464 also and when you you do you will get 1 lh50 536 you will think wow my answer is correct and you will select but the question there is what is the abatement so the abatement will be 13,44 okay then see generally if you see normal exams and all they will give the question paper to test your knowledge but ICA will set the question paper that you know you should fail there is a difference actually okay so due to that reason only you know all these things matters otherwise normal question paper they will just test your knowledge so for testing the knowledge there won't be any problem but ICI will question prepare the question paper like traps like Padua they will create okay and everyone is not Arjuna to break the Padua and come out we are all like abiman we will get struck there and we will not be able to come out okay so say this customs duty payable value after damage into original customs duty divided by value before damage whether applicable in case of warehoused goods yes abatement is applicable in case of warehoused goods that is the reason why in warehousing we have that point owner of warehoused goods can sort the goods can inspect the goods and can show them for sale but needs to exercise care and caution because if the goods are damaged at that stage there is a loss of Revenue to the government due to that reason so damage yes even in case of Warehouse Goods it is applicable but deterioration no at which stage the deterioration should have happened only before unloading of goods if the deterioration happens in Warehouse we will not get any benefit next looking into 23 subsection one what does 23 subsection one says remission of Duty remission of Duty means first you pay the duty prove that the goods are lost destroyed or abandoned and how much Duty you PID that much you will get as a refund so but when the benefit is available if the goods are lost destroyed are abandoned benefit pay the customs duty prove the officer that the goods are destroyed and you will get the refund and whether applicable in case of warehoused goods yes so therefore these two sections that is section 22 abatement and 23 subsection one remission of Duty is applicable in case of warehoused goods whereas 23 subsection 2 relinquishment of title to the goods relinquishment of title means what leaving the title giving away the title so are you required to pay custom duty or no need to pay cust Duty when you don't have the title why you need to pay the customer Duty you are not the owner of the goods so you are relieving the titles okay so relinquishment of title to the goods when applicable suppose if the imported goods are not according to the specification okay it is like you know you ordered something and the product what you have ordered versus what was delivered is completely different now will you take the delivery of the product no you will not take delivery of the product you will relinquish the title but remember you will be able to relinquish the title before the order for clearance means before you file the bill of Entry you need to ask for examination of the goods when you ask for examination of the goods they will allow you to examine the goods at the time itself you will come to know whether the goods are according to the specifications or not if the goods are not according to the specification you will relinquish the title means the relinquishment of title should have happened when again before order for clearance before order for clearance only means in case of Warehouse Goods can be relinquish the title under this section no but we can relinquish the title in case of Warehouse Goods under a different section that is provisor to section 6 eight we will see that also but look into this first relinquishment of title to Goods goods are not conforming to the specification benefit custom duty payable or not payable not payable but remember relinquishment is not possible in case of prohibited Goods you are importing some prohibited Goods okay like drugs or gold Etc like that you have imported and when you imported Customs Department see you imported cocaine and you are mentioning it as that you have have imported some MAA powder like that you have mentioned but Customs officer has because boat will be in white color only and the Customs officer identified that this is not maida Idiot this is cocaine then you said okay sir relinquishment of title goods are not according to the specification I imported maida sir how would I know that it is cocaine so relinquishment of title not possible because once it is prohibited Goods you cannot relinquish the title you have to face the consequences then whether applicable in case of warehous Goods no but relinquishment is possible under provisor to section 68 in case of warehous goods we have a different place where we will get the relinquishment of title we have three places where we come across relinquishment of title in customs one is under section 23 subsection 2 another is under provisor to section 68 yet another place is under Section 26 A that is in case of refund okay so that also I will see like I will show you so that we can connect all these three points you can see the refunds chapter in that refunds chapter refund under Customs you can take Section 26a page number 225 page 225 you can see refund under custom section 26a you have imported the goods that imported goods are not conforming to the specification or defect so what you can do is that you can abandon means you can relinquish the title here also you can relinquish the title but this is when here you have cleared the goods from the Customs means you have paid the customs duty and you clear the goods from the customs and thereafter you want to relinquish the title you can do it under Section 26a so but what is the differences between these three kindly write down somewhere in the next page in the refunds chapter itself next page you have some space there itself you can write down so we have relinquishment of title so relinquishment of title is possible in three places first what happens is that goods are unloaded Goods unloaded where goods are unloaded in port or airport after the goods are unloaded in port or airport then the goods will be cleared for either home consumption or for warehouse and we they will be passing a warehousing order okay so order for clearance order for clearance after order for clearance the goods will be deposited in Warehouse deposit in Warehouse after the goods are deposited in the warehouse we can clear the goods from the warehouse upon payment of customs duty clearance upon payment of customs duty clearance upon payment of customs duty now at which stage the relinquishment should have happened or that which stage you came to know say this if before the order for clearance if before the order for clearance you came to know that the goods are not according to the specifications then you you will go for section 23 subsection 2 suppose if you came to know when the goods are deposited in the warehouse that is before clearance upon payment of customer duty at this stage if you know that the goods are not according to the specifications then also you can relinquish the title after you clearance the goods from the warehouse upon payment of custom duty if you know that goods are not according to the specification then also you can claim the lishment of title okay so first we will see this stage you have written this so goods are unloaded in the port or airport thereafter order for clearance and thereafter deposit in the wouse thereafter cleared upon payment of customs duty now at this stage goods are not according to specifications goods are not according to specifications goods are not according to specifications then relinquishment of title under Section relinquishment of title under section 23 subsection 2 so suppose if you came to know that the goods are not according to specifications when the goods are deposit deposited in Warehouse during that stage goods are not according to specifications because you can check any place now goods are not according to specifications then also you can do relinquishment of title but it is in a different section relinquishment of title under Section 68 that is warehousing procedures suppose at a later point of time you have cleared upon payment of customs duty clearance upon payment of customs duty at this stage that