CBIC to float new norms to end undervaluation of imported goods

Some of the categories that will see these norms coming in first, according to the sources, include consumer goods, readymade apparel, toys, furniture, pens, perfumes, watches, cosmetics, handbags, footwear, food products ranging from chocolates to candy and fresh agriculture produce.

At present, the CBIC accepts the transaction value if it matches the value of similar goods imported in the past.

But the CBIC has decided to change the system after coming across serious violations by importers, large companies, wholesalers, etc., the sources said. They said the new provision would prevent such players from avoiding duty payments by undervaluing imported goods.

In this regard, the government would amend Section 14 of the Customs Act to give additional powers to the Customs department.

According to recent analysis and consultations, "the Customs department will identify several such items that will be subject to additional controls from the point of view of valuation and will be under closer surveillance," a senior government official told CNBC-TV18.

Citing an example, a senior official said if chocolates and candy are placed under surveillance after consultations with the industry, the Customs department may prescribe an expected declared value in line with the price of comparable goods.

So, if a transaction happens below that price under the new norms, the importer would have an additional responsibility to declare that the prices are not undervalued or manipulated.

"The Customs department will ensure that these valuation provisions are based on global best practices to avoid disparity," the sources said.

How soon these norms would come into effect is still not clear.