This department in Customs
is formed to investigate transactions between foreign exporter and Indian
importer, if they are related.
Important
Q & A :-
Who
is a related party ?
Authority
:
Refer Customs Valuation (Determination of Value of Imported Goods) Rules, 2007
Rule 2 ( 2)
For the purpose of these
rules, persons shall be deemed to be "related" only if - (i)
they are officers or directors of one another's businesses;
(ii) they are legally recognised partners in
business;
(iii) they are employer and employee;
(iv) any person directly or indirectly owns,
controls or holds five per cent or more of the outstanding voting stock or
shares of both of them;
(v) one of them directly or indirectly controls
the other;
(vi) both of them are directly or indirectly
controlled by a third person;
(vii)together they directly
or indirectly control a third person; or
(viii) they are members of
the same family.
ExplanationI. - The term
"person" also includes legal persons.
Explanation II. - Persons
who are associated in the business of one another in that one is the sole agent
or sole distributor or sole concessionaire, howsoever described, of the other
shall be deemed to be related for the purpose of these rules, if they fall
within the criteria of this sub-rule.
Authority:
CIRCULAR NO 5 /2016-Customs Dt 09th Feb 2016
What
is the procedure to be followed by customs in case imports are from a related
party ?
Para 6 - In the event of the
Commissioner directing investigations by SVB, the proper officer shall promptly
carry out provisional assessment in terms of section 18 of the Customs Act,
1962 and ensure that no delays occur in the release of the goods
Para 5.1 Upon filing of the
Bill of Entry and receipt of information in Annexure A, the proper officer
shall proceed to determine whether, prima facie, there is a need for
investigation by the SVB
Pare 3.2- If the importer fails to provide documents
and information required for SVB inquiries, within 60 days of such requisition,
security deposit at a rate of 5% of the declared assessable value shall be
imposed by the Commissioner for a period not exceeding the next three months
Para 3.3 - It has now been
decided that the SVB shall not issue an appealable order. Instead, the SVB
shall convey its investigative findings by way of an Investigation Report to
the referring customs formation for finalizing the provisional assessments
What
are the exemptions from SVB investigation even though imports from a related
party ?
Para 3.5 The Board has also
decided that in order to ensure that only cases with significant revenue
implications are taken up for SVB investigations, the following cases shall not
be taken up for inquiries by SVBs:
(i) Import of samples and prototypes from
related sellers
(ii) Imports from related sellers where
duty chargeable (including additional duty of Customs etc.) is unconditionally
fully exempted or nil.
(iii) Any transaction where the value of
imported goods is less than ₹ 1 lac but cumulatively these transactions do not
exceed ₹ 25 lacs in any financial year
Renewal
of SVB orders is still required ?
No.
Para 10. In any case where,
the circumstances of sale or terms and conditions of the agreement between the
buyer and related seller change, or any other payments of the kind referred
under Rule 10 (1) (c), (d) & (e) of the CVR, 2007 become payable, the
importers shall be required to declare the same at the place of import in the
prescribed format at Annexure C. In all such cases, the proper officer shall
examine the transactions as per procedures laid out above in this circular and
the jurisdictional Commissioner shall refer the matter to the jurisdictional
SVB, where required.
Para 10.1 In view of the
above, it may be noted that the system of renewal of SVB orders has been
discontinued with immediate effect.
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