Dept of
Revenue Issues Procedure for Assessment of Value of Iron Ore Exports
[CBEC Circular No. 12
dated 17th November 2014]
Subject: Valuation/Assessment Practice in respect
of export of Iron Ore.
The Board has received references relating to the valuation of iron ore
entered for export. The matter has been examined.
2. It has been reported that Iron
ore, by its nature, undergoes a change in moisture and Fe content with the
passage of time including during transport. The iron ore is tested both at the
load port and at the port of discharge for ascertaining its quality and price. The commercial
contracts governing its sale, often,
contain provisions to adjust the amount payable depending upon the test report
at the port of discharge. It is also reported that exporters present
provisional invoices at the time of export since prices are to be finally
determined after tests at discharge port.
3. The matter has been examined. In
order to bring in uniformity, transparency and consistency in assessment of
export of Iron Ore, fines and pellets, it has been decided that the following
procedure shall be adopted by all Custom Houses:
(a) When a consignment is entered for export of iron ore,
fines or pellets, samples shall be drawn in the presence of Customs by
following the procedure laid down by the Bureau of Indian Standards for drawal of samples of Iron
ore, fines and Iron ore pellets and sent for testing.
(b) The declared value of the export goods, shall be scrutinized in relation to the provisional
invoice, contract, weight, price, etc., by the proper officer in terms of the
provisions of Section 14 and the Customs Valuation (Determination of Value of
Export Goods) Rules, 2007 and the Shipping Bill may be provisionally assessed. In case of the
transaction being declared or found to be between related parties, procedures
governing related party transactions shall be followed.
(c) Upon receipt of the load
port test report and discharge port test report the proper officer shall
compare the two reports with the terms set out in the contract. Where
variations in the two test reports are within tolerance limits provided in the
contract and do not impinge upon the declared price, the proper officer may
proceed to finalize the provisionally assessed shipping bill in terms of the
provisions of Section 14 and the Customs Valuation (Determination of Value of
Export Goods) Rules, 2007.
(d) In cases where the load port test
report and discharge port test report show a variation, so as to impinge upon
the price, the proper officer shall proceed to re-determine the value of the
goods in terms of Customs Valuation (Determination of Value of Export Goods)
Rules, 2007. In no case, shall a price based upon the average of the two test
reports be accepted for the purposes of arriving at the assessable value.
(e) In cases where the transaction is
being declared or is found to be between related Parties, while the above
procedures will continue to be followed, the finalization of assessments shall
be done by following instructions governing the investigation of such cases by
SVBs.
(f) The Custom Houses will ensure
that the shipping bills are finally assessed within 30 days of the receipt of
all documents. However, this time limit shall not apply to cases under
investigation for related party transactions, which shall be governed by the
circular relating to investigations by SVBs.
4. The Custom Houses shall monitor
receipt of Bank Realisation Certificates for the
purposes of comparison with the final invoices submitted by the exporter to
satisfy the accuracy of assessed values.
5. Difficulties, if any, faced in
the implementation of this circular, may be immediately brought to the notice
of the Board.
6. Wide publicity to this Circular
may be given by way of issuance of public notice.
F. No. 465/8/2013 – Cus
V