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Special Valuation Branch order

Special Valuation Branch order

The Special Valuation Branch (‘SVB’) is a unit of the Indian Customs Authorities that investigates the valuation of goods during imports between related parties. The special relationship between the Indian importer and its foreign supplier may influence the prices of the goods and consequently, may also influence the custom duty levied on such transactions. The function of the SVB is to examine the influence of such a relationship on the invoice value of the imported goods. 

As per the Custom Valuation (Determination of Value of Imported Goods), Rules 2007, persons shall be deemed to be related in the following situations:

  1. Officers or directors of one another’s business;
  2. Business partners;
  3. Employer-employee;
  4. If one person owns, directly or indirectly, 5% or more stock or shares of both parties;
  5. Either party, directly or indirectly, controls the other;
  6. Both parties are directly or indirectly controlled by a third person;
  7. Both parties together control a third person;
  8. They are members of the same family.

Apart from the above, those who are having a collaboration agreement, technical assistance agreement or any other agreement with the foreign supplier are also required to register with Special Valuation Branch.

Where the importer is not able to substantiate with the documentary evidence that his invoice value is not influenced because of the relationship, a reference is made to the Special Valuation Branch by the Appraising Group to further investigate the relationship between the parties and its influence on the assessable value. Based on this, the case is registered with the SVB and a PD circular for provisional assessment is issued which is to be indicated by the importer at the time of provisional assessment of all their imports and execute PD Bond with 1% Extra Duty Deposit on the assessable value of the goods. 

The importer is required to furnish all the information and details as prescribed. The importer also have the option to present his case in a personal hearing. Once the case is finalised by the SVB, the provisional assessments pending in the Appraising Groups will be finalised and the extra duty deposit paid at the time of provisional assessment will be adjusted in accordance with the Special Valuation Branch order. The order issued by the SVB is in operation for a period of 3 years which may be renewed by SVB provided there is no change in the terms and conditions of the agreement between the parties. 

Our team of professionals have rich experience in assisting companies complying with the provisions of the Custom Valuation (Determination of Value of Imported Goods), Rules 2007 and also obtaining orders from SVB.

ASC’s key service offerings include the following:

  • Assisting companies in assessing the requirement of SVB.
  • Assessing the related party transaction entered into by the company.
  • Assistance in preparing all necessary documents required for submission with Special Valuation Branch authority. 
  • Representation in case of any show-cause notice from SVB authority. 

ASC’s key service includes assisting companies in assessing the requirement of the Special Valuation Branch and assistance in preparing all necessary documents required for submission with SVB authority.

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