FAQ to Fill Value Declaration Form

What is buying Commission?

The fees paid by an importer to his agent for the services of representing the importer abroad in the purchase of the goods that are imported.

What is selling Commission?

The fees paid by an importer to the seller's agent who generally acts for the seller seeking for the seller's goods.

What is brokerage?

Broker acts for both seller and the importer to put both parties in touch with each other. The broker’s payment is known as brokerage.

What Commissions and brokerage are required to be added to the price of the imported goods?

Only the buying commission is not required to be added to the price of the imported goods. Selling commission and brokerage should be added to the price of imported goods for Customs purposes.

Are there any instances where the cost of containers are not included in the price of the imported goods?

Yes. There are instances such as when the imported goods are loaded in special containers. And the cost of those special containers are not included in the invoice price then such costs should be included in the value for Customs purposes.

Ex: Company ‘A’ in Sri Lanka imports Oxygen from Company ‘B’ in France. To import the goods to Sri Lanka ‘A’ or ‘B’ has to hire an especially designed container. If such, hire charge is not included in the invoice, then that hire charge should form part of the Customs value.

Are there any instances where the cost of packing whether for labour or materials are not included in the price of the imported goods?

Yes. There are instances when the imported goods are especially packed resulting additional costs for labour and materials. If the cost for such labour and materials are not included in the invoice price then that cost for such labour and materials should form part of the Customs value.

What are the common special containers or packages?

Bubble packs, blister packs, shredded paper, metal box, wooden crates, etc.

Ex: Company ‘A’ in Sri Lanka imports Rice from Company ‘B’ in India. ‘A’ sends empty Rice bags from Sri Lanka to ‘B’ to pack Rice. The total cost to pack rice bags should be added to the price of the rice.

What is the cost of goods and services supplied by the buyer (production assists)?

Production assists are goods and services that are supplied directly or indirectly by the buyer of the goods to the seller, free of charge or at a reduced cost, for use in connection with the production and/or sale for exports of the imported goods to the port of Sri Lanka.

Are production assists required to be added to the price of imported goods?

Yes, if it is not included in the invoice it should be added to the price of imported goods for Customs purposes

What are the different categories of production assists?

(i) materials, components, parts and similar items incorporated in the imported goods;
(ii) tools, dies, moulds and similar items used in the production of the imported goods;
(iii) materials consumed in the production of the imported goods;
(iv) engineering, development, artwork, design work, and plans and sketches undertaken elsewhere than in the country of importation and necessary for the production of the imported goods

What are Royalties and License Fees?

Royalties and License Fees are payment of any kind received as a consideration for the use of, or the right to use, any copyright of literacy, artistic or scientific work, including cinematography films, any patent, trade mark, design or model, plan, secret formula or process; any industrial, commercial or scientific equipment; or any information concerning industrial, commercial or scientific experience.

Are Royalties and License Fees considered as a part of the value for Customs purposes?

If the payment of Royalties and License Fees fulfills the following four conditions then it should be included in the value for Customs purposes,

  • the fees should be paid by the buyer either directly or indirectly
  • the payment should be related to the imported goods that are being valued
  • the payment is not included in the price paid or payable for the imported goods
  • the payment is made as a condition of sale of the imported goods that are being valued

Ex: Company ‘A’ in Sri Lanka purchases branded toys from Company ‘B’ in France. ‘B’ is the brand owner of the toys. In addition to the price of the toys, ‘A’ shall pay a license fee calculated as a percentage of net selling price of the toys according to the license agreement between ‘A’ and ‘B’. The amount of license fee should form part of the Customs value.

What is meant by the value of proceeds accrued to the seller?

Any part of the proceeds of any subsequent re-sale, disposal or use of the imported goods that accrues directly or indirectly to the seller

Should the value of proceeds accrued to the seller be considered as a part of the value for Customs purposes?

Yes, proceeds accrued to the seller should be considered.

Example: Corporation C of Country X owns a number of subsidiaries in different countries, all of which operate in accordance with corporate policies established by C. Some of these subsidiaries are manufacturing enterprises, others are wholesalers and still others are service oriented enterprises.

Importer I in the Country of importation Y, a subsidiary of C is a wholesaler of men’s, women’s and children’s garments; he buys men’s garments from manufacturer M, another subsidiary of corporation C also located in country X, and women’s and children’s garments from unrelated manufacturers of third countries as well as from local manufacturers.