is after clearance you came to know that Goods are not according to specifications not according to specifications then also you can do relinquishment of title but this is under Section 26a relinquishment of title under Section 26a so now at which stage we understood in the first case are we required to pay customs duty or not required to pay customs duty customs duty not payable but in the second case customs duty payable or not payable not payable why customs duty not payable because you are relinquishing the title at this stage and whereas in the third case already you paid the customs duty correct and therefore you will get the refund refund of refund of customs duty paid on import refund of customs duty paid on import that's the difference between this three so therefore we get the relinquishment of title in all the three places either before order for clearance or after order for clearance and before clearance from the warehouse or after clearance from the warehouse upon payment of custom duty then also inment of title is possible okay now go back to exemptions so we completed all these four sections and at which stage which benefit will be applicable so look into this chart goods are lost in transit first of all is there a levy no there is no Levy consequently whether custom duty payable or not payable not payable because first of all there is no Levy now so where from we need to pay customs duty we are not required to pay any customs duty there is no Levy under section 12 consequently customs duty not payable as per Supreme Court decision in the present case what is that Supreme Court decision sir that is mangure refineries case Mangalore refineries case so in Mangalore refineries case Supreme Court is telling that first of all when the goods are lost in the transit we don't have Levy so payment of custom duty shall not arise once the goods are unloaded thereafter order for clearance either clearance for home consumption or clearance for warehousing thereafter clearance from Warehouse for home consumption before order for clearance so if the goods are pilfered you will get benefit under 13 if the goods are not according to the specifications means owner do not want to take delivery of the goods relinquishment of title now tell me before this stage whether section 22 as well as 23 subsection 2 is also applicable yes that is both 22 abatement also remission of Duty also is applicable so just write down not both even even benefit under Section even benefit under Section 22 or 23 subsection 1 available at this stage available at this stage suppose at this stage if the goods are damaged we will get abatement or not yes suppose at this stage if the goods are destroyed whether we get the remission of Duty or not yes so all four sections are applicable before order for clearance once the order for clearance is made thereafter before actual clearance only two sections are applicable what are those two sections remission of Duty under 21 and abatement of Duty under Section 22 that's what I told you warehous Goods which two sections are applicable so 23 subsection 1 and 22 are you understanding this then looking to section 21 section 21 talks about deric jet samam float Sam derik refers to the ship which got derailed in the sea with the no hope of recovery and Jetsam refers to Goods which are thrown into the sea in order to save the ship from sinking and floats refers to those goods which are thrown into the sea will continue to float that is known as float Sam all these Goods may be brought into India by any person like fisherman and all will be bringing these Goods to India and they need to pay customs duty as if these goods are brought into India and that is imported into India unless these goods are Exempted that is what section 21 says all Goods derik Jetsam fluts Sam and brick brought or coming into India shall be dealt with as if they were imported into India unless Pro to the satisfaction of the officer that they are entitled to be admitted dutyfree unless they are Exempted we need to pay customs duty on those goods okay then re-importation of goods this is given in section 20 what does this says there are two notifications under the section 20 notification 45 2017 and notification 60 2018 first what does notification 45 2017 says first person is importing the goods after importing The Goods the goods are exported and thereafter it is reimported are you understanding what is happening first we are importing then we are exporting and thereafter we are making reimport at the time of import already we paid the customs duty and at the time of export we claimed some incentive so when we claim the incentive at the time of reimport no need to pay full customs duty whatever incentive we claimed at the time of export that much incentive we need to pay what incentive we will claim in case of GST also we will claim some incentives now we will export the goods upon payment of igst that igst paid we will get as a refund or under due Duty drawback there is a concept of Duty drawback that imported goods when you are exporting you will claim Duty drawback again on reimport whatever benefit you have claimed that you need to pay so that is this and suppose if it is exported imported goods which are exported for carrying out repairs outside India then upon reimport of these goods for example you imported a car at the time of import of car already you paid the customer Duty now that car is exported for what purpose for carrying out the repairs outside India again that car is reimported now you don't have to pay again customs duty on the car because already you paid the customs duty now you need to pay customs duty on fair value of repairs plus fright and insurance both ways that should be taken as a value Fair cost of repairs including material and labor fright Insurance both ways provided the exported goods are reimported within the time limit what is the time limit 3 years plus it can be extended for a f another period of 2 years and whatever you have exported the same good should be reimported see this even igst is payable on fair value of repairs including materal and labor plus fright and insurance both ways suppose at the time of export if you are paying some export Duty so you imported and at the time of export you pay the export Duty upon reimport whatever export Duty you have paid that you will get as a refund if export is subject to export Duty then upon re-importation refund of customs duty paid on export can be claimed in terms of section 26a again I'm repeating first you have imported you paid customs duty now you are exporting at the time of export you paid some customs duty the same goods are coming back to India now so whatever customs duty you paid at the time of export you will get it as a refund in addition to this incentive on reimport actually what is the incentive here what is the incentive here generally when you are reimporting you need to pay customs duty as if the goods are imported into India for the first time time but we got a incentive here what is that incentive or benefit you don't have to pay full customs duty at the time of export whatever benefit you claim that much you pay that is sufficient or you pay customs duty only on fair value of repairs plus Frid Insurance both ways that is the concession we are getting in this case then if goods are exported under Duty exemption scheme that is Advan authorization dfia epcg scheme then upon re-importation IGS compensation says if applicable payable at the payable and time limit of repport is one year plus one year so what is this at the time of export if you have got any incentive what is that incentive under Duty exemption scheme that is Advance authorization or duty-free import authorization or epcg scheme under foreign trade policy what is AA refers to advanc authorization that is if you have advanced authorization you can import the goods without payment of customs duty or you can locally procure the goods without payment of GST and DF effers to dutyfree import authorization same so if you have AA or dfia these are two incentives under foreign trade policy if you have this license what you can do you can import the goods without payment of Duty or you can locally procure without payment of any GST epcg is also same AA and dfia is for raw material and epcg is for capital goods then upon re-importation igst