Goods and Service Tax is close to becoming a reality in India. However, till the time it is introduced, we have to grapple with a plethora of indirect taxes in India. As of now, indirect taxes are levied by both the Central (Federal) Government and the respective State Governments.
The various types of indirect taxes are Service Tax on Services, Excise Duty on manufacturing of goods, Customs duty on goods at the point of import, Sales Tax / Value Added Tax (“VAT”) and Central Sales Tax (“CST”) on sale of goods and Entry Tax on entry of goods into a state.
Since these taxes can vary from state to state, management of indirect taxes is a challenging task and one needs experts’ advice to navigate through the complicated maze of this tax structure. The complex and long supply chain of medium to large enterprise pose humongous challenge in the compliance and management of indirect taxes. Our indirect tax professionals have in-depth knowledge of the various laws and regulations pertaining to each state and making you supply chain tax efficient.
We provide the following services to our clients across India.
The Special Valuation Branch (“SVB”) is a unit of the Indian custom authorities that investigates valuation of goods during imports between related parties. A special relationship between an Indian importer and a foreign supplier may impact the transaction price of the import and thereby affect the customs duty imposed on such transaction. SVB’s function is precisely to examine the impact of such relationship on the invoice value of the imported goods.
Under Section 14 of the Customs Act, 1962, customs duty is imposed on the value of the imported goods. If the Indian buyer and foreign supplier are related say as holding and subsidiary the goods may be imported at a discounted price that could be lower than the normal market price. Accordingly, the customs duty imposed will be lower leading to a potential loss in revenue accruing to the authorities. We help organizations understand the criteria laid down in Rule 2(2) to determine if the importer or exporter are related. The Customs Valuation (Determination of Value of Imported Goods), Rules, 2007 (“Rules”) require every importer to furnish information to the custom authorities in a bill of entry on the basis of which the customs duty is assessed. We help organizations file the information on timely basis
We help organizations in following manner:
In India, every import and export transaction requires a clearance from the Customs Department, however, every import and export transaction occurring between related parties requires a clearance from the Special Valuation Branch of Indian Customs Department.
A Special Valuation Branch also known as SVB specializes in investigating the import and export transactions done by Holding/subsidiary companies, sole agents or sole distributor including special features like Collaboration Agreement, Joint VentureAgreement or any other Agreement/contract with the foreign supplier, etc.
Who is required to get registered with SVB?
The parties to the transaction, i.e., if the importer and supplier are related to each other by way of officers or directors of one another’s businesses, employer and employee, legally recognized partners in business, directly or indirectly owns, controls or holds 5 per cent or more of the outstanding voting stock or shares of both of them, directly or indirectly controlled by a third person or members of the same family etc., are required to get registered with SVB.
