How does Customs calculate the Assessable Value for Customs Duty/Import duty? How does Customs calculate Supplementary duty?
(A) Assessable value for Customs duty = Assessable value of goods for the purpose of assessing the amount of Customs Duty is calculated in the following way:
First, the CIF Value is determined = Cost (price actually paid or payable)+ Freight (if not known, 20% of FOB value) + Insurance cost (if actual insurance cost is not known, it is 1% of C& F value)
Then landing charge is added with the CIF value. Landing charge is assessed as 1% of CIF value
Example: For a certain import, let C&F cost = Tk. 100
Insurance cost = Tk. 1 (1% of C&F) or actual
CIF cost = Tk. 101 (C&F + Insurance)
Landing charge = Tk. 1.01 (1% of CIF)
Assessable value = Tk. 102.01
Now, if the Customs Duty rate is 10%, then Customs Duty will be 10% of Tk. 102.01, which is Tk. 10.20
(B) Supplementary Duty (SD): Like VAT, Supplementary Duty (SD) is calculated on a cumulative basis. In other words, SD is computed on the duty paid value.
Therefore, the basis for calculation of SD will be: Assessable value + Customs Duty + Regulatory Duty (if any).
Example: if SD rate is 25%, the basis for calculation of SD in the previous example will be as follows:
102.01 (Assessable value) + 10.20 (Customs Duty at the rate of 10% flat rate) + 4.08 (Regulatory Duty at the rate of 4% flat rate) = Tk. 116.29
The computed value of SD will be: 116.29 * 25% = Tk. 29.0725