The Special Valuation Branch (SVB) is a division of Indian Customs that investigates cases where import transactions involve a special relationship between the buyer and the seller. The purpose is to ensure that the declared import value is fair and not influenced by such relationships to evade duty.
Common cases requiring SVB assessment include:
✔ Imports from related foreign companies or subsidiaries
✔ Imports under technical collaboration or license agreements
✔ Imports with special pricing terms or royalty payments
✔ High-value imports with inter-company transfer pricing implications
SVB scrutiny prevents undervaluation of goods and ensures that import duties are correctly assessed.
The primary objective of SVB assessment is to verify whether any influence exists on the import price due to the relationship between buyer and seller. If such influence is established, Customs may adjust the import price for duty calculation.
Key reasons for SVB investigation:
✅ To prevent undervaluation of goods and revenue loss
✅ To ensure compliance with Customs Valuation Rules, 2007
✅ To determine if additional duties should be levied
✅ To maintain fair trade practices in international transactions
If an importer pays extra duties due to SVB assessment, they are eligible to claim an SVB Refund after proving that the declared price was genuine.
SVB Assessment Process & Refund Eligibility
The SVB investigation process involves:
1. Filing a Reference with SVB: Importers dealing with related entities must declare the relationship in the Bill of Entry and submit a reference to SVB for valuation.
2. Submission of Supporting Documents: Importers need to provide invoices, contracts, agreements, royalty/license fee details, and other trade documents for review.
3. Provisional Duty Payment: During SVB investigation, importers may be asked to pay an extra duty (provisional loading) on imported goods, typically 5% of the import value.
4. Final Order by SVB: After a detailed review, SVB issues an order accepting or rejecting the declared import value. If no influence is found, the excess duty collected is refundable.
5. Claiming SVB Refund: Once the final order is issued, importers can claim a refund of any extra duty paid during provisional assessment.
Common Challenges in SVB Refunds
Importers often face the following difficulties when claiming an SVB Refund:
🔴 Delayed Investigation: SVB cases can take several months, leading to funds being blocked.
🔴 Excessive Documentation: Complex paperwork and multiple clarifications are often required.
🔴 Disputes in Final Valuation: If Customs disagrees with the declared price, refund claims may be denied.
🔴 Refund Rejections Due to Procedural Gaps: Many refunds are rejected due to incorrect filings, missing documents, or procedural errors.
To avoid these challenges, expert assistance is recommended to ensure a smooth refund process.
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SVB Refunds involve complex valuation assessments, extensive documentation, and long processing times. At Pragati Exim Solution, we help importers with:
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- 1 What are the major export incentives available in India?
- Exporters can avail benefits under RoDTEP, Duty Drawback, EPCG, Advance Authorization, IGST Refund, and Interest Equalization.
- 2 Can both manufacturers and merchant exporters avail these incentives?
- Some schemes, like RoDTEP and Duty Drawback, are available for all exporters, while others like EPCG & AA are for manufacturers only.
- 3 How does RoDTEP help exporters?
- RoDTEP refunds hidden taxes & duties that are not refunded under GST.
- 4 What is the validity of these export incentives?
- Schemes are reviewed periodically by the DGFT & Ministry of Commerce.
- 5 Can service exporters avail these incentives?
- Some incentives, like SEIS (discontinued), were available for services, but most incentives apply to goods exports.
- 6 6. How can exporters claim Duty Drawback?
- By filing a shipping bill at customs, mentioning the applicable drawback rate.
- 7 7. Is GST applicable on export incentives?
- No, export incentives are not subject to GST.
- 8 8. What happens if exporters do not meet EPCG obligations?
- They must pay back the duty saved along with interest.
- 9 Can exporters apply for multiple incentives?
- Yes, but not all incentives can be claimed simultaneously for the same transaction.
- 10 10. How can Pragati Exim Solution assist exporters?
- We provide end-to-end support for documentation, compliance, and maximizing benefits.
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