What to Do! Undervaluation of Exports! A Customs Blocked My Package!

A fan inquired whether there was a risk involved in declaring the value of exporting accessories lower than the purchase price.

As per the rules of customs, the value of exported items which is stated should as the current market value.

Declaring less than realistic values of goods does without doubt carry risks.

To begin with, there is a legal risk. There is a risk of being accused of dumping if such export prices are given consistently and over a long time too. The regular price level at which low pricing strategies center is at high cost may be below of the normal operating level. Particularly when such prices are used to remove competitors from the scene or to bear the entire control of the market, consequences will certainly vary to legal actions.

There is moreover an element of tax risk involved. If attributed values are far less than the acquisition cost then tax authorities might examine why these taxes such as tariffs and V.A.T are assessed at such lower rates, which would probably frustrate import operations. This, in turn, would reinforce the conspiracy of carrying out tax evasions which would attract suitable penalties in law. Healthy trade without accurate customs statistics will be adversely affected by the incorrect declaration values of import and export goods. The policy dictates the elusion of taxing certain behaviors through local customs. Thus, it is the law that people must conform to, besides the compliance issues faced by the traders. However, once discovered, these acts can harm brand reputation and are not conducive to the future development of a company. In case the customs examination is necessary, considering incomprehensible prices declared by the company as exaggerated, the customs may, without hearing, seize the items or make them returned.

A friendly reminder: For trade to thrive in the long run, it's crucial to follow the law and avoid looking for loopholes!