First Sale Valuation

Customs

Customs valuation using the price at the first sale (manufacturer to trader) rather than the last sale.

Sources

1. Central Board of Indirect Taxes and Customs — The Customs Act, 1962 (as amended to 30 March 2022) taxinformation.cbic.gov.in accessed 23 September 2026

Indian customs valuation starts from transaction value, and section 14 says so directly: the value of imported and export goods “shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation”, where “the buyer and seller of the goods are not related and price is the sole consideration for the sale”. Those two conditions are what disputes turn on. The proviso then adds back a long list to the price: “any amount paid or payable for costs and services, including commissions and brokerage, engineering, design work, royalties and licence fees, costs of transportation to the place of importation, insurance, loading”. A first-sale argument — valuing an earlier sale in a chain — has to satisfy the statutory test that the sale relied on was a sale for export to India, and survive the related-party and sole-consideration conditions.

Primary legislation, and only that. The text quoted above is the Customs Act, 1962 as published by CBIC and amended to 30 March 2022. The Act repeatedly leaves the operating detail to rules, regulations and notifications — forms, rates, qualifications, time limits — so the statute tells you what is required and the subordinate instrument tells you how. Check the current rules and any later amendment before relying on a procedure, and remember that a figure or a rate in a notification changes far more often than the section that authorises it.

Related terms

• Advance Authorisation
• Anti-Dumping Duty
• ATA Carnet
• Authorised Economic Operator
• Bill of Entry
• Binding Tariff Information

From the AJG lexicon archive (July 2026).