Definition of 'VALUE' in Malaysian Customs Laws
Understanding what is considered 'Value' of a product is important as it has implications on the calculation of import duty, Excise duty and GST on goods that are imported or some goods that are locally produced and subject to excise controls.
Customs Act 1967 considered the principal Act defines Value (in Section 2 under the heading :Interpretation) as:
"value" in relation to imported goods means customs value as determined under Section 142 (35B).
Section 142(35B) is a provision in the Act that empowers the Minister to make regulations and the following Regulations were enacted with effective date of enforcement 1 Jan 2000:
CUSTOMS (RULES OF VALUATION) REGULATIONS 1999(P.U.(A) 507/99)
These Regulations were a replacement of the traditional system that was in practice throughout much of the World that is the Brussels Definition of Value ("BDV" or "Definition"). The new system of Valuation principles had been defined in the General Agreement of Tariffs and Trade ("GATT Agreement"). The new principles incorporated elements of the Definition to a greater or lesser extent. The principles of Valuation under GATT is one of the measures adopted aimed to reduce or eliminate non tariff measures with restrictive effect on international trade. Value under BDV value was a notional concept whilst GATT used a positive concept. Notional concept means there is a single, theoretical, standard of value: the normal price of the goods, that is 'the price the goods would fetch on a sale in the open market under specified conditions. With the positive concept the primary method of establishing the Customs value is the transacted value of the imported goods that is the price actually paid or payable for the goods being valued when the sale meets specified conditions. When there is no sale or the specified conditions are not met, one has to move to secondary methods, each precisely defined and set out in a hierarchical order.
The Excise Act defines "Value" in Section 2 under Interpretation as below:
"value" means –
a. in relation to locally manufactured goods, the price which a buyer would give for the goods on purchase in the open market at the time when duty is payable but will exclude any excise duty, costs, charges and expenses of transportation and storage immediately after removal from the place of manufacture; and
b. in relation to imported goods -
(i) the value of such goods for the purpose of customs duty determined in accordance with the Customs Act 1967; and
(ii) the amount of customs duty, if any, payable on such goods.
GST Act 2014 defines Value of goods imported into Malaysia as :
Section 16. The value of goods imported into Malaysia shall be the sum of the following amounts, namely-
(a) the value of the goods for the purposes of customs duty determined in accordance with the Customs Act 1967;
(b) the amount of customs duty, if any paid or is to be paid on the goods; and
(c) the amount of excise duty, if any, paid or is to be paid on the goods.
Understanding what is considered 'Value' of a product is important as it has implications on the calculation of import duty, Excise duty and GST on goods that are imported or some goods that are locally produced and subject to excise controls.
Customs Act 1967 considered the principal Act defines Value (in Section 2 under the heading :Interpretation) as:
"value" in relation to imported goods means customs value as determined under Section 142 (35B).
Section 142(35B) is a provision in the Act that empowers the Minister to make regulations and the following Regulations were enacted with effective date of enforcement 1 Jan 2000:
CUSTOMS (RULES OF VALUATION) REGULATIONS 1999(P.