GATT Shall be pursued in the valuation of goods for custom purposes :
Transaction Value
Value shall be the transaction value for customs. The importer shall declare the transaction value along with all description and documents. Customs value shall be determined on the basis of such value if is in conformity with GATT. If such transaction value doesn't include freight or insurance or other related expenses, the customs officer shall determine transaction value by adding an estimated amount likely to be incurred.
- if such value appears to be doubtful, the customs officer may ask for additional documents to prove such value is the actual value and the importer shall provide those documents.
Power to fix estimated amount of freight, insurance or other related costs:
Circumstance beyond control - Importer is not able to submit documents related to cost, insurance, freight - submit application to the custom officer for fixation of such costs - if the content of application is reasonable, custom officer to fix such costs to be included in the transaction value - importer to submit evidence regarding actual costs not later than 90 days after such fixation.
if provisional cost > Actual costs , refund, if provisional cost < Actual Cost, Pay excess
if evidence related to actual cost is not submitted, such provisional value shall be final.
Provision related to Air Fare
in case of goods imported through air, the importer shall declare the value of goods, transport cost and insurance separately.
1. If the airfare is prescribed by the DG
| If transport cost is mentioned in the airway bill | higher of amount declared by the importer or such amount mentioned in the AWB |
| If transport cost is not mentioned in the AWB | The custom officer may seek the actual cost from the airlines operator and adjust accordingly if the declared amount is less |
Value of identical goods
identical goods - Goods which are the same in all respects, including physical characteristics, quality and reputation.
If the customs value cannot be determined on the basis of the transaction value, the customs duty of such goods shall be determined on the basis of the transaction value of identical goods already imported into Nepal prior to the import of such goods.
Value of Similar goods
Similar goods - means goods which, although not alike in all respects, have like characteristics and like component materials which enable them to perform the same functions and to be commercially interchangeable.
If the customs value cannot be determined on the basis of the transaction value of identical goods, the customs duty of such goods shall be determined on the basis of the transaction value of similar goods already imported into Nepal prior to the import of such goods.
Things to remember for similar and identical goods-
- should be produced in the same country and by the same person. if information relating to goods available by the same person is not available, goods produced by different person in the same country shall be taken.
- should be exported to Nepal around the same time as the goods being valued.
- at the same commercial level and substantially the same quantity (if not found at the same quantity or commercial level or both, adjustment may be done for the same)
- if more than one value of identical goods are found, lowest value shall be considered
Identical goods are alike in all respect, however, minor differences shall not be considered. Similar goods are not alike, but similar and perform similar functions
Deductive Value
If the customs value cannot be determined on the basis of the transaction value of similar goods, and such goods have already been imported into Nepal and sold at market to a person who is not related to the importer at the greatest aggregate quantity, the customs value of such goods shall be determined on the basis of deductive value method, by deducting the tax, duty levied in Nepal on the selling price of each unit of the maximum unit so sold, and other related costs and profits.
Deductive Value = Selling price - Profit - Costs incurred in Nepal - Duties levied in Nepal . Can be used if other methods are not available and the goods have been sold at arms length
Computed Value
If the customs value cannot be determined on the basis of the Deductive Value method or the importer makes request for determination of value as per this method prior to adoption of deductive value method, the customs value shall be determined on the basis of computed value method.
Computed Value = Costs incurred in manufacturing + profits likely to be made + cost of transport to the place of importation + insurance + loading/unloading at the place of importation
If custom value cannot be determined as above methods, the custom officer shall determine the custom value of goods imported on a reasonable basis.
Baggage for personal purposes/goods received as gift or specimen/relief material
If transaction value is not available or goods are submitted without indication of transaction value, custom officer may determine reasonable customs value of such goods.
Under-Invoicing
If the transaction value as declared by the importer is less than the custom value determined, then the custom officer has following two options :
- Complete clearing process by recovering 50% additional duty on such difference amount.
- Purchase or cause to be purchase such goods - purchase amount to be 105% of the value declared by the importer
Date of Determination of Currency
| Rate Prescribed | Selling Rate prescribed by NRB on the |
| Rate not Prescribed | Shall be first converted into USD and selling rate of USD on the above mentioned date should be used |
| Duty is paid subsequent to the importation thereof under the diplomatic facility, duty facility or full or partial exemption of duty | Selling rate of foreign currency which is prescribed by the Nepal Rastra Bank and prevailing on the day of payment of the remaining duty. |
Provisional Valuation
Provisional valuation may be done in following situations:
- Importer makes application, with a reasonable reason, that documents and other related information could not be provided.
- Custom value can be determined by only after carrying out the laboratory test or other examination of goods
- appears a need to make further inquiry into the documents and information provided by the importer.
In order to clear the goods, the importer has to furnish a deposit of the duty chargeable on such provisional valuation. Final valuation shall be done within 22 days, and if value so determined is greater than provisional value additional duty may be collected and if such value is less, duty collected in excess shall be refunded
Valuation under special circumstances
Vehicle, Machinery, Equipment - imported under duty/diplomatic privilege / full or partial exemption/Bank Guarantee Facility/Cash deposit facility/under a condition of return back - Sold in Nepal
Customs value shall be calculated as follows
Value at the time of import: xxx
Less : Depreciation as per WDV method @ 10% from the date of manufacture to the date of export less: time spent in the foreign country before import(i.e. from original import to such sale/gift) : xxx
(Max allowed for five years only)
Calculate customs on the above value as per the rate on the date of payment. in addition 60% of rebate is also available on the custom duty. Also, duty already paid shall also be available as rebate.
| Value calculated as per above: | xxx |
| Custom duty on the value as per above | xxx |
| Less:60% on the above custom value. only if 5 years has elapsed from the date of import and sold in Nepal | xxx |
| Less: Duty already Paid | xxx |
| Total duty to be paid | xxx |
Note: Only completed years shall be considered.
if vehicle is imported for private purpose under partial duty exemption is sold or transferred, same process as above except 60% rebate as above is not available.
Other Points:
- Installation charges are not included in the valuation.
- Custom Agent commission are not included.
- Local transportation is not included.
- insurance within Nepal is not included in valuation.
Published By
Aadesh Kandel
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