Royalty Payments: Not a Condition for Import Value? Ajinomoto Case Clarifies Customs Valuation Rules.

The case involves the valuation of imported goods and whether royalty payments should be included in determining their transaction value. Initially, the importer's declared transaction value was accepted under the Customs Valuation Rules 2007. However, authorities later argued that royalty payments to a group company for trademark use should be included. The appellant argued these payments were not a sale condition. The CESTAT, referencing a Supreme Court decision, found the authorities lacked jurisdiction to classify the repackaging process as manufacturing and concluded the royalty payment was not a sale condition. The appeal was allowed, and the prior order was set aside. .....

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