This document outlines and explains the treatment of the value of goods and services referred to in subparagraph 113(1)(b) of the Customs and Excise Act in determining the value for duty of imported goods under different valuation methods.
Explanation of terms
An “assist” is any material or service that has been supplied to the seller or manufacturer of the goods free of charge or at less than full value so that the purchase price does not reflect the full value of the goods.
The list of dutiable assists comprises four categories of goods and services as follows:
(i) Materials, components, parts and other goods incorporated in imported goods;
(ii) Tools, dies, moulds and similar items utilized in the production of imported goods
(iii) Any materials consumed in the production of imported goods; and
(iv) Engineering, development work, art work, design work, plans and sketches undertaken elsewhere than in the Partner State and necessary for the production of imported goods
Apportionment of the Value of each type of Assist
Materials, components, parts and similar items incorporated in the goods to be valued;
These are tangible items, which physically exist, in the imported product and the value to be added to the price paid or payable in determining the value for duty purposes is the costs to the buyer of manufacturing or otherwise acquiring them.
For example, a Zimbabwean manufacturer of leather bags’ contracts with a foreign manufacturer to buy bags for $100/unit for which the manufacturer supplies, free of charge, the leather from their Zimbabwean production. The leather constitutes an assist and are valued at $10/meter each. Each unit manufactured incorporates one meter of leather. In this case, $10 would be added to the price paid or payable of each unit of the finished goods imported into Zimbabwe.
Note: Any cost to transport the leather to the place where they are used in the manufacture of the leather bags would be included in the value of the assist.
Tools, dies, moulds and similar articles used in the production of the goods to be valued
The apportionment of such charges should be made in a reasonable manner appropriate to the circumstances.
Various possibilities exist. The value could, for example, be apportioned:
- to the first shipment, if the importer wishes to pay duty on the entire value at one time; or
- over the number of units produced up to the time of the first shipment; or
- over the entire anticipated production where contracts or firm commitments exist for that production.
The method of apportionment used will depend upon the documentation provided by the importer.
To illustrate the above, a Zimbabwean importer purchases a mould for the production of a plastic chair and arranges for a foreign company to produce 10,000 such chairs. The purchaser furnishes the mould free of charge. The value of that mould is $1,000. By the time the first shipment of 1,000 chairs has arrived, the producer has already manufactured 5,000 chairs.
The importer may request Customs to apportion the value of the assist over 1,000 units, 5,000 units, or 10,000 units.
- Applied to the first shipment - $1 would be added to the price paid or payable of each of the 1,000 units and no addition would be made to the remaining 9,000 units.
- Over a number of units - 20 centswould be added to the price paid or payable of each of the 5,000 units and nothing added to the balance of 5,000 units.
- Apportioned over the entire anticipated production- 10 centswould be added to the price paid or payable of each of the 10,000 units.
Materials consumed in the production of the goods to be valued;
This will include catalysts, lubricants, reagents, abrasives and similar materials, which do not become part of the imported goods but are used up in the manufacture of the goods. The value of an “assist” in this category is the cost thereof to the importer of producing or otherwise acquiring it. In determining the value no allowance is to be made for waste.
Engineering, development work, art work, design work, plans and sketches undertaken elsewhere than in Zimbabwe and necessary for the production of goods.
This category of “assists” could be most complex because it concerns intangibles only. It could, for example involve changes, which have become generally available or known, or plans which have been used for their original purpose and made available to, or drawn upon by, the buyer for adaptation.
The value of “assists” must be determined if not satisfactorily indicated. The value of an “assist” and the amount to be apportioned to the imported goods must be accurately determined on the basis of readily available information. Where this is not possible, the transaction value of the imported goods cannot be determined under the transaction value method and valuation must proceed sequentially through the alternative methods.
Please click on the hyperlink below for detailed information regarding Zimbabwe Customs valuation system:
Valuation manual :https://www.zimra.co.zw/customs/forms?download=1218:customs-valuation-manual
Customs and Excise Act [Chapter 23:02] :https://www.zimra.co.zw/downloads/category/17-acts?download=166:customs-and-excise-act-chapter-23-02-updated
Disclaimer
This article was compiled by the Zimbabwe Revenue Authority for information purposes only. ZIMRA shall not accept responsibility for loss or damage arising from use of material in this article and no liability will attach to the Zimbabwe Revenue Authority, (ZIMRA).