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Death of Economy

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. Basis of Determination of Price

Computation of Income from International Transactions shall be done having regard to arm’s length price as per section 92C where under six methods are prescribed namely :

(a) comparable uncontrolled price method;

(b) resale price method;

(b) cost plus method;

(c) profit split method;

(d) transactional net margin method;

(e) such other method as may be prescribed by the Board.

“Arm’s length price” means a price which is applied or proposed to be applied in a transaction between persons other than associated enterprises, in uncontrolled conditions. Section 14 of the Act provides for valuation of goods. Valuation of the such goods shall be deemed to be the price at which such goods or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation or exportation, as the case may be, in the course of international trade where the seller and buyer have no interest in the business of each other and the price is the sole consideration for sale or offer for sale.

Rule 4(3) of Customs Valuation (Determina-tion of Price of Imported Goods) Rules, 1988 provides that where the seller and buyer are related to each other, the value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicates that the relationship did not influence the price.

However, Where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicates that the relationship did not influence the price.

In a sale between related persons, the transaction value shall be accepted, when-ever the importer demonstrates that the declared value of the goods being valued, closely approximates to one of the following values ascertained at or about the same time -

(i) the transaction value of identical goods, or of similar goods, in sales to unrelated buyers in India;

(ii) the deductive value for identical goods or similar goods;

(iii)the computed value for identical goods or similar goods.

provisions of Rule 9. Section 4 of the Act provides for valuation of excisable goods for purposes of charging of duty of excise where under, the duty of excise is chargeable on any excisable goods with reference to their value. On each removal of the goods, such value shall in a case where the goods are sold by the assessee for delivery at the time and place of removal, the assessee and the buyer of the goods are not related .

In any other case, including the case where the goods are not sold, the value shall be determined in such manner as may be prescribed. However, this section is not applicable in respect of any excisable goods for which a tariff value has been fixed under Section 3(2) of the Act. Where the excisable goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture of other articles or where the assessee so arranges that the excisable goods are not sold by him except to or through a related person in such a situation the value shall be determined as per Rules 8, 9 and 10 of the Central Excise (Determi-nation of Price of Excisable Goods) Rules, 2000. These Rules provide that—

Where the excisable goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture of other articles, the value shall be one hundred and fifteen per cent of the cost of production or manufacture of such goods. (Rule 8)

When the assessee so arranges that the excisable goods are not sold by an assessee except to or through a person who is related in the manner specified in either of sub-clauses (ii), (iii) or (iv) of clause (b) of sub-section (3) of section 4 of the Act, the value of the goods shall be the normal transaction value at which these are sold by the related person at the time of removal, to buyers (not being related person); or where such goods are not sold to such buyers, to buyers (being related person), who sells such goods in retail :

It is however provided that in a case where the related person does not sell the goods but uses or consumes such goods in the production or manufacture of articles, the value shall be determined in the manner specified in Rule 8. (Rule 9)

When the assessee so arranges that the excisable goods are not sold by him except to or through an inter-connected undertaking, the value of goods

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