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Transfer Pricing and Customs Valuation - WCO's new Tool


Juxtaposing TP and Customs Value

In the diagram given in the article, there is also a diagonal relationship. If the TP is higher, it willincrease the input cost of the importer and reduce direct tax liability of the importer. But, it will also increase the indirect tax liability in the transferee country, as the customs duty would be paid on higher declared value. The converse is also true. If the TP is proper and unobjectionable to the TP Officer, it may be disputed by the Revenue as low, and is liable to be enhanced based on contemporaneous imports. Thus, what the Revenue loses under one law would be gained under another law - at least substantially. As an aside, I would add that SVB is an extralegal body, which meddles in the assessment of imports. SVB is not the proper officer as defined in section 2(33) of the Customs Act, 1962, nor does the Board have statutory authority to provide for determination of value of imports by a body which is not the proper officer as defined under law.

Gururaj B N 16/09/2015

 

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