Home Discussion Valuation Valuation – exclusions from transaction value

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  • Douglas Meadows
    Post count: 25

    I believe the correct answer per the citation should be B- Assembly charge is excluded from the transaction. The quiz chooses C. Can you please confirm?

    7. Question 1 point
    Hot Springs Hospital imported a new piece of advanced medical equipment, which was heavily advertised by the seller on behalf of the buyer in numerous U.S. medical journals. The invoice price for this shipment is $500,000, which includes a charge for assembly after importation that is not separately listed. A $5,000 charge for a one-year maintenance contract is separately listed on the invoice. The terms of the sale are ex-factory and transaction value is the correct basis of appraisement for this shipment. Which ONE of the following is excluded from transaction value for this shipment?

    A. U.S. advertising costs paid for by the seller
    B. Assembly charge
    C. Cost of the one-year maintenance contract
    D. Insurance, separately paid by Hot Springs Hospital
    E. Foreign inland freight paid by Hot Springs Hospital
    Incorrect. Correct choice is: C
    Explanation: 19 CFR 152.103 (i)(1)(i)

    Post count: 29

    § 152.103 Transaction value.
    (a) Price actually paid or payable –
    (3) Assembled merchandise. The price actually paid or payable may represent an amount for the assembly of imported merchandise in which the seller has no interest other than as the assembler.

    (i) Exclusions from transaction value. The transaction value of imported merchandise does not include any of the following, if identified separately from the price actually paid or payable and from any cost or other item referred to in paragraph (b) of this section:
    (1) Any reasonable cost or charge that is incurred for –

    (i) The construction, erection, assembly, or maintenance of, or the technical assistance provided with respect to, the merchandise after its importation into the United States;

    In view of 19 CFR § 152.103(i)(1)(i), the cost of the one-year maintenance contract is to be excluded from the transaction value. C is therefore the correct answer choice.
    § 152.103(a)(3) specifically states that assembly charges are includible in the transaction value. Hence B is an incorrect answer choice.

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