07 August 2014

WTO’s Customs Valuation Agreement to be rectified

English and Spanish texts of the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (Agreement on Customs Valuation) are set to be amended.

According to the document (Reference: WLI/100) dated 28-7-2014 circulated in WTO, the proposal is to remove a conjunction “and” between the words “work” and “plans” and add a comma between the words “sketches” and “undertaken” as they appear in Article 8.1(b)(iv) (relating to additions to the price actually paid or payable) of the Agreement. Corrections will be made to the authentic text if objection is not notified within 30 days by any WTO Member.

After the corrections, the sub-para, will read as “(iv) engineering, development, artwork, design work, [and] plans and sketches [,] undertaken elsewhere than in the country of importation and necessary for the production of the imported goods;”

Interestingly, though the phraseology used in Article 8.1(b)(iv) is also present in Article 15(2)(c) of the said Agreement which describes the scope of the expressions “identical goods” and “similar goods”, yet no rectification/amendment has been proposed there.


Indian laws to be corrected

Similar corrections/rectifications will be required in the Indian Customs Valuation Rules i.e. in Rule 10(1)(b)(iv) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. Definitions of “identical goods” and “similar goods” as given in Rule 2(d) and (f) of the Indian Rules however use the phrase ‘design work, plan or sketch’.

Valuation Rules for the purpose of charging Central Excise duty levied in India on all manufactured goods, may also require this change/correction. At present Explanation 1(iv) in Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 also uses the same phrase i.e. ‘design work and plans and sketches’ in relation to additional consideration.


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