Meaning of Transaction Value & Its Related Terms
Transaction value refers to the price actually payable for goods when sold for export to the country of importation adjusted in accordance with Article 8. Price actually paid or payable is often referred to as PAPP. The 4th schedule of EACCMA 2004 provides that the price actually paid or payable is the total payment made, or to be made, by the buyer to or for the benefit of the seller for the imported goods.
Price Actually Paid or Payable (PAPP)
PAPP refers to the total payments made or to made by the buyer for the benefit of the seller whether directly or indirectly. Price actually paid refers to the price already paid by the buyer to the seller by the time of importation. Such payment may be supported by documentary evidence in form of Telegraphic Transfer, Sales contract, Purchase order, Letters of credit, Advance payments, the Commercial Invoice, Payment advice etc.
Price Payable is the price that has not been paid by the time of importation but has been agreed to be paid. Documentary evidence in support of price payable may include the Commercial Invoice, the sales contract, Letters of credit among others.
- Sale for Export
This concept involves a transaction between two parties, the buyer and the seller who are in the countries of exportation and importation respectively. The seller agrees to transfer goods from his country to the country of the buyer (country of importation) on condition that he/she receives some consideration in exchange note that there has to be an international transfer of goods and payments for the benefit of the seller.
- Country of Importation
According to Article 15 of the Agreement, country of importation means country or customs territory of importation where goods are being valued.
- Adjustments
Implies any cost elements incurred by the buyer but not included in the price actually paid or payable for the imported goods being valued.