and compensations say if applicable payable and the time limit for repport is 1 year plus one year actually in this place we have an amendment okay so see this I told you we have very few amendments related to customs and GST for November 24 exams so look into this for it is not loading here fine so let it be actually this point is now omitted this is not there so for November 24 exam they have removed this point so previously we had this igst and GST compensation s is payable and the time limit for re-importation is 1 year plus one year so this is now removed you can remove this point this is not applicable at present so this provision anyhow you did not listen to this provision when I was discussing so that is not applicable okay omitted this is omitted at present then looking to the next one if Goods exported are not subject to any incentive or exemption and not exported for repairs okay sir I am importing I'm exporting I'm not getting any incentive at the time of export neither I'm exporting for repairs at the time of reimport should I pay any customs duty no you are not required to pay any customs duty at the time of reimport and exported and imported goods must be same and the ownership should not have been changed and Concession under this notification is not applicable to 100% eou Unit in ftz or public or private Warehouse or Tobacco on petroleum products so these are the cases where because anyhow 100% eou import we don't have to pay customs duty unit in ftz also we don't have have to pay customs duty when the goods are deposited in Warehouse we don't have to pay customs duty so that's why these concessions are not applicable because full customs duty we don't have to pay in case of goods taken outside India for exhibition upon bringing it back within 6 months from the date of export customs duty not payable that is usually when the goods are taken outside India for exhibition so first of all it is not export why it is not export because the goods are temporarily taken outside India and due to the reason if it is again brought back to India we don't have to pay any customs duty in that case so these are all the benefits that we have with respect to re-importation how this will be tested in exam so we will be having a question related to this [Music] so so I'll show you these amendments so they have given one statutory update for November 24 almost all amendments of May 24 only they have repeated they have not added anything new bearing except for one or two points so see this here in case reference of the chapter FTP amended in case of concession that one year plus one year under the incentives and all I told you now so that is not applicable so therefore you don't have to bother about that and uh remaining wherever that point points come I'll explain there next so we will see one question related to this reimport for repairs Etc so this is one past exam question PA yes have a look into this question K Corp question number nine it's an RTP May 20 question and thereafter they have not asked this kkan Corp has imported a mission from USA for rupes 365 lakhs on payment of appropriate customs duty in February however in July the mission has to be sent back to the supplier for repair this is the notification which we we have just now seen notification 45 2017 that is first we have imported the goods after importing The Goods the goods are exported for the purpose of repairs and again we are reimporting the goods then what is the custom duty that we need to pay so from the factory of Ken Corp the machine was repaired and thereafter reimported by Ken Corp in the November next year what is the time limit within which the exported Goods should be reimported 3 years and it can be extended for a further period of 2 years years so 3 years plus 2 years is the time limit fulfilled yes then the supplier has agreed to provide discount of 60% of the fair cost of repairs resulting in conar paying US dollar 12,000 following further particulars are available B of Entry arrival of aircraft you tell me how much should be taken as the fair value of repairs can 12,000 be taken as the fair value of repairs no 12,000 cannot be taken as the fair value of repairs because 12,000 is after a discount of 60% so we need to take the fair value of repairs so means this 12,000 is actually 40% so 12,000 divided by4 so therefore fair value of repairs will be $30,000 following further particulars are available so particulars bill of Entry arrival of the aircraft so which should be taken as relevant date for determination of rate of Duty bill of entry date or arrival of the aircraft whichever is later which is later here 26th February is the later date on the date whatever rate is there that should be taken and exchange rate should be taken on the date of Bill of Entry that is 62 rupees per dollar should be taken and igst will be 12% and they have given fright and insurance outward as well as inward so first we need to take fair value of repairs what is the fair value of repairs $30,000 so 12,000 divided by4 12,000 divided by4 that is $30,000 multiply with 62 so 30,000 into 62 that will come to 18h 60,000 plus fright and insurance both ways add these two so 1860 + 23,000 + 93,500 + 27,000 + 1 lakh 21 lakh 10,000 that will be taken as the value on which we the igst we need to take 12% so ass Value 211,000 Plus 36,500 + 31650 2 lakh uh 2458 150 into 12% that is 2ak 94978 if you total this that is a total custom duty payable plus we need to write the conditions what are the conditions the time limit for re importation is 3 years and the exported goods and imported goods must be same and ownership of the good should not have been changed so that is about this notification how it will be tested in exam okay that is notification 45 2017 hope you understood then notification 60 2018 what does it says it is actually reverse there first we have imported here first we are exporting so these exported goods are imported thereafter it is re-exported now on this import we don't have to pay customs duty generally on import we need to pay custom duty but in this case on import we don't have to pay customs duty but for what purpose the exported goods are imported either for doing reprocessing refining or remaking repairs are reconditioning if it is imported for repairs or reconditioning what is the time limit within which it should be brought to India if it is notified Goods 7 years other Goods it will be 3 years and if it is from Nepal and Bhutan whether notified Goods or other Goods the time limit will be 10 years and if it is for reprocessing refining or remaking we don't have that much time limit it is just the one year what is the difference between reprocessing refining remaking versus repair and reconditioning repair and reconditioning is depending upon the usage it is not manufacturing defect so depending upon the usage the defect will arise whereas reprocessing refining remaking is with respect to manufacturing defects so manufacturing defects immediately we will know that's the reason why the time limit is only one year but in case of repairs the time limit is 7 years 3 years and 10 years within that time limit the goods should be imported and we don't have to pay customs duty but what we need to do with the goods we need to complete this processing refining or repairs and we need to export it back what is the time limit within which it should be exported back 6 months plus it can be extended for a further period of 6 months and new Goods should not be exported the same Goods what we have imported that should be exported imported goods and reexport goods should be same and importer at the time of importation executes a bond and suppose if export to import if there is any process loss import to reexport if there is any process loss it's okay that will be permitted that is this if any loss of imported goods is noticed during the operation such loss shall be Exempted from whole of the customer duties then section 21 already we saw section 24 refers to denaturing and mutilation of goods in denaturing and mutilation of goods what will happen so first we have imported the goods which has twin purposes depending upon the purpose we need to pay the customer Duty now we will denature the goods and make it unfit for other purpose so therefore we will pay customs duty for the purpose for which we have imported for example