Rules 7 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.
Rules 7, 8 and 9 are the later rungs of the valuation ladder. Deductive value works backwards from the price at which the goods are resold in India. Computed value builds up the price from the producer's costs. The residual method is the last resort and comes with a list of values that may never be used. Our compliance advisory team can help you see which method fits your records.
This article is written as amended up to Notification No. 91/2017-Customs (N.T.) dated 26 September 2017 (CBIC text; no later amending notification found). Later notifications should be checked; no official consolidated text exists beyond the CBIC text.
Rule 7 takes the unit price at which the goods are sold in India in the greatest aggregate quantity to unrelated buyers, less listed deductions. Rule 8 adds up materials and processing, profit and general expenses, and the rule 10(2) costs. Rule 9 allows reasonable means on data available in India, but never on any of seven prohibited bases. Under rule 6 the importer may ask for rule 8 before rule 7.
Rule 7: deductive value
Rule 7(1): sold in India as imported
Subject to rule 3, if the goods being valued, or identical or similar imported goods, are sold in India in the condition as imported at or about the time the declaration for determination of value is presented, the value is based on the unit price at which they are sold in the greatest aggregate quantity to persons who are not related to the sellers in India. Three deductions follow:
| Clause | Deduction |
|---|---|
| (i) | Either the commission usually paid or agreed to be paid, or the additions usually made for profits and general expenses in connection with sales in India of imported goods of the same class or kind |
| (ii) | The usual costs of transport and insurance and associated costs incurred within India |
| (iii) | The customs duties and other taxes payable in India by reason of importation or sale of the goods |
The rule as printed has three clauses, (i) to (iii).
Rule 7(2): the ninety-day window
If neither the imported goods nor identical or similar goods are sold at or about the time of importation, the value is based on the unit price at which they are sold in India "at the earliest date after importation but before the expiry of ninety days after such importation."
Rule 7(3): further processing
If the goods are not sold in India in the condition as imported, the value is based on the unit price at which they are sold, after further processing, in the greatest aggregate quantity to persons not related to the seller in India. Under clause (b), due allowance is made for the value added by processing and for the deductions in items (i) to (iii) of sub-rule (1).
Example: Lakshmi Foods imports bulk spice blend, grinds and packs it, then sells packets to unrelated wholesalers. If the greatest quantity of packets is sold at one unit price, rule 7(3) starts from that price, allows for the value added by grinding and packing, and makes the three deductions.
Rule 8: computed value
Subject to rule 3, the value is a computed value, being the sum of:
- (a) the cost or value of materials and fabrication or other processing employed in producing the imported goods;
- (b) an amount for profit and general expenses equal to that usually reflected in sales of goods of the same class or kind made by producers in the country of exportation for export to India; and
- (c) the cost or value of all other expenses under sub-rule (2) of rule 10.
Computed value needs cost data from outside India, so it is workable mainly when the producer cooperates. Rule 6 allows the importer to request that rule 8 be applied before rule 7; see our article on rules 4 to 6.
Rule 9: residual method
Rule 9(1): reasonable means
Where the value cannot be determined under any of the preceding rules, subject to rule 3, it is determined "using reasonable means consistent with the principles and general provisions of these rules and on the basis of data available in India."
Proviso. The value so determined shall not exceed the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation in the course of international trade, when the seller or buyer has no interest in the business of the other and price is the sole consideration for the sale or offer for sale.
Rule 9(2): what cannot be used
No value shall be determined under rule 9 on the basis of:
- the selling price in India of goods produced in India;
- a system which provides for the acceptance for customs purposes of the highest of two alternative values;
- the price of the goods on the domestic market of the country of exportation;
- the cost of production other than computed values determined for identical or similar goods under rule 8;
- the price of the goods for export to a country other than India;
- minimum customs values; or
- arbitrary or fictitious values.
Using the three rules in practice
- Rule 7 needs sales records in India, so a trading importer who resells the same goods can usually supply them; a first-time importer of a new product cannot.
- Rule 8 needs the producer's costings. Ask early whether the foreign supplier will provide them.
- Rule 9 is not an open choice of method: it is bounded by the rules and by the seven exclusions. For the notes that explain how flexibly rule 9 can use the earlier methods, see our article on the interpretative notes.
For the costs that rule 8(c) picks up, our article on rule 10 lists them. Our guide to customs valuation and the Rules gives a wider overview.
Need help with a value that has been re-determined?
If customs has re-determined your value under rule 7, 8 or 9, we can check the method against the text, including the deductions and the prohibited bases. Contact our compliance advisory team.
Key takeaways
- Deductive value starts from the greatest aggregate quantity sold in India to unrelated buyers.
- Rule 7 has three deductions, a ninety-day window and a further-processing variant.
- Computed value adds production cost, usual profit and general expenses, and rule 10(2) costs.
- Rule 9 allows reasonable means on data available in India, capped by the proviso.
- Seven bases, including minimum customs values and arbitrary or fictitious values, are barred.
Read next
- Rules 4 to 6: identical goods, similar goods and the order of methods
- Rule 10: additions to transaction value
- Rule 13: the interpretative notes
- Rule 3: transaction value and related-party sales
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.