Special Valuation Branch (SVB) is a unit of the Custom House the function of which is to investigate the transactions involving the association between the suppliers including any technical collaboration between the parties etc. All those importers importing goods from related parties or having any technical collaboration with their related parties are required to file a declaration about the relationship at the time of filing a bill of entry before the jurisdictional customs authorities i.e. Appraising Group.
The Group based on the circumstances of sale and the invoice value of the identical or similar goods will make a reference to the SVB order (Special Valuation Branch ) for further investigation of the influence of connection on assessable value. If the importer is able to demonstrate with the help of the invoice value of sales to unrelated buyers that the import values are not influenced by the relationship. In that case, there is no requirement for any recommendation to SVB in customs.
Also, the bill will be evaluated based on those coexisting import values. Although, if there will be no coexisting imports, and the contrast of values cannot be calculated at the time of SVB in customs evaluation of bill of entry, then a recommendation to Special Valuation Branch needs to be made by the Appraising Group with the prior approval of the Commissioner of Customs.
The case is registered with the Special Valuation Branch order based on the reference from the Appraising Group and a PD circular for provisional assessment is issued to the importer as well as the Appraising Group. The importer is required to indicate the PD circular no. at the time of provisional assessment of all its imports and execute PD bond with extra duty deposit at the prescribed rate on the assessable value of goods along with other details as required by the questionnaire issued by the Appraising Group.
Based on the details submitted by the importer an order in original is passed by the D.C. (Special Valuation Branch) which is intimated to the importer and also to the Appraising Group. The SVB order in original is valid for a period of three years and requires renewal.
How ASC Help?
ASC has in-house professionals with years of experience in consulting importers on SVB in Customs to have their bill of entry finalized by the Customs Authorities and also the renewal of order in original. Therefore ASC provides the out-and-out services for the Special Valuation Branch of customs & helps thoroughly:
Currently, there are 5 special valuation branches in India i.e., Mumbai, Chennai, Kolkata, Delhi, and Bengaluru.
SVB investigations are usually applicable for all the imports undertaken from the related supplier. However, in the following cases, the SVB investigation is exempted:
They can act as supporting documents but cannot be the sole basis for the purpose of SVB investigations. Further, the purpose of SVB in customs authorities is to identify the undervaluation of imported goods whereas, the purpose of income tax authorities is to identify the overvaluation of imported goods. Also, different methodologies are adopted by customs and income tax for the valuation of goods. However, customs authorities may ask for the documents prepared for transfer pricing purposes under the income tax but they won’t be the sole basis for their investigation.
In case there is any change in the circumstances of sale or there is any change in the terms and conditions between the importer and the supplier, then the importer shall file a declaration in Annexure-C. In case the jurisdiction commissioner recommends the SVB orders process, then it will be initiated.
Yes. If the importer makes additional payments to the supplier over and above the value of imported goods, then it can attract SVB investigations to know the actual reason behind such payments.
There are 5 Special Valuation Branches of Customs across India i.e., Delhi, Chennai, Kolkata, Mumbai, and Bengaluru. The importer has been provided the option to select any of the Special Valuation Branches as per his convenience. It is always better to select the one closest to your registered office or the location of your import.
SVB valuation and investigation get triggered immediately on the first import from the related seller. As soon as the importer declares the seller as related while filing the bill of entry for customs clearance, the SVB investigation gets triggered.
The documents to be submitted as a sole distributor, sole agent or sole concessionaire have been prescribed in Annexure B.
The SVBs in customs shall normally complete their investigations within a period of 2 months from the receipt of information in Annexure B and issue the SVB order and findings therein.
The SVB order is valid for a period of 3 years beyond which the importer shall apply for renewal in case the imports take place for a period exceeding 3 years.
Following importers who are related to the suppliers as per the following sections and rules shall be required to obtain SVB registration:
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