so ethil alcohol ethil alcohol if used in industry we need to pay 20% basic customs duty if not used in industry for medicinal preparations if it is used then we need to pay a customs duty of you know 5% like that we have to Industrial purpose 20% medicinal purpose it will be 5% but we are importing for medicinal purpose means we should make it unfit for industrial purpose accordingly we will pay only 5% that is known as denaturing the goods mutilation of the goods means when we are importing a missionary that missionary we have to pay 20% but parts of that missionary only 5% then in that case you can make it like parts of the mission and the remaining parts like a body of the machion you can break it and just the parts of the machine you can clear so that you will pay only 5% that is known as mutilation of goods so owner of the goods will be permitted to make a request for d in diluting the chemicals and mutilation that is breaking missionary central government may make rules in this regard and duty is payable as if the goods are imported in the denatured or mutilated form so we don't have to pay the customs duty in the original form in which it is imported on the denatured or mutilated form only we pay the customs duty so these are the various sections that we have related to exemptions so what we saw is 13 21 20 22 23 and 24 okay all the section references in customs I have given at the End of This Book itself so section reference under Customs you can see so that these sections you will be able to remember so we have whatever sections that I have not given which means it is not there in the syllabus so whatever page number references I have given which means these are all there in the syllabus so section 12 which talks about Levy section 13 pil forage section 14 valuation section 15 relevant date in case of import section 16 relevant date in case of export and then we have seen section 19 so different articles and section 20 re-importation section 21 deric jet samam section 22 abatement 23 remission of Duty and section 24 denaturing or mutilation of goods 25 power to Grant exemption from Duty okay so these are the sections mean exemptions that we have seen so therefore whenever you have time you just quickly go through these sections as to which section deals with what because in exam when you are presenting the answer when you write the answer along with the section numbers you will definitely get good marks okay mainly for that reason okay so because see at final level they expect you to have the command over the section numbers people will say lot of fa faules will be telling writing section numbers and all is not important you have to write the provision yes that is correct they are right but if you write the section numbers that will create a very good impression not that they are going to deduct marks because you have not written the section number but by writing the section number you are proving that you are a pro in the subject okay even though you are not but they don't know now the reality what they know is that they see your answer sheet and they will judge you based on the answer answer sheet that's why your answer sheet should be perfect then we will look into procedures in that procedures there is an important area that is assessment and audit under customs look into page number 212 looking to page number 212 assessment and audit under customs in that we have two section section 17 which talks about self assessment section 18 which talks about provisional assessment section 17 says that every importer will be filing bill of entry and every exporter will be filing a shipping bill in that bill of entry and shipping bill they will compute how much customs duty they need to pay and they need to file that bill of Entry or shipping bill with the Customs officer so see the first point duty to be self assessed by the import or exporter every importer so who is filing bill of entry and exporter who is filing shipping Bill or Bill of export shall self assess how much Duty they need to pay and once the bill of Entry or shipping bill is filed with the Customs portal what is the Customs portal called as IC gate and right now we have faceless assessment under Customs faceless assessment means whenever we file the bill of Entry not necessar it will go to our jurisdictional officer it may go to to any officer because that's how right now the faceless assessment is being operated so in faceless assessment under Customs what will happen an importer will file a bill of entry with the IC gate when he files a bill of entry with IC gate it will go to risk management system in risk management system we have officers in many jurisdictions now whichever officer is available at that particular point of time it will allocate the bill of Entry to that officer that officer need not be our jurisdictional officer and once it is allocated to that officer that officer will verify this bill of entry and will be uploading the details in the portal thereafter we get the electronic clearance to Bill of Entry upon payment of custom duty sometimes during this verification if they find that whatever details that we have submitted is not correct the value that we have quoted is not correct or the custom duty computation we made is not correct they will reject the bill of entry and we need to rectify that and again we need to file the bill of Entry so basically this is how it will work so Bill of Entry that is identified for scrutiny is assessed to an assing officer who is physically located in a custom station which is not the port of import in the Customs automated system it separates what assessment process from the physical location of the port of import using a technology platform from importer perspective there is no change in the process of filing bill of Entry so as soon as the bill of Entry or shipping bill is filed what Customs off user will do come on respond he will take up the bill for verification so that is the second step in self assessment the first step will be importer filing bill of Entry or exporter filing shipping Bill or Bill of export and step number two that bill of Entry or shipping bill will be taken up for verification by the proper officer whether all the bill of entries will be taken up for verification no selected bill of entries which requires verification based on risk parameter basis they will have some risk parameters like that import might have committed a fraud in the past or maybe huge UTS he is making in the short span of time like that many parameters are there based on the parameters they will be selected so few bill of entries are shipping bills selected on risk parameter basis it is like scrutiny assessment and once they take this return like Bill of entries or shipping bills if everything is perfect okay self assessment is completed if it is not perfect so then they will re reassess the customs duty payable so how they will reassess the custom duty payable as per rule four identical Goods or rule five similar Goods or in case of deductive value or computed value they will compute how much custom duty we need to pay that is known as reassessment of Duty by proper officer if self assessment is not done correctly thereafter importer has two options he may agree and pay the reassessed customers duty pay by amending the bill of Entry or shipping bill or he will request for the speaking order so that is he will ask the officer to pass the assessment order and he want to contest that assessment order so he will go for appeal So speaking order for reassessment to be passed unless importer agrees with the reassessment within 15 days from the date of reassessment of the Bill of Entry or shipping Bill what importer or exporter will do with this reassessment order they will go for appeal because they are not satisfied with the reassessment which is done by the officer this is about self assessment mostly it will be a theory question if at all you get a question in assessment and audit you will get two types of question one is a theory question on self assessment another one will be computation of interest in case of provisional assessment so looking into provisional assessment what are the situations that leads to provisional assessment total four situations we have so in case of GST what is the reason for provisional assessment if the taxpayer is unable to