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Chapter-5

Chapter-5

Provisions Relating to Determination of Customs Value

13. Bases for determination of customs value of goods to be imported :

(1) The rules on customs valuation, annexes and explanatory notes set forth in the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 shall be pursued in determining the customs value of imported goods.
(2) The customs value of goods to be imported shall be determined on the basis of the transaction value of such goods, subject to Sub-section (1).
(3) The importer shall declare the transaction value, attaching therewith the description and documents proving the value of goods imported..
(4) If the transaction value declared by the importer pursuant to Sub-section (3) is in conformity with Sub-section (1), the Customs Officer shall determine the customs value of the goods on the basis of such transaction value. If such transaction value does not appear to include freight, insurance and other related expenses, the Customs Officer
shall determine the transaction value by adding an estimated amount likely to be incurred for the same.
(5) The Director General may prescribe bases for fixing the estimated amount referred to in Sub-section (4).
(6) If there is a reasonable ground to believe that the value declared by the importer pursuant to Sub-section (3) is doubtful, the Customs Officer may ask the importer to produce additional documents or
evidence in writing to prove that such value is the actual transaction value. It shall be the responsibility of such importer to provide documents so asked.
(7) If the customs value of any goods cannot be determined on the basis of the transaction value declared by the importer pursuant to Sub- section (3) or the bills, invoices and documents submitted by the importer, the Customs Officer shall give a notice, accompanied by the reason for the same, to the concerned importer.
(8) If the customs value cannot be determined on the basis of the transaction value pursuant to Sub-section (2), the customs duty of such goods shall be determined on the basis of the transaction value of identical goods already imported into Nepal prior to the import of such goods. Explanation: For the purposes of this Section, “identical goods” means goods which are the same in all respects, including physical characteristics, quality and reputation.
(9) If the customs value cannot be determined on the basis of the transaction value of identical goods pursuant to sub-section(8), the customs duty of such goods shall be determined on the basis of the transaction value of similar goods already imported into Nepal prior to the import of such goods. Explanation: For the purposes of this Section, “similar goods” means goods which, although not alike in all respects, have like characteristics and like component materials which enable them to perform the same functions and to be commercially interchangeable.
(10) If the customs value cannot be determined on the basis of the transaction value of similar goods pursuant to Sub-section (9) and such goods have already been imported into Nepal and sold at market to a person who is not related to the importer, the customs value of such goods shall be determined on the basis of deductive value method, by deducting the tax, duty levied in Nepal on the selling price of each unit of the maximum unit so sold, and other related costs and profits.
(11) If the customs value cannot be determined pursuant to sub- section (10), the customs value shall be determined on the basis of computed value method, also calculating the costs incurred in the production or manufacturing of such goods and profits made or likely to be made by the seller while selling such goods to the importer.
(12) If the customs value cannot be determined pursuant to sub- section (11), the Customs Officer shall so determine the customs value of such goods on a reasonable basis as not to be contrary to the provisions of sub-sections (2), (8), (9) and (10).
(13) Notwithstanding anything contained in sub-sections (10) and (11), if the importer makes a request for the determination of customs value by adopting the procedures set forth in Sub-section (11) prior to adopting the procedures set forth in Sub- section (10), the Customs Officer may determine the customs value in accordance with the provisions of Sub-section (11).
(14) Notwithstanding anything contained elsewhere in this Section, if the owner of the goods imported under the Luggage and Baggage Order for personal purposes or the goods received as a gift or specimen/model and imported from a foreign country makes an application for the valuation of such goods, showing the reason for failure to indicate the transaction value thereof and if the Customs Officer considers the matter to be appropriate, he or she may determine a reasonable customs value of such goods.
(15) If the value declared by an importer pursuant to Sub-section (3) is less than the customs value determined by the Customs Officer pursuant to this Section, the Customs Officer may do the following in relation to such goods:
(a) Clearing such goods by collecting fifty percent additional customs duty on such difference value, or
(b) With the prior approval of the Director General, purchasing, or causing to be purchased, such goods in a manner to pay the amount to be set by adding five percent amount to the value so declared to the importer.
(16) In determining the customs value of goods in accordance with the provisions of this Section, the customs value shall normally be determined in a foreign currency. Where the valuation of goods on which the duty has to be paid at the time of import is made in a foreign currency, the conversion of such currency into Nepalese rupees shall be made according to the selling rate of foreign currency which is prescribed by the Nepal Rastra Bank and prevailing on the day of customs clearance of such goods. In the case of a foreign currency of which exchange rate is not prescribed by the Nepal Rastra Bank, such foreign currency shall be converted into American dollars, and the selling rate of American dollars shall be taken as the basis. Provided that in converting the customs value of the goods of which duty is paid subsequent to the importation thereof under the diplomatic facility, duty facility or full or partial exemption of duty, such conversion shall be made according to the selling rate of foreign currency which is prescribed by the Nepal Rastra Bank and prevailing on the day of payment of the remaining duty.

