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The Basis of Customs Valuation

The Basis of Customs Valuation
Construction site crane building a blue 3D text.
September 15
11:29 2018

When you bring goods into Fiji you may need to pay customs duty and other charges on your arrival.

What you pay will depend on a number of factors such as; wheth­er the goods are for your own per­sonal use; whether they are cov­ered by a concession or duty-free allowance and whether they are for commercial use.

 

When taking goods out of Fiji, your goods may incur a fee if they require customs inspection.

Through this article we will find out more about what you may need to pay, the concessions that might apply, how to work out the charges, our methods of payment, and the exchange rates Customs uses.

Customs value means the value of goods calculated for the pur­poses of collecting customs du­ties.

Customs value is the price actu­ally paid or payable for the goods when sold for export to Fiji.

This includes the cost, inward freight, insurance and all other charges related to the goods being valued.

The ‘price actually paid or pay­able’ represents the total payment made or to be made by the Fiji im­porter for the imported goods.

This include any direct and in­direct payment in relation to the imported goods.

Donated goods

“Customs Tariff Act 1986” stipu­lates that where the customs val­ue cannot be determined under normal circumstances.

There should normally be a pro­cess of consultation between the customs officials and the importer with a view to arriving at an alter­natives basis of valuation.

The legislation puts a lot of em­phasis on the interaction between the importers and customs of­ficials to determine the customs value in a transparent manner.

Valuation components are the various element which must be taken into account in determining the customs value.

The dutiable elements are to be added whereas the non-dutiable elements are to be deducted to compute the customs value.

These are listed below:

nCommissions and brokerage, ex­cept buying commissions

nThe cost of containers which are treated as being one for cus­toms purposes with the goods in question

nThe cost of containers which are treated as being one for cus­toms purposes with the goods in question

nThe cost of packing whether for labor or materials

nThe value, apportioned as ap­propriate, of the following goods and services where supplied di­rectly or indirectly by the buyer free of charge or at reduced cost for use in connection with the pro­duction and sale for export of the imported goods, to the extent that such value has not been included in the price actually paid or pay­able

nMaterials, components, parts and similar items incorporated in the imported goods;

nTools, dies, molds and similar item used in the production of the imported goods;

nMaterials consumed in the im­ported goods and Engineering, de­velopment, artwork, design work, and plans and sketches undertak­en elsewhere than in the import­ing country and necessary for the production of imported goods.

nRoyalties and license fees re­lated to goods being valued that the buyer must pay either directly or indirectly, as condition of sale of the goods being valued, to the extent that such royalties and fees are not included in the price actu­ally paid or payable;

nThe value of any part of the pro­ceeds of any subsequent resale, disposal or use of the goods that accrues directly or indirectly to the seller

nAdvance payments made earlier but not reflected in the invoice

Other cost which may be excluded from the customs valuation

All discounts except retrospec­tive discounts.

The following charges, provided they are separately declared in the commercial invoice

Interest charges for deferred payment

Post-importation charges such as inland construction, erection, assembly etc., undertaken after importation and

Duties and taxes payable in the importing country

Calculation of customs duty

Customs value is based on CIF (cost insurance, and freight) basis which include, Freight charges up to the place of importation, loading, unloading and handling charges associated with transport of the goods to the place of impor­tation and insurance.

How are royalties and license fees to be treated for valuation purposes?

When the buyer pays a royalty or license fees related to the import­ed goods as a condition of sale, the amount has to be added to the price actually paid or payable.

Examples are payments in re­spect of patents trademarks, copy­rights etc.

The basic requirement for addi­tion of these fees under Article 8.1 (c) of the valuation agreement and Customs Tariff Act 1986.

Such amounts are related to the goods being valued; and

The buyer pays these amounts as a condition of sale of the goods being valued.

Payments made by the buyer for the right to distribute or resell the imported goods have to be added to the price actually paid or pay­able for the imported goods only if such payments are a condition of the sale for export to the country of importation.

On the other hand, payments for the right to reproduce the import­ed goods in the country of impor­tation should not be added to the price actually paid or payable for the imported goods in determin­ing the customs value.

Treatment of lease goods

If you import goods under lease or rental agreement, then there will be no sale between you and the supplier.

In such circumstances we will rely on the terms and conditions of the contractual agreement to determine the customs value.

It becomes your obligation to provide customs with the details of the contractual agreement for ease of reference and valuation purposes.

Duty will be calculated based on the leased value and the goods will be re-exported back out of Fiji.

In case the importer wishes to permanently used the leased or hired goods in Fiji then proper valuation will be conducted and proper duty collected taken into account the duty they have previ­ously paid on the leased value.

For more information, please visit our website www.frcs.org.fj or email us on info@frcs.org.fj.

Feedback: maraia.vula@fijisun.com.fj

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