compute the value or unable to determine the rate of GST then they will make application to the proper officer for doing the provisional assessment so only one reason so whenever the taxpayer unable to compute value or read they will make application that is in case of GST but in case of Customs it is not like that in case of Customs there are total four reasons first one is same both in GST and custom that is importer or exporter unable to do the self assessment second case proper officer deems it necessary to carry out chemical examination or test you have imported like what I said so white color powder and you are mentioning it as maida but officer has a doubt that it is not maida some other product so for that reason they want to carry out chemical examination or test correct or not so because you know they have to carry out the test they will not eat and see okay really they will carry out the test and in one movie also like Ganesha idle it was brought but in that idle inside there will be cocaine so what will they do so in that ethanol they will dip that Ganesha idel and they will separate plaster of Paris with cocaine like that you know that will be done that is known as chemical examination or test so if the officer wanted to carry out chemical examination or test then also they will go for provisional assessment or necessary documents not produced before the Customs officer and Customs officer want to carry out further inquiry then also they will go for provisional assessment finally necessary documents you have produced but these are not sufficient with the officer so he wanted to carry out further inquiry then also provisional assessment again this can also be given as a theory question what are the reasons for provisional assessment under Customs tell me what are the four reasons come on number one importer or exporter unable to do the self assessment number two proper officer requires chemical examination or test proper officer requires documents which are not produced are last case produced but are not sufficient okay then in provisional assessment first they will pass a order for provisional assessment and they will intimate the person to furnish the documents within 15 days so therefore first order for provisional assessment for want of documents thereafter 15 days time limit is given to produce the documents and the person has to submit the documents within 15 days or it can be extended for a further period of 3 months or further 3 months by ACDC or unlimited time by the commissioner to submit the documents what is the time limit 15 days it can be extended for a further period of 3 months by Customs officer further 3 months by ACDC assistant commissioner Deputy Commissioner or any time limit by the commissioner and if the documents are submitted within the time limit so whenever the documents are submitted from the date when documents are submitted within two months they need to complete the final assessment finalization of provisional assessment within two months from the date of reip of documents what if the docu documents are not submitted there is a time limit not to submit the documents on expiry of the time limit within two months they need to complete the final assessment so what is a time limit within which they need to complete the final assessment after provision assessment come on documents are submitted from the date of submission of documents plus two months suppose documents not submitted the time limit to submit the documents plus 2 months and this two months can be extended for a further period of 3 months by the commissioner now three situations may arise at the finalization of assessment if the final assessment is more than provisional assessment should we pay the differential amount or not yes we need to pay the differential amount and along with interest what is the rate of interest 15% paranam from which date to which date from the first day of the month in which provisional assessment is resorted till the actual date of payment of the differential amount for example if the provisional assessment is passed on 18th of March we need to compute interest from 18th March or 1 March 1 March read it carefully differential Duty payable along with interest at 15% perom from the first day of the month first day of the month in which provisional assessment is ordered till the date of payment of differential Duty suppose if final assessment equal to provisional assessment then in that case any amount is payable or refundable nothing suppose if Pro final assessment amount is less than the provisional assessment amount we need to get a refund and what is the time limit within which they need to Grant refund 3 months from the date of final assessment if they are not giving refund within 3 months then they need to to give us a interest what is the rate of interest 6% perom so when we pay interest it is 15% perom when they give interest it will be 6% per anom so differential Duty shall be refunded within 3 months from the rate of finalization of assessment if not refunded interest at 6% per anom is payable for the delay period after 3 months and importer shall execute a bond even for provisional assessment in case of warehousing that bond is Thrice the amount of Duty payable but in normal cases they have not what is the value for which bond is to be executed just remember the bond needs to be executed and furnish Security in the form of bank guarantee and refund of differential Duty upon final assessment is subject to unjust enrichment what is the meaning of unjust enrichment we need to prove to the officer that we have not transfer the burden to the next person for example provisional assessment duty is 10% and we recovered the 10% from our customer and therea they are reducing the rate from 10% to 8% will will we get the refund of 2% no because already we recover 10% from the next person so we will not get the refund so we need to prove to the officer that we have not recovered 10% from our customer then only we will be able to get refund what if we recover 10% from our customer who will get the refund our customer will get the refund okay so the person who Bond the incident of tax will get the refund of the tax or refund of the duty provisional assessment is applicable for both Import and Export and remember the common penality for all the provisions in customs is up to 50,000 000 suppose if you get a McQ on penality under Customs 50,000 is the option you understood don't say anything whichever option has 50,000 what penality what reason everything no Customs penality 50,000 you understood everywhere it will be up to 50,000 for contention of these Provisions then looking to audit under Customs section 99a what we have as audit under Customs is a post clearance audit at the time of clearance we are not required to get the accounts or books audited so post clearance audit that is after we complete the clearances the Customs officer will ask the audity to either bring the documents to the Customs officer's place or the Customs officer will zit the premises of the audity for the purpose of audit and who is called as Audi under Customs you can see that audit can be you know like any person importer exporter custodian or even it can be the warehouse keeper or it can be the transporter any person who is engaged in the imports and exports will be called as auditing okay so post clearance audit structured examination post clearance of goods from the customs of business relevant commercial systems sale contracts so what and all they can verify commercial systems sale contracts financial and non-financial Records even physical stock and other assets and the proper officer may carry out the audit where they can carry out the audit either in the office of the premises Office of the officer or in the premises of the audity and I told you who will be called as audity audity means any person engaged in any person engaged any person engaged in import or export in import or export is known as auditing and we have certain regular regulations in this regard regulation three says that records to be preserved by the audity for a minimum period of 5 years and in case of GST this 5 years will be 6 years 72 months okay so in customs what is the period for which we need to maintain records 5 years in GST it will be 6 years and it may be manual or electronic and made available