Every country has a specific set of rules and regulations regarding customs valuation in the importation of goods on their border. Similarly, every country also has a basic or general guideline for the determination of the valuation of goods for the importers. However, these rules or guideline is prepared as per the directive prescribed and agreed upon by the WTO or the World Trade Organisation. Contact Clearit customs brokerage for necessary assistance in your determination of custom valuation for your goods in your importation.
The determination of customs valuation is done through six basic methods. You need to know these methods in order to effectively determine the customs valuation of your good while importation. Know the methodologies in brief below:
- Transaction value: The method of transaction value is commonly used by the importers while determining the valuation of their goods ensuring consideration of adjustments. There are two basic components in transaction value, (1) the price paid, and (2) the price payable. The price paid is the total payment that is paid directly or indirectly by the buyer to the supplier. The price payable is the total price to be paid or owed by the buyer to the supplier.
- Transaction value of identical goods: The appraised goods are called identical goods. There is one exception and that is the minor difference in appearance of goods. However, this difference in appearance does not affect the value of goods. When you cannot use the transaction value, you should determine the value of your goods based on the established value of the goods identical to your goods.
- Transaction value of similar goods: In the case of your failure in determining the value of your goods under the above two methods of valuation, you should opt for the transaction value of similar goods. In order to qualify with this methodology, your goods must be similar and like the goods which have established value. Therefore, your goods must be resembling same to the established goods, must function same as the established goods, your goods must be commercially exchangeable with the established goods, and produced by the same country and same manufacturer.
- Deductive method of valuation: If the above methods fail, you can consider this method which is based on the common price of the Canadian importers for their goods.
- Computed method of valuation: The total cost of the production of the imported goods, along with general expenses and profit is called the computed value of the goods. In the computed method of valuation, these costs are taken into consideration.
- Residual method of valuation: This method is determined on the basis of market reality and adjustment of the least amount.