Special Valuation Branch (SVB Customs) Registration in India

The importers of goods need to comply with the customs valuation rules. The government charges GST as well as the import duty on the imports and therefore, valuation and transaction price plays an important role in determining the accurate duty amounts. However, if the transaction happens between the related parties, then there is a scope for manipulation of the transaction price for the purpose of avoiding duties or for other purposes. This is where the Special Valuation Branch (SVB customs) registration comes into play.

What is (SVB) Special Valuation Branch in Customs?

SVB in customs is a dedicated branch formed for the purpose of investigating the related party transactions in case of import transactions. It determines whether the transaction price of the import transaction is fair and at arm’s length price or not. Following are some of the important terms in this regard:

  • Arm’s Length Price: It is the price at which a transaction is carried out at an uncontrolled environment between the parties that are not related to each other.
  • Related Party: Related party is assigned the same meaning as referred to in Rule 2(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. Related parties mean:
  • Persons having employer-employee relationship
  • they are officers or directors of one another’s businesses
  • they are legally recognised partners in business
  • they are employer and employee
  • any person directly or indirectly owns, controls or holds 5% or more of the outstanding voting stock or shares of both of them
  • one of them directly or indirectly controls the other
  • both of them are directly or indirectly controlled by a third person
  • together they directly or indirectly control a third person or
  • they are members of the same family

Explanation I. - The term "person" also includes legal persons.

Explanation II. - Persons who are associated in the business of one another in that one is the sole agent or sole distributor or sole concessionaire, howsoever described, of the other shall be deemed to be related for the purpose of these rules, if they fall within the criteria of this sub-rule.

When SVB Customs is Not Required?

There are certain situations in which the importers are not required to go for SVB registration even if the goods are imported from related parties. Accordingly, SVB registration is not mandatory in the following cases:

  • Import of prototypes or samples from the foreign suppliers
  • Import of goods where the customs duty is nil or fully exempt without any conditions.
  • Import of goods where the value of the imported goods is less than Rs. 1 lakh and the cumulative value of the goods imported during the financial year does not exceed Rs. 25 lakhs.

SVB Registration Process

You need to get accustomed from the SVB registration in cusotms if you are importing goods from the related foreign suppliers. Here’s how the SVB registration works:

  • When importing the goods, the importer shall file a declaration in Annexure-A while filing the bill of entry along with the supporting documents with the Customs authority.
  • The Proper Officer will examine the situations under which the goods were being imported and the invoice value of the goods.
  • The Proper Officer may ask for further information in Annexure-B following which the importer shall provide all the required information within a period of 60 days. In case the importer fails to reply within a period of 60 days, an additional Extra Duty Deposit can be levied by the proper officer on subsequent import of the goods.
  • The SVB shall complete the investigation based on the information and documents received from the importer and submit its findings to the Principal Commissioner or Commissioner.

What are the Documents Required for SVB Registration in India?

Following are some of the documents required for SVB registration in India:

  • Copies of the relevant bill of entries
  • Sample invoices relating to imports made during the last 3 years
  • Annual report, in case of a company, for the last 3 years
  • Current price list of the goods imported from the foreign supplier
  • Agreement entered into between the importer and the foreign supplier
  • Statements regarding the CIF value for the previous 3 years, certified by a Chartered Accountant, including:
    • Landed cost and the CIF value of the goods imported from the foreign suppliers
    • Landed cost and the CIF value of the goods from other suppliers
    • Ex-factory value of the goods
    • Net and gross royalty, paid or payable
  • Statement of the equity capital held in the foreign company for the last 3 years
  • Statement of the shareholding in the company
  • Particulars relating to the common directors
  • Bill of entries and sample invoices of the imports of similar or identical goods by any other person
  • Payment details along with the remittances for deferred payments
  • Details relating to any other payments being made to or on request of or under the instructions of or on behalf of the supplier.

SVB Customs Branch Locations Across India

The Special Valuation Branches of the customs department is not spread across all the cities. Currently, the customs SVBs are located in only five major cities i.e., Mumbai, Delhi, Kolkata, Chennai and Bangalore. The importers can select the SVB of their choice based on their convenience, however, it is recommended to select the SVB department that is nearest to the registered office of the related importer.

How Exim Advisory Can Help You in Getting SVB Customs in India?

If you are an importer importing goods from related suppliers, ensuring Special Valuation Branch registration and complying with the related procedures is crucial. Having experts by your side to ensure complete documentation and liaising with the appropriate authorities is important to avoid any potential hassles in import transaction. Here’s how the Exim Advisory can help in this regard:

  • Gathering of all the documents required for SVB investigation for imports
  • Preparation and filing of necessary applications, documents and annexures with the relevant authorities
  • Providing required research support to establish that the transaction price conforms to the arm’s length price for the concerned import transaction
  • Liaising with the relevant authorities for speedy disposal of the investigation
  • Assistance in appropriate valuation of the customs goods in line with the applicable rules and regulations

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Frequently Asked Questions

Q: What is the meaning of SVB registration?

A: SVB registration, also known as Special Valuation Branch registration, is constituted by the government to monitor and investigate the transaction of good imported by the Indian importers from their related foreign suppliers. This ensures that there is no manipulation in the transaction price of the imported goods.

Q: Where are SVB customs branch located?

A: Currently, the customs SCB branches are located in only 5 cities i.e., Delhi, Mumbai, Bangalore, Chennai and Kolkata. 

Q: Whether SVB investigation can also be invoked if importer and foreign supplier are not related?

A: No. SVB investigation only takes place if the importer and supplier are related to each other.

Q: What are the different methods used in the valuation of imported goods?

A: The different methods used in the valuation of imported goods include comparison with the similar or identical goods, computed value of imported goods, deductive value of imported goods etc.