Section 14 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.
Section 14 decides the value on which customs duty is charged. The starting point is the transaction value: the price actually paid or payable for the goods when sold for export to India, or for export from India. Sub-section (2) lets the Board fix tariff values instead.
This article follows the text on the CBIC portal updated to 30 March 2022 (the Act as amended up to the Finance Act, 2022). Please check any later Finance Act changes to this section before acting.
The value of imported goods and export goods is the transaction value: the price actually paid or payable when the buyer and seller are not related and price is the sole consideration, subject to conditions in rules. For imports, specified costs and services are added. The price is converted at the rate of exchange in force on the date the bill of entry or shipping bill is presented. Where the Board fixes tariff values, duty is charged on those.
Sub-section (1): the transaction value
For the purposes of the Customs Tariff Act, 1975 (51 of 1975) or any other law for the time being in force, the value of the imported goods and export goods is the transaction value of such goods. The text defines it as the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, or, as the case may be, for export from India for delivery at the time and place of exportation. Two conditions are written in: the buyer and seller are not related, and price is the sole consideration for the sale. The valuation is also "subject to such other conditions as may be specified in the rules".
The footnote shows section 14 was substituted by Act 22 of 2007 (section 95) with effect from 10 October 2007. The text printed in the copy is the substituted section.
If you have a valuation query that could affect many shipments, a legal consultation can help you test your pricing and documents against the section before a bill of entry is filed.
What is added for imports: the first proviso
The first proviso says that the transaction value in the case of imported goods includes, in addition to the price, any amount paid or payable for costs and services, to the extent and in the manner specified in the rules. The text lists:
- commissions and brokerage;
- engineering and design work;
- royalties and licence fees;
- costs of transportation to the place of importation;
- insurance;
- loading, unloading and handling charges.
The invoice price is therefore a starting point. An importer who pays a buyer's commission, a royalty or freight to the place of importation may find those amounts brought into value, to the extent and in the manner the rules specify. This article gives no figures and no method beyond the text.
What the rules may provide: the second proviso
The second proviso says the rules may provide for the following.
| Clause | Subject of the rules |
|---|---|
| (i) | The circumstances in which the buyer and the seller are deemed to be related |
| (ii) | The manner of determining value when there is no sale, or the buyer and seller are related, or price is not the sole consideration, or in any other case |
| (iii) | The manner of acceptance or rejection of the value declared by the importer or exporter, where the proper officer has reason to doubt the truth or accuracy of such value, and determination of value |
| (iv) | Additional obligations of the importer for any class of imported goods and the checks to be exercised, including the circumstances and manner, as the Board may specify, where the Board has reason to believe that the value may not be declared truthfully or accurately, having regard to the trend of declared value or any other relevant criteria |
Clause (iv) was inserted by section 89 of the Finance Act, 2022 (6 of 2022); the footnote prints no date. The words "reason to believe" and "trend of declared value" mean the Board can single out a class of imported goods for added checks. The importer's obligations in that case are as the Board specifies, and the text consulted does not set them out.
Clauses (i) to (iii) matter in practice for related-party imports, where the sale may not reflect an arm's length price. Our post on the special valuation branch for related-party imports explains how that works on the ground.
Rate of exchange: the third proviso and the Explanation
The "also" proviso says the price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under section 46, or a shipping bill (or bill of export) is presented under section 50, as the case may be. The date of presentation, not the date of invoice or payment, fixes the exchange rate.
The Explanation says that, for the purposes of the section, "rate of exchange" means the rate of exchange (i) determined by the Board, or (ii) ascertained in such manner as the Board may direct, for the conversion of Indian currency into foreign currency or foreign currency into Indian currency. "Foreign currency" and "Indian currency" have the meanings in clauses (m) and (q) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999). The Act states no exchange rate; the rate is whatever the Board determines or directs.
Sub-section (2): tariff values
Notwithstanding sub-section (1), if the Board is satisfied that it is necessary or expedient so to do, it may, by notification in the Official Gazette, fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods. Where tariff values are fixed, duty is chargeable with reference to the tariff value. Tariff values are fixed by notification and are not in the Act; this article states none.
Our article on sections 15 and 16 explains the date on which the rate of duty and tariff valuation apply.
The rules cited by the section
The section leaves the detailed method to rules. Two sets of rules name section 14 as their basis: the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (the copy consulted is dated 26 September 2017) and the Customs Valuation (Determination of Value of Export Goods) Rules, 2007, which say they are made under section 156 read with section 14 (the copy consulted is dated 10 October 2017). For clause (iv) of the second proviso, the sources also contain a set whose first line reads "Custom (Assistance in Value Decleration of Imported Goods) Rules, 2023", with an issue date printed as 11 January 2023. These dates are those of the files, not of the Act text, and the rule-wise detail is not set out here.
A worked example with invented names
Prism Audio Pvt. Ltd. buys speakers from a supplier abroad for a price stated in a foreign currency. It also pays a commission to a buying agent and pays freight to the Indian port. Under the first proviso, the costs and services of these kinds are brought into the transaction value to the extent and in the manner the rules specify, in addition to the price. When Prism files its bill of entry, the foreign-currency price is converted at the rate of exchange in force on the date the bill of entry is presented. If the supplier were a related company and the officer doubted the declared value, the second proviso's rules on related parties and doubtful values would apply. For a further explanation of the method, see our posts on customs valuation and transaction value rules and the transaction value method.
Need help with customs valuation?
Valuation errors are a frequent source of disputes. If you want a second opinion on how your imports or exports are valued, a legal consultation can help you review the pricing terms and supporting documents.
Key takeaways
- Value is the transaction value: price actually paid or payable where buyer and seller are not related and price is the sole consideration, subject to the rules.
- For imports, costs and services such as commissions, royalties, transport to the place of importation, insurance and handling are added, as the rules specify.
- The rate of exchange is the one in force on the date the bill of entry or shipping bill is presented.
- The Board may fix tariff values by notification; duty is then charged on the tariff value.
- Clause (iv) of the second proviso was inserted by the Finance Act, 2022 and lets the Board specify extra obligations and checks for a class of imported goods.
Read next
- Section 12: dutiable goods and the charge of customs duty
- Sections 15–16: relevant date for rate of duty and tariff valuation
- Section 17: self-assessment, verification and re-assessment of duty
- SVB: Special Valuation Branch for Related-Party Imports
Disclaimer: Based on the Customs Act, 1962 as published on the CBIC Tax Information Portal, updated to 30 March 2022 (amended up to the Finance Act, 2022), as consulted on 2 October 2026. Finance Acts of 2023 and later, and the current rules, regulations and notifications, should be checked. This article is general information, not legal advice; check the official text before acting.