Tech Know-how Fees Not In Assessable Value: CEGAT

New Delhi, June 27: | Updated: Jun 28 2003, 05:30am hrs
The larger bench of the Central, Excise and Gold (Control) Appellate Tribunal (CEGAT) has ruled that technical know-how fees need not be included in the assessable value of imported goods.

Setting at rest the controversy relating to imposition of customs duty on amount paid towards technical know-how, the CEGAT bench presided over by Justice K K Usha drew the distinction between imported goods and fees paid for manufacture of licensed goods.

While the duty has to be paid on imported goods, the amount paid towards technical know-how for manufacture of licenced goods need not be included in the assessable value of import.

According to industry sources, the CEGAT decision will benefit companies seeking foreign collaboration in sectors such as automobile, pharmaceuticals, bio-technology and telecommunications where large amount of technical know-how fee is transacted.

The issue whether the technical know-how fee of 50,000 paid by SD Technologies to UK-based Westing House Brake and Signal Company (WBS) is liable to be included in the assessable value of goods imported came up before CEGAT in an appeal filed by SD Technologies against the order of the Commissioner of Customs (Appeal).

The Commissioners (Appeal) had upheld the inclusion of technical know-how fees to the value of imported goods as decided by the Collector of

Customs earlier.