Importations Without Sales
Free of Charge Shipments
- These are those goods which are transferred free of charge and they may include samples, prototypes, promotional items etc.
Consignment sales
- These are goods supplied to the country of importation not as a consequence of a sale but with the intention that the goods will be sold on the account of the supplier. In this case there is no sale because ownership of goods has not changed hands and no consideration has been received therefore the goods are still owned by the foreign supplier until they are sold in the country of importation.
Goods imported by intermediaries
- These are imported goods supplied from the country of exportation but at the time of Customs valuation in the Country of importation have not been sold. They are imported to be held in stock at the risk of the foreign supplier until they are resold. Since there is no transfer of ownership, there is no transaction value for these goods at the time of importation.
Goods imported by branches
- The delivery of goods from one branch to another does not constitute a sale. It’s merely transferring goods from one office to another since branches do not have separate legal entity from another. Whether a transaction leading to the importation of goods by the branch office qualifies as a sale for export depends on the role of the branch in the transaction. If the main function of the branch is merely to find customers for the parent company, there is no sale between the parent company and the branch.
Goods imported under a hire or leasing contract
- Hire and leasing contracts, even if they include an option to purchase the leased goods, do not constitute a sale.
- Leasing contracts are for the purposes of renting (or leasing) of goods, for example, machinery and equipment for use in the country of importation without actually purchasing them from the exporter.
- The goods are valued using an alternative method and the leasing fees are generally taken to indicate the worth of the goods.
- Even though the rights of the importer may extend to the future purchase of the leased goods, the leasing contract cannot be substituted for a sale.
Goods supplied on loan
- If the goods are loaned by an exporter to an importer, this does not constitute a sale and an alternative method will have to be considered.
Goods imported for destruction
- Costs are usually incurred in connection with the importation of waste or scrap for destruction where the exporter pays the importer an amount for his/her services.
- As the importer does not pay for the imported goods but rather, on the contrary, is paid for accepting and destroying them, such an importation is not considered as a sale.
- In such a case, an alternative method of valuation will be applied.
Goods which are the subject of barter
- Barter trade transactions, constitute a specific case in as much as they are totally or partially expressed in non-monetary terms. They may involve an exchange of goods of approximately equal value or, expressed in monetary terms but not settled (or only partially settled) in monetary terms (e.g. merchandise barter which includes a payment to make up the balance). Hence it is necessary to examine, on a case by case basis, whether the arrangements can be considered a sale.