In order to complete the deductive value formula, the value of components that are not dutiable must be deducted from the sales price using the list of deductions in Part152.105. The following amounts should be deducted from the merchandise being appraised under the deductive method:
- Any commission usually paid or the addition usually made for profit and general expenses in connection with sales in the U.S. of imported merchandise that is of the same class or kind regardless of the country of exportation.
- The actual costs and associated costs of transportation and insurance incurred with respect to international shipments of the merchandise concerned from the country of exportation to the U.S.
- The usual costs and associated costs for transportation and insurance incurred with respect to shipments of the merchandise concerned from the place of importation to the place of delivery in the U.S.
- The customs duties and other federal taxes currently payable on the merchandise concerned because of its importation.
Note:
Notice the "or" in 152.105? If you have a deductive value situation that has both commissions AND profit and general expenses, which one applies?
The Customs Valuation Encyclopedia summarizes a ruling in the Deductive Value section under Deduction for Usual Profits and General Expenses. It's Ruling 543065 and states that "an importer who elects deductive value as a means of appraisement is only entitled to an adjustment of EITHER the commission OR the addition usually made for profit and general expenses. "
Therefore, the answer to Wednesday's question is D - $10.51
$15.00
- $1.50 - Commission OR $1.50 Profit & General Expenses
- $1.00 Intl Transportation
- $0.85 Domestic Transportation
- $1.14 Duties
$10.51
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