We are small importers of products requiring no import
licence under general category.
These products are imported in bulk in lose then packed in our own branded pack
and sold to distributors & wholesalers (we do NOT sell directly to end
users) with MRP stickers. There is no processing of these products in India;
simply they are packed in India. So, no excise duty is applicable.
We offer bulk purchase discount 62-75% on MRP to our distributors/wholesalers. They in turn sell to retailers who finally sell to consumers at MRP or less (MOP).
Recently, we are being harassed by customs who argue that our import price is too low vis-à-vis MRP. Has to be paid on MRP and not on invoice value. We must clarify that we remit foreign exchange through our bank and then submit Bill of entry (obtained form our air couriers) tour bankers within 90 days from the date of import.
Our submission to customs: we are not selling directly to consumers; we offer up to 75% discount to our buyers, our net realisation is not more than 25% of MRP and marketing expenses apart from duty, octroi in Mumbai, air freight, packing cost.
Our questions:
- Can customs charge duty on MRP of products sold by us even though we are not directly selling to end consumers???
- If yes, what is the basis or formula under which this is done??? Pls give relevant rules.
- If not, what rules can we quote under the custom rule???
