In exercise of the powers conferred by Section 156 of the Customs Act, 1962 (52 of 1962), read with Section 22 of the General Clauses Act, 1897, (10 of 1897), and in supersession of the Customs Valuation Rules, 1963 except as respect things done or omitted to be done before such supersession, the Central Government hereby makes the following rules, namely: -

1. 

Short title, commencement and application. -

(1)

These rules may be called the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988.

(2)

They shall come into force on the 16th August, 1988.

(3)

They shall apply to imported goods where a duty of customs is chargeable by reference to their value.

2. 

Definitions. —

(1)

In these rules, unless the context otherwise requires, —

(a)

"computed value" means the value of imported goods determined in accordance with rule 7A of these rules;

(aa)

"deductive value" means the value determined in accordance with rule 7 of these rules;

(b)

"goods of the same class or kind", means imported goods that are within a group or range of imported goods produced by a particular industry or industrial sector and includes identical goods or similar goods;

(c)

"identical goods" means imported goods -

(i)

which are same in all respects, including physical characteristics, quality and reputation as the goods being valued except for minor differences in appearance that do not affect the value of the goods;

(ii)

produced in the country in which the goods being valued were produced; and

(iii)

produced by the same person who produced the goods, or where no such goods are available, goods produced by a different person, but shall not include imported goods where engineering, development work, art work, design work, plan or sketch undertaken in India were completed directly or indirectly by the buyer on these imported goods free of charge or at a reduced cost for use in connection with the production and sale for export of these imported goods;

(d)

"produced" includes grown, manufactured and mined;

(e)

"similar goods" means imported goods -

(i)

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 with the goods being valued having regard to the quality, reputation and the existence of trade mark;

(ii)

produced in the country in which the goods being valued were produced; and

(iii)

produced by the same person who produced the goods being valued, or where no such goods are available, goods produced by a different person, but shall not include imported goods where engineering, development work, art work, design work, plan or sketch undertaken in India were completed directly or indirectly by the buyer on these imported goods free of charge or at a reduced cost for use in connection with the production and sale for export of these imported goods;

(f)

"transaction value" means the value determined in accordance with Rule 4 of these rules.

(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 5 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.

Explanation I. - 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, however 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.

3. 

Determination of the method of valuation. —For the purpose of these rules, -

(i)

the value of imported goods shall be the transaction value;