Rules 2023 came into effect
On February 11, 2023, India’s Customs (Assistance in Declaring the Value of Identified Imported Goods) Rules 2023 came into effect. This rule was introduced for under-invoicing, and it requires further investigation of imported goods whose value is underestimated.
The rule sets out a mechanism for policing potentially under-invoiced goods by requiring importers to provide proof of specific details and for their customs to assess the exact value.
The specific process is as follows:
First of all, if a domestic manufacturer in India feels that the price of his product is affected by undervalued import prices, he can submit a written application (in fact, anyone can submit it), and then a special committee will do further investigation.
They can review information from any source, including international price data, stakeholder consultations or disclosures and reports, research papers, and open source intelligence by country of origin, as well as look at manufacturing and assembly costs.
Finally, they will issue a report indicating whether the value of the product is underestimated, and make detailed recommendations to Indian Customs.
India’s Central Board of Indirect Taxes and Customs (CBIC) will issue a list of “identified goods” whose true value will be subject to greater scrutiny.
Importers will have to provide additional information in the Customs Automated System when submitting entry slips for “Identified Goods”, and if breaches are found, further proceedings will be initiated under the Customs Valuation Rules 2007.
Enterprises exporting to India must pay attention not to invoice less!
This kind of operation is actually not new in India. They used similar means to recover 6.53 billion rupees of taxes from Xiaomi as early as the beginning of 2022. At that time, they stated that according to an intelligence report, Xiaomi India evaded tariffs by underestimating the value.
Xiaomi’s response at the time was that the root cause of the tax issue was the disagreement among various parties on the determination of the price of imported goods. Whether royalties including patent license fees should be included in the price of imported goods is a complicated issue in all countries. Technical problems.
The truth is that India’s tax and legal system is too complicated, and taxation is often interpreted differently in different places and different departments, and there is no harmonization among them. In this context, it is not difficult for the tax department to detect some so-called “problems”.
It can only be said that there is nothing wrong with wanting to add a crime.
At present, the Indian government has formulated new import valuation standards and has begun to strictly monitor the import prices of Chinese products, mainly involving electronic products, tools and metals.
Enterprises exporting to India must pay attention, do not under-invoice!
Post time: Jul-20-2023