to the proper officer as and when demanded and selection of audity is on risk parameter basis not that every import exporter they will do the audit and audit can be conducted at the audities premises a 15 days notice to be given in case of GST a 15 working days notice to be given in customs it is 15 days in GST it will be 15 working days prior notice will be given and regulation six says that CR CMA can be appointed for assisting the audit but this audit will be done by Department Customs department but if they want they can take the help of C or CMA on prior approval of the commission and contention of any provisions of these regulations will lead to a penality of up to 50,000 Rupees I told you the penality will be always 50,000 Rupees then looking to interest on account of delay in payment of customers Duty so when we need to pay customs duty generally that is in case of imported goods normal assessment not provisional assessment normal assessment self assessment when we need to pay the custom's duty so we have two options here that is immediate payment option and deferred payment option immediate payment option means suppose you are filing bill of Entry today once you file the bill of Entry today today itself you will get the acknowledgement for the Bill of Entry then today itself you should complete the payment of customs duty otherwise for every day delay you need to pay interest at the rate of 15% per anom that is known as immediate payment option on the date of presentation of Bill of Entry itself you need to pay the customs duty otherwise interest at the rate of 15% perom for everyday delay practically it may not be possible for them to pay the customs duty on the date of filing the bill of Entry so they will go for deferred payment of custom duty option so to whom deferred payment of custom duty option is available to the notified importers and exporters government from time to time we'll be giving deferred payment facility under deferred payment facility what they need to do they don't have to pay the customs duty immediately on filing the bill of Entry if the bill of Entry is filed between 1 to 15th of a month okay they need to file and know they need need to pay the customs duty by the 16th working day of that month bill of Entry returned for payment from 1 to 15th day of a month due date is 16th day of that month excluding holidays for example if you take September month September 1st to September 15 between September 1st to September 15 so we have filed the bill of entries no need to pay customs duty immediately at the time of filing bill of entries we need to see the 16th working day what is the 16th working day between 1 to 15 how many Sundays are there 1 8 15 these are the three Sundays and only public holidays and uh uh that government holidays will be taken festive holidays will not be considered as holidays under Customs so therefore that will be given in the question itself as to what are all the holidays between 1 to 15th like that so in this case say Sundays are the holidays so three Sundays now what is the 16th working day 16 17 18 you add three Sundays now these three Sundays you add here so therefore 19th will be taken as the due date are you understanding so if the bill is filed between first to 15th of the month 16th working day of the month suppose if the bill is filed between 16th to end of the month so 16th to end of the month next month first working day what is next month first working day excluding the holidays so between 16 to 13 how many days holidays two days two days holidays now so now two days holidays you add for the next month October 1st October 3rd so October 4th because October 2nd is a holiday now public holiday so October 1st October 3rd and therefore the next working day is what 4th so fourth October will be taken as the due date for payment are you understanding here so tell me these two points if the bill is return returned between 1 to 15th of the month the due date is 16th working day of the month if the bill is return between 16th to end of the month next month first working day that is excluding the holidays and in case it is 31st March the due date will be 31st March and we need to pay interest at the rate of 15% perom for everyday delay beyond the due date if you have not paid by this due date and suppose if the duty is payable on account of reassessment or provisional assessment I told you we will make application for provisional assessment or proper officer and our customs will order for provisional assessment he will ask us to pay some provisional Duty now by when that provisional Duty we need to pay within one working day also in self assessment they will do reassessment now that reassessment Duty by when we need to pay within one working day from the date of reassessment so the provisional assessment Duty and reassessment Duty we need to pay within one working day from the date on which bill of Entry is returned by the officer for payment of customer Duty otherwise we need to pay interest at the rate of 15% perom whereas differential Duty that is is when provisional assessment gets finalized we need to pay differential Duty in case of the differential Duty what is the interest that is payable 15% perom from which date to which date from the first day of the month in which provision assessment is passed till the date of payment of that differential amount are you understanding this here now mainly on this interest computation we will be having some questions so we'll see that yes see this moris L has imported goods from Germany and is finally reassessed under Section 18 means what provisional assessment section 17 is self assessment section 18 is provisional assessment section 18 of the Customs act for two such Consignments particulars are as follows date of provisional assessment is 12th December date of final reassessment is 2nd February Duty demand for First Consignment 1 lakh 180 refund for second Consignment 4 lh20 date of refund made by the department 28th April date of payment of Duty demanded 5th February so now determine the interest payable and receivable for the First Consignment we will see for the First Consignment what is the differential amount payable 1 lakh 180,000 and we need to compute interest from which date to which date what is the date of provisional assessment 12 December but we need to compute interest from 1st December till the date of payment of the duty that is 5th February so from 1 December December 31 days and January 31 days and February 5 days so we need to compute interest for 67 days that is 1ak 180,000 into 15% into 67 divided by 365 4956 whereas in case of refund what is the time limit within which they need to Grant the refund so 3 months from the date of final assessment so what is the date of final assessment second February from 2 February you count three months 2nd March 2nd April 2 May and when are they giving the refund 28th April is it within 3 months yes so whether they need to give us any interest or not required to give interest not required to give interest got it so mainly like this on this provisional assessment Etc we will get questions like this otherwise Theory question so like uh State the due dates for payment of deferred customs duty under clear first pay later scheme clear first pay later is actually deferred payment okay next look into the previous part procedures page number 202 mainly this will be for McQ purpose whatever procedures that we are going to discuss now so look into this import procedures so in case of import procedures this 12 points you need to understand what will happen is that first the exporter will hand over the cargo to the shipping company and the shipping company will give bill of leading bill of lading is a document of title whomever is holding bill of lading that person is the owner of the goods now what exporter will do will be sending that bill of leading to the Importer and importer when he submit bill of leading he will be able to prove that he is the owner of the goods now fourth step the master The Vessel will bring the vessel to India and he will be filing import manifest with the Customs officer or he will report an import manifest and the Customs off viser will give Grant of Entry inverts but Grant of Entry inverts is not applicable in case of aircraft and in case of vehicle but in case of vessel only it will be applicable so once Grant of Entry iners is given the master of the vessel will unload the goods with the poor trust authorities delivery of cargo so up to this the master of the vessel job job is over thereafter importer will file the bill of entry with the Customs officer either bill of entry for home consumption or Bill of entry for warehousing and Customs officer will give out of Customs charge order if the bill of Entry is for home consumption upon payment of custom duty the Customs officer will pass out of Customs charge order suppose if the bill of Entry is inbound bill of Entry the Customs off user will pass warehousing order so here out of Customs charge order means what type of Bill of Entry who would have filed bill of entry for home consumption and out of Customs charge order means that importer has paid the customs duty thereafter importer will submit bill of leading with the master of the vessel and the master of the vessel will be giving the delivery order to the Importer which means he is the owner of the goods so these two order copies what are the two order copies out of Customs charge order and delivery order he will submit to the Port Authorities Port Authorities are the custodian of the goods and they will release the imported goods so these are the various steps that is involved now in case all the Import and Export procedures are through customs portter I told you IC gate. gov.in in case of import by aircraft so wherever this billof leading Comes This billof leading is replaced with a different document called as airway bill okay so see this in case of import by aircraft 2 three and 9 2 three and 9 this this and this will be called as airway bill same way in case of import by vehicle these documents will be called as lry receipt or Railway receipt and in case of aircraft and vehicle Grant of Entry inwards is not required for arrival but it is required for unloading of the goods this point also I stress now what are the compliances to be followed by person in charge of the conveyance so who is person in charge of the conveyance already we know in case of vessel Master of the vessel in case of aircraft it is pilot in case of vehicle it is driver or conductor or any other person and place of arrival at which place they need to come only to the Customs port or Customs airport or land custom station in case of vessel it is customs port in case of aircraft it is customs airport in case of vehicle it is land custom station not all ports and airports will be called as Customs port or airport only notified ports and airports will be called as Customs port or airport where Import and Export is permitted and then they need to file import manifest import report or arrival manifest in which case import manifest in case of vessel import manifest in case of aircraft arrival manifest in case of vehicle it will be import report when it should be submitted import manifest should be submitted before the arrival so anytime prior to the arrival of the vessel arrival manifest also anytime prior to the arrival of the aircraft but import report when it is to be submitted within 12 hours after its arrival and how this should be submitted import manifest and arrival manifest will will be submitted electronically whereas import report will be submitted manually but in case when it is not practically possible to submit electronically commissioner may allow manual filing also and what is the penality for belated filing come on 50,000 up to 50,000 and file passenger name record information that is along with the import manifest import manifest arrival manifest or import report contains the details of the goods present in the conveyance they need to Al Al submit passenger name record information as to who are the people who are coming in the conveyance along with the goods also they need to submit that details and in case of import by vessel Goods can be unloaded only after obtaining Grant of Entry Inver only in case of vessel and goods will go into custody of the custodian as per section 45 and the custodian will ensure safe custody what if during this stage if the goods are pilfered who will be paying the customs duty already we discussed in case of pilage custodian is liable to pay customs duty only those goods which are mentioned in import manifest arrival manifest or import report should be unloaded and other Goods should not be unloaded and these unloaded Goods should be kept only in the approved place and goods should be unloaded under the supervision of the proper officer and for unloading if small boards are required what is this sometimes when the ship cannot come the ship will be anchored from there to sure the goods will be brought through boats so these Goods should accompany a document called as boat note read this for unloading a small boards are required then they should obtain boat note from the Customs officer suppose if unloading is on holidays and after office hours they need to pay some extra charges what is that extra charges known as mot charges Merchant overtime charges these are the various sections that we have for the complaints to be followed by person in charge then what are the complaint to be followed by the Importer imported goods whatever is unloaded will remain in the custody of custodian who shall be responsible for imported goods till clearance and the Importer should be filing a bill of Entry that bill of Entry will be filed Tech electronically through IC gate what are the three types of Bill of entries already we know Bill of entry for home consumption for import Goods cleared for home consumption bill of entry for warehousing or inbound bill of entry for keeping the goods and the warehouse without payment of customer Duty X Bond bill of entry for home consumption for clearance of goods from the Vos upon payment of custom duty when this bill of Entry should be filed bill of Entry should be filed before the date of arrival can I file it 3 days before the date of arrival or 5 days before the date of arrival 10 days before the date of arrival yes so up to 30 days prior to the date of arrival we can file the bill of Entry but not beyond that for example I filed a bill of entry and within 30 days The Vessel or aircraft has not arrived which means the bill of Entry that I have filed will expire so what is the validity of the Bill of Entry that is filed 30 days 30 days if it does not arrive within 30 days of filing bill of Entry a fresh bill of Entry is required to be filed what is the late fee for delay in filing bill of Entry already we discussed if the delay is up to 3 days 5,000 rupees per day if the delay is beyond 3 days 10,000 rupees per day and what is a maximum you know late fee 100% of customs duty payable and in case of Exempted Goods also we need to file bill of Entry but maximum penalty will be 50,000 okay then when whenever we file the bill of Entry suppose if the bill of Entry is for home consumption or xon Bill of Entry we need to pay the customs duty also and the Customs officer will pass out of Customs charge order what is the time limit within which we need to file bill of Entry once the goods are unloaded say we could not file the prior bill of Entry we missed it we want to file a later bill of Entry what is the time limit within which we need to file that 30 days once the goods are unloaded within 30 days if you are neither filing a bill of entry for home consumption nor filing bill of for warehousing the goods will be either be auctioned by the Customs officer or the Customs officer will deposit the goods in the warehouse and this Warehouse is not done by you this Warehouse is done by the Customs department so please read the next paragraph if the goods are not cleared for home consumption or wosing within 30 days after unloading such Goods may be disposed of by the custodian or officer May deposit such Goods in a warehouse for 30 days and Beyond 30 days for a further period of 30 days commissioner should approve so 30 plus 30 plus 30 like that so every 30 days if they want to extend they need to get a permission from commissioner and Export procedure see this export procedure we don't have that many formalities so first what will happen exporter will bring the shipping Bill along with the goods and will file with the Customs officer and when the shipping bill is produced with the Customs officer the Customs officer will verify the shipping Bill and pass a let export order thereafter the goods will be handed over to the person in charge along with the shipping Bill and person in charge will obtain Grant of Entry outwards and then he will load the goods into the ship but in case of baggage it can be loaded without permission and this step is not applicable in case of aircraft or vehicle because in case of aircraft or vehicle we don't have Grant of Entry inwards or Grant of Entry outwards then the person in charge will submit the export Manifest this export manifest is called as departure manifest in case of aircraft and Export report in case of vehicle and what are the complaints to be followed by person in charge loading of goods only at approved place they're unloading only at approved place here loading at approved Place loading only under the supervision of proper officer they're unloading under the supervision of proper officer here loading under the supervision of proper officer loading with the help of small boats they're unloading with the help of small boats boat not required but here loading with the help of small boats boat not not required because shipping Bill itself will be sufficient loading on holidays and after office hours Merchant overtime charges same point there also and she'll obtain entry outwards from Customs officer before loading the goods but this is applicable only in case of Vel and they need to file export manifest departure manifest or export report and they need to file passenger name record information and should obtain permission to leave India from the Customs officer actually all the these points from the context of import if you see so that you replace it from the context of export that is this then what are the compliances to be followed by the exporter they should submit shipping bill in case of Velar aircraft bill of export in case of vehicle by electronic mode and they need to self assess and pay the customs duty either under Section 17 or 18 and they shall pay customs duty if applicable immediately on filing shipping bill or deferred payment facility but basically deferred pay pment facility is not at enabled for exporter we have deferred payment facility only for importer and they should obtain the late export order these are the complaints to be followed by exporter clear then we have Transit and transshipment of goods so before that few queries here let me answer sir in case of application of quesam rean case will there be any interest implication on IGS amount yes like how we pay the customs duty even igst also will be part and parcel of Customs rule 10 is there in which chapter in that's it book valuation chapter sir in case of Consignment bond isn't it better to pay the duty and release the goods instead of paying three times the duty actually in bond we will not pay the duty please don't have that misconception Bond when we are executing it is a document stamp paper we are not paying that amount we execute a bond for example we execute bond for 10 lakhs means are we paying 10 lakhs no 10 lakhs related stamp paper what is a stamp Duty in Tamil Nadu say 2.5% so 10 lakhs into 2.5% that is uh that is 205,000 rupees worth of stamp paper we will sign okay so that is what we do so not that we will pay 10 lakhs and all and next abatement of Duty available for warehoused goods but in suggested answer of test six you mentioned that appointment of Duties allowed on any imported goods other than veros Goods is it I don't know here let me check that sir in Ganesha example wherever test performed by the officer if the test fails then it considers as remission of Duty first of all what happens is that they are doing a test so they're asking asking us to pay the provisional Duty suppose if the test fails then we don't have to pay a duty and whatever Duty already paid we will get it as a refund what is the time limit within which we need to get the refund 3 months from the date of final assessment that will be applicable okay now look into this question e e yes question number 16 you can see here it's a December 21 exam question for five marks they have asked Supreme Car decars Imported Car music systems and GPS devices from Germany the Importer submits the following issues for your consideration seven music systems were pfer before unloading and before the proper officer has made an order for clearance for home consumption actually pilage should have happened after unloading and before order for clearance but before unloading itself if the page has happened actually there is no Levy for payment of custom duty because of that Mangalore refineries case is it clear but in that suggested answer what they are telling is that pilage can be claimed like that they have mentioned but this is actually the answer as per suggested but reality suppose if the same question you get now what you need to write first you need to write for this if the page has occurred before unloading there is no Levy of customs duty under section 12 as held by Supreme Court in Mangalore refineries case accordingly customs duty not payable however if the Customs Department insist on filing bill of entry for all the goods then in that case case we can claim the pilage under Section 13 like that you need to write don't write directly pilage mention about that Mangalore refineries case and thereafter if the Customs Department insist on filing bill of entry for all the goods then we can claim the pilferage under Section 13 then 10 GPS devices were pilfered after unloading and before the proper officer has made an order for clearance for home consumption so can we claim pill forage yes here we don't have to write about mangalo refineries case because after unloading before order for clearance and 30 music systems were damaged see the wording damaged so after unloading and Examination for assessment by the Customs authorities but before actual clearance in this case can we claim pilage no in case of damage we need to claim abatement so therefore we need to write about the provisions of abatement so like that depending upon the situation you need to apply the relevant section okay then see this on definitions we may get questions like this examine the validity of the following statements a beneficial owner of imported goods is a person on whose behalf the goods are imported true or false true Customs area does not in include Warehouse false Customs area includes Warehouse custom station includes International career terminal yes interational career terminal means in airport whenever the goods are imported by career so one terminal will be dedicatedly given to the Customs authorities that is known as International career terminal okay fine so with this we will stop for today I'm leaving half an hour early okay so the remaining portion what we have few areas only in customs that is left that is stores under customs and then uh in procedures few points and then we have refunds and FTP that we will discuss tomorrow and we will continue with GST so Mo mostly by first session we will complete all these things because I told you FTP fully not required only some selected areas important areas we will see and in our second session we will be starting with input tax credit so tomorrow agenda is that we will discuss input tax credit and even if time permits we will also be covering exemptions RCM okay so very important areas I wanted to start first so that's why tomorrow that is the agenda day after tomorrow we will be discussing about place of supply and this volume two topics refunds search seizure offense and penalities demand and Recovery those things we will see and on the last day the remaining topics in GST okay so that's how we are going to discuss fine and tomorrow we will meet tomorrow class is from 9:30 today I started at 10:00 because being the first day tomorrow the class will be at 9:30 and mighty 50 questions so the top 50 questions usually every attempt I will be giving so this attempt also I'll give but I'm not able to give it now because I have to analyze the empty piece so ICI has not yet uploaded the mtps series 1 Series 2 Etc so due to that reason I need some time by end of this month I will give you mighty 50 and even I will record that in the YouTube and I will post it in that okay don't worry that will be there in that fine we'll meet tomorrow yes fine thank you e e e e e e e e e e e e e e for