Section 5(2) in The Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement between the Governments of the Republic of India and the Republic of Korea) Rules, 2009
(2)The value of the non-originating materials used in the production of a good shall be,-(a)for materials whose country of origin is other than the State parties to the agreement, the CIF value; or,(b)for materials whose, origin cannot be determined, the earliest price as ascertained to have been paid for in the territory of the State party where the working or processing takes place, in accordance, with the customs valuation agreement.Explanation 1:- For the purpose of calculation of value of the non-originating materials, the following expenses shall not be included, and if already included in such value, such expenses shall be deducted, namely:-(a)inland transportation costs incurred to transport the material to the location of the producer; and,(b)duties, taxes and customs brokerage fees on the material paid in the territory of one or both of the State parties, other than duties and taxes that are waived, refunded, refundable, or otherwise recoverable, including credit against duties or taxes paid or payable;Explanation 2:- For the purpose of calculation of regional value content of goods, if the material does not satisfy the requirements of sub-rule (1), the non-qualifying value of the material shall be that proportion which cannot be attributed to one or both of the State parties, provided that the requirements of rule 8 at each stage of value accumulation are satisfied;Explanation 3:- For the purposes of these rules the basis for tariff classification is the Harmonised System;Explanation 4:- In applying the customs valuation agreement for the determination of the origin of a good.(a)the principles of the customs valuation agreement shall apply to domestic transactions, with such modifications as may be required by the circumstances, as would apply to International transactions;(b)the provisions of these rules shall take precedence over the customs valuation agreement to the extent of any difference; and,(c)the definitions in rule 2 shall take precedence over the definitions in the customs valuation agreement to the extent of any difference.Explanation 5:- All costs referred to in these rules shall be recorded and maintained in accordance with the generally accepted accounting principles applicable in the territory of the State party in which the good is produced.Exception. - The provisions of this rule shall not apply in case of goods exempted from the principle of territoriality under rule 13.
