SME Chatroom: 'Assessable value can be different from invoice value'

We have imported certain goods where the supplier has given us a 12 per cent discount. The Customs disallowed the discount and charged duty on the full value. We remitted to the supplier the net value after considering the discount. Our bankers now say that as the bill of entry value is more than the amount we have remitted, the balance is outstanding in the IDPMS. How to resolve the issue?

First of all, please note that the invoice value and assessable value are different and the bill of entry has specific provisions to mention these in different places. If you have correctly shown the net value as the invoice value after considering the discount, you can tell your bankers that you have remitted the amount due to the seller and that is the end of the matter.

If you have wrongly shown in the bill of entry the assessable value as the invoice value, i.e. without considering the discount, you may submit your explanation to the bank and request a write-off in the IDPMS the difference between the amount remitted and the amount wrongly shown in the bill of entry as the invoice value. If they cannot act on it, you may ask them to forward your request, along with their recommendation, to the RBI for necessary approval.

We export as well as import samples free of cost. There is no option in the bill of entry to tick NFIE (‘no foreign exchange involved’), whereas this option is available in the export shipping bill. Due to this, these imports are being captured in IDPMS, and shown as outstanding to be paid. How can we tackle this problem?

There is a specific box in the bill of entry for Free of Charge (FOC) imports. You have to tick that box. If you have past matters where you have not done so and the bill of entry is outstanding in the IDPMS, you can explain the matter to your bankers along with suitable evidence to help them close the IDPMS entry.

We are the second beneficiary in a transferred LC. After shipment, we will present LC-compliant documents to our bank that will be sent to the transferring bank, where the first beneficiary will have the option to substitute his invoice for our invoice. Our question is: Whose AD code should we mention in the shipping bill -- that of our bank or of the transferring bank?

The payment from the LC issuing bank will come through the transferring bank. Therefore, you may mention the AD Code of the transferring bank.

We have imported certain goods and cleared them under the India-Asean Free Trade Agreement by submitting the prescribed Certificate of Origin (COO). Does the onus of establishing the genuineness of the manufacturer stated on the COO lie on us?

Yes. You must conduct the basic level of due diligence in accordance with the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020.
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