According to China’s export data, the trade volume with India in the first nine months of 2022 was 103 billion US dollars, but India’s own data shows that the trade volume between the two sides is only 91 billion US dollars.
The disappearance of $12 billion has attracted India’s attention.
Their conclusion is that some Indian importers have issued lower invoices to avoid paying import taxes.
For example, the Indian Stainless Steel Development Association reported to the Indian government as follows: “A large number of imported 201 grade and 201/J3 stainless steel flat rolled products are cleared at much lower tax rates at Indian ports because importers declare their goods as’ J3 grade ‘through minor changes in chemical composition
Since the last week of September last year, Indian customs authorities have issued notices to 32 importers, suspecting them of evading taxes by issuing low invoices between April 2019 and December 2020.
On February 11, 2023, India’s “2023 Customs (Assistance in Value Declaration of Identified Imported Goods) Rules” officially came into effect, which were introduced for low invoicing and require further investigation of imported goods with undervalued values.
This rule sets up a mechanism to regulate goods that may have low invoicing, requiring importers to provide specific details of proof, and then their customs to evaluate the accurate value.
The specific process is as follows:
Firstly, if a domestic manufacturer in India feels that their product prices are affected by undervalued import prices, they can submit a written application (which can actually be submitted by anyone), and then a specialized committee will conduct further investigation.
They can review information from any source, including international price data, stakeholder consultation or disclosure and reports, research papers and Open-source intelligence from the source country, as well as the cost of manufacturing and assembly.
Finally, they will issue a report indicating whether the product value has been underestimated and provide detailed recommendations to Indian customs.
The Central Indirect tax and Customs Commission (CBIC) of India will issue a list of “identified goods” whose true value will be subject to more stringent scrutiny.
Importers must provide additional information in the customs automation system when submitting the entry form for “identified goods”. If any violations are found, further litigation will be filed in accordance with the 2007 Customs Valuation Rules.
At present, the Indian government has established new import valuation standards and started to strictly monitor the import prices of Chinese products, mainly involving electronic products, tools, and metals.
Post time: Jul-17-2023