14. Power to determine customs value provisionally :

(1) Notwithstanding anything contained elsewhere in this Act, the Customs Officer may, subject to Section 13, determine a reasonable provisional customs value of imported goods if:
(a) The importer makes an application, along with a reasonable grownds, that he or she is not able to forthwith
provide necessary documents and other related information as required for the valuation of goods,
(b) the customs value has to be or can be determined only after carrying out the laboratory test or other examination of goods or there appears a need to make further inquiry into the documents and information provided by the importer.
(2) Where, after the determination of provisional customs value in accordance with the provisions of Sub-section (1), the importer wishes to clear the goods by furnishing a deposit of the duty chargeable on such goods, the Customs Officer shall make clearance of such goods.
(3) The Customs Officer shall determine the customs value of the goods under the provisions of Section 13 no later than thirty days after the date of determination of the provisional value pursuant to Sub-section (1).
(4) If the customs value determined pursuant to Sub-section (3) is more than the provisional customs value determined pursuant to Sub-section
(1), the Customs Office shall recover from such importer the duty chargeable on such excess value, and if it is less than that, the duty collected in excess shall be refunded to the importer.

15. Power to fix estimated amount of freight, insurance or other related costs :

(1) Where, owing to a circumstance beyond his or her control, an importer is not able to forthwith submit documents of cost, insurance or related costs incurred in the importation of any goods, the importer may submit an application, accompanied by the reason for the same, to the Customs Officer for the fixation of the estimated amount of such freight, insurance or other related expenses.
(2) Where, in inquiring into the application referred to in sub- section
(1), the contents appear to be reasonable, the Customs Officer may fix the estimated amount for freight, insurance or other related expenses likely to be included in the transaction value of such goods.
(3) The concerned importer shall submit documents and evidence relating to the actual freight, insurance and other related expenses no later than ninety days after the date of fixation of the estimated amount of freight, insurance or other related costs pursuant to Sub-section (2). If the amount set forth in the documents and evidence so submitted is more than the estimated amount fixed pursuant to Sub-section (2), the importer shall pay the duty chargeable on such excess value, and if it is less than that, the Customs Office shall refund the remaining amount, upon deduction of the chargeable duty, to the importer.
(4) Where the concerned importer fails to submit documents and evidence within the period referred to in Sub-section (3) or unless it is proved otherwise, the estimated amount fixed by the Customs Officer pursuant to Sub-section (2) shall be considered as the final amount of such freight, insurance or other related costs.

16. Determination of customs value of goods to be exported :

(1) The invoice value declared by an exporter shall be the customs value of the goods to be exported.
(2) Notwithstanding anything contained in Sub-section (1), the Government of Nepal may, if considers necessary, determine separate customs value of any goods of specific nature to be exported, by notification in the Nepal Gazette. Where separate customs value is so determined, the customs value of such goods shall be the invoice value declared by the exporter or the customs value so determined by the Government of Nepal, whichever is higher.
(3) The customs value referred to in Sub-section (1) or (2) shall be the free on board (FOB) value. Explanation: For the purposes of this sub-section, “free on board (FOB) value” means a value which includes the factory price of the goods to be exported and costs incurred in Transportation of such goods up to the concerned Customs Office of Nepal. (4) The value of goods to be determined pursuant to this Section shall be determined in foreign currency. Such foreign currency shall be converted into the Nepalese rupees according to the buying rate of foreign currency which is prescribed by Nepal Rastra Bank and prevailing on the day of clearance of such goods.

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