In accordance with C’s corporate policy concerning sales between subsidiaries, goods are sold at a price negotiated between subsidiaries. However, at the end of the year, importer I will pay to manufacturer M 5% of the total annual resale of the men’s garments which he buys from him during that year as a further payment for the goods.

In this case, the payment in question is a proceeds of a subsequent resale of the imported goods which accrues directly to the seller and the amount is to be added to the price paid or payable as an adjustment under the provisions of Article 8.1 (d).

What is the cost of transport?

Cost of transport generally means the cost of freight. The cost of freight may include loading, unloading and handling charges associated with the transport of the imported goods to the port of Sri Lanka.

Ex: If the invoice is on FOB basis and the B/L is on freight collect basis then freight to the local shipping agent should be included as cost of transport.

What are other transport related charges?

Examples for other transport related charges are loading, unloading, stevedoring charges, demurrage charges and other handling charges associated with the transport of the imported goods to the port of Sri Lanka.

Do I have to declare other transport related charges to the Customs?

Yes, if any of the above mentioned charges are not included in the cost of freight then those changes should be declared to the Customs.

What is Cost of Insurance?

Cost of Insurance is the Insurance paid for the relevant consignment

what will be included in “Any other charges not declared above ?”

In addition if the buyer has incurred any other cost or charge not mentioned above and if they are related to the goods being valued, then those should be included in the Customs Value.

Who are related parties?

As per the Article 9 of the Schedule E of the Customs Ordinance related parties are,

  • They are officers or directors of one another’s business
  • They are legally recognized partners in the business
  • They are employer and employee
  • Any person directly or indirectly owns, controls or holds 5% or more of the outstanding voting stocks or shares of both of them
  • One of them directly or indirectly controls the other
  • Both of them are directly or indirectly controlled by a third person
  • Together they directly or indirectly control a third person; or
  • They are members of the same family

Why is the relationship between buyer and seller required to be declared to the Customs?

Because if the value is influenced by the relationship between buyer and seller it should be declared to Customs

How to fill the “Items” Column in the commodity description table?

This refers to the ‘Item No’ in the CusDec. It is required to select the appropriate ‘Item No’ when declaring a commodity in a row. Each ‘Item No’ shall refer to a HS Code.

How to fill the “Articles” Column in the commodity description table?

Once there is more than one commodity to be declared under the same HS Code, “Articles” column shall be used. As an example, if the selected ‘Item No’ is 1, the first commodity shall be declared as 1 in ‘Article’. for the next row ‘Item No’ is again 1 and the second commodity shall be declared as 2 in ‘Article’ column. Same procedure must be continued until all commodities are declared.

If there are many articles, you have the option of using an excel sheet to upload all details at once to the Asycuda.

How to fill the “Descriptions” Column in the commodity description table?

This refers to the description of the goods that are imported.

All details to perfect this column are given in ‘HS Guide for Value Declaration’. If the respective HS is not found in this guide, it is recommended to follow the “General Guide for Value Declaration”

How to fill the “Brand/ Producer” Column in the commodity description table?

This refers to the Brand/Producer of the goods that are imported.

All details to perfect this column are given in ‘HS Guide for Value Declaration’. If the respective HS is not found in this guide, it is recommended to follow the “General Guide for Value Declaration”

How to fill the “Model” Column in the commodity description table?

This refers to the Model of the goods that are imported.

All details to perfect this column are given in ‘HS Guide for Value Declaration’. If the respective HS is not found in this guide, it is recommended to follow the “General Guide for Value Declaration”

How to fill the “Specification” Column in the commodity description table?

All details to perfect this column are given in ‘HS Guide for Value Declaration’. If the respective HS is not found in this guide, it is recommended to follow the “General Guide for Value Declaration”

How to fill the “CO” Column in the commodity description table?

CO refers to the Country of Origin. Therefore, for each article the Country of Origin shall be declared by selecting from the list of counties.

How to fill the “Quantity” Column in the commodity description table?

Quantity refers to the quantity of goods that are imported.

How to fill the “Inv Value” Column in the commodity description table?

“Inv Value” is the value as per the invoice of the goods that are imported.

How to fill the “Addition” Column in the commodity description table?

‘Addition’ refers to any of the costs and services not included in the invoice in terms of Article 8(1) of schedule E of the Customs Ordinance. These costs and services have been explained in the FAQ for Value Declaration Form.