Rules 1 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Exporters declare a value on every shipping bill, and the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 say how that value is tested. Rules 1 to 3 set the scope, the two defined terms and the first and main method: the transaction value, accepted even between related parties if the relationship has not influenced the price. A new exporter will first need an importer-exporter code, which our IEC registration service covers.
This article is written as amended up to the CBIC text updated 10 October 2017 (no amending notification found). Later notifications should be checked; no official consolidated text exists beyond the CBIC text.
The Export Valuation Rules apply to export goods and have been in force since 10 October 2007. Under rule 3, the value is the transaction value, subject to rule 8 (rejection). It is accepted even where buyer and seller are related, provided the relationship has not influenced the price. If it cannot be determined, rules 4 to 6 apply in sequence.
Rule 1: name, start and reach
The Rules are made by Notification No. 95/2007-Customs (N.T.) dated 13 September 2007 under section 156 read with section 14 of the Customs Act, 1962.
| Sub-rule | Content |
|---|---|
| 1(1) | Short title: Customs Valuation (Determination of Value of Export Goods) Rules, 2007 |
| 1(2) | In force on the 10th day of October, 2007 |
| 1(3) | They apply to the export goods |
Imports are valued under a separate set; our article on rules 1 and 2 of the import rules explains how its definitions differ.
Rule 2: definitions
Rule 2(1): two terms
- "Goods of like kind and quality" means export goods that are identical or similar in physical characteristics, quality and reputation to the goods being valued, and perform the same functions or are commercially interchangeable with them, produced by the same person or a different person.
- "Transaction value" means the value of export goods within the meaning of section 14(1) of the Customs Act, 1962. Our guide to section 14 explains that provision.
Note the contrast with the import rules, which define "identical goods" and "similar goods" separately and add conditions about country and producer. The export rules use one combined term and allow a different producer.
Rule 2(2): related persons
Persons are deemed "related" only if one of eight situations applies, the same eight as in the import rules:
| Clause | Relationship |
|---|---|
| (i) | Officers or directors of one another's businesses |
| (ii) | Legally recognised partners in business |
| (iii) | Employer and employee |
| (iv) | Any person directly or indirectly owns, controls or holds five per cent or more of the outstanding voting stock or shares of both |
| (v) | One directly or indirectly controls the other |
| (vi) | Both directly or indirectly controlled by a third person |
| (vii) | Together they directly or indirectly control a third person |
| (viii) | Members of the same family |
Explanation I: "person" also includes legal persons. Explanation II: persons associated in each other's business as sole agent, sole distributor or sole concessionaire, however described, are deemed related if they also fall within the criteria of sub-rule (2).
For example, Kaveri Handlooms exports bedsheets to a distributor in Dubai whose director is Kaveri's own director. Clause (i) makes them related. That does not by itself reject the price; rule 3(2) asks whether the relationship influenced it.
Rule 3: determination of the method of valuation
| Sub-rule | Text in substance |
|---|---|
| 3(1) | Subject to rule 8, the value of export goods shall be the transaction value |
| 3(2) | The transaction value shall be accepted even where buyer and seller are related, provided that the relationship has not influenced the price |
| 3(3) | If the value cannot be determined under sub-rules (1) and (2), it is determined by proceeding sequentially through rules 4 to 6 |
How this differs from import valuation
The import rules (rule 3) list four conditions and give related-party test values. The export rules are shorter: there is no list of conditions and no test values; the question for related parties is simply whether the relationship has influenced the price. Our article on import rule 3 sets out the longer import test.
The sequence if transaction value fails
The next rungs are rule 4 (comparison with goods of like kind and quality), rule 5 (computed value) and rule 6 (residual method). They are explained in our article on rules 4 to 8, which also covers the exporter's declaration under rule 7 and rejection under rule 8.
Where the declared value fits in an export
The shipping bill carries the exporter's declared value; see our guide to section 50 of the Customs Act on the shipping bill and entry for export. If the officer accepts the value under rule 3, no further method is needed.
Practical points for exporters
- Keep the sale contract, invoice and payment proof; they are the evidence of the transaction value.
- If you export to an associated company abroad, check rule 2(2) and be ready to show the price was not influenced by the relationship.
- Keep records of similar sales to unrelated buyers; they answer a later comparison under rule 4.
- Remember that the value is tested only for customs; other rules, such as foreign exchange or direct tax, have their own tests that are outside these Rules.
Before exporting, an exporter needs an importer-exporter code, and any valuation query should be raised before the shipping bill is filed.
Need help with export valuation?
If you export to related buyers or have received a query on the declared value, we can review your contracts and price evidence. Start with our IEC registration support if you are new to exporting, or ask our team about the valuation point.
Key takeaways
- The Export Valuation Rules apply to export goods from 10 October 2007.
- Two terms are defined: goods of like kind and quality, and transaction value.
- Related persons are deemed so only on one of eight listed grounds.
- The transaction value is accepted between related persons if the relationship has not influenced the price.
- If transaction value fails, rules 4 to 6 apply in sequence.
Read next
- Rules 4 to 8 of the export valuation rules: comparison, computed value and rejection
- Rules 1 and 2 of the import valuation rules
- Section 50 of the Customs Act, 1962: shipping bill
- Section 14 of the Customs Act, 1962: valuation of goods
Disclaimer: Based on the customs rules named above as published on the CBIC Tax Information Portal and, for sets amended since 2023, the amending notifications (read through a TaxClue consolidated reading text; no official consolidated text exists), as consulted on 3 October 2026. Later notifications, rates and the Customs Act, 1962 provisions referred to should be checked. This article is general information, not legal advice; check the official text before acting.