Valuation System - Transaction Value

Question 1

It is the set of rules to determine the dutiable value of goods. Applies only to articles subject to ad valorem duty.

Answer 1

Valuation System

Question 2

Principles in the determination of DV.

Answer 2

a. Uniformity and fairness.
b. For customs purposes.
c. Should be of general application.
d. Not be used to combat dumping.

Question 3

The primary method in determining dutiable value.

Answer 3

Transaction Value

Question 4

If the dutiable value cannot be determined with the use of Method 1, what other valuation method should be used? (in sequence)

Answer 4

Method 2 - 6 ( TV Identical goods, TV Similar goods, Deductive value, Computed Value, Fallback value)

Question 5

Method 2

Answer 5

TV Identical goods

Question 6

Method 3

Answer 6

TV Similar goods

Question 7

Method 4

Answer 7

Deductive value

Question 8

Method 5

Answer 8

Computed value

Question 9

Method 6

Answer 9

Fallback value

Question 10

The exception to the sequential rule in the valuation system.

Answer 10

a. Importer may request for the reversal of methods 4 and 5. Provided that the Commissioner will determine if the reversal will not give rise to any difficulties, otherwise the request shall be denied.
b. If the importer will not request, then the normal order shall be applied.

Question 11

It refers to the recognized consensus or substantial authoritative support to which economic resources and obligations should be recorded as assets and liabilities.

Answer 11

GAAP - Generally accepted accounting principles.

Question 12

Who shall accept or deny the request of the importer for the reversal of Method 4 and 5?

Answer 12

Commissioner of Customs

Question 13

BOC shall utilize information prepared in a manner consistent with GAAP, what shall be the appropriate GAAP for Method 4?

Answer 13

PH GAAP

Question 14

BOC shall utilize information prepared in a manner consistent with GAAP, what shall be the appropriate GAAP for Method 5?

Answer 14

GAAP for the country of exportation

Question 15

BOC shall utilize information prepared in a manner consistent with GAAP, what shall be the appropriate GAAP for the determination of assist?

Answer 15

PH GAAP

Question 16

Methods in the use of Method 1: Transaction Value

Answer 16

1st - Conditions shall be fulfilled; if (1) condition is not fulfilled go to next valuation.
2nd - Determine the PAPP and costs that are in included in PAPP
3rd - Determine adjustments (mandatory additions) - that should be added to PAPP
4th - Post importation charges/permissible deductions.

Question 17

Conditions the must be FULFILLED in order to use Method 1:

Answer 17

a. There must be sales for export to the PH
b. No restriction as to the disposition of except restrictions.
c. No consideration or condition for which value cannot be determined.
d. No subsequent proceeds of sale accrue to the benefit of the seller.
e. Relationship must not influence the price

Question 18

Under condition 1, what kind of transactions may be used in valuing merchandise under the transaction value method?

Answer 18

Actual international transfer of goods.

• from a foreign country to the PH
• sale from freezone

Question 19

Under condition 1 of the TV, what shall be the amount used in order to determine the TV from goods imported in Free Zone?

Answer 19

Sale of imported raw materials shall be admitted.

Question 20

How SALE is described?

Answer 20

a. commercial operation which involves a buyer and a seller.
b. buyer agrees to obtain certain goods while seller agrees to supply certain goods.
c. change of ownership

Question 21

Examples of NO SALE in an international transaction.

Answer 21

a. Free consignments
b. Goods imported by intermediaries
c. Goods imported by branch office
d. Goods under hire or leasing contract
e. Goods supplied on load.
f. Good imported on consignment.
- raw materials or equipment sent to the importer for use in the manufacture of goods for export.

Question 22

Allowed restriction as to goods disposition.

Answer 22

a. Imposed or required by law. (Should secure necessary permits from government agency concern)
b. Limit the geographical area.
c. Do not substantially affect the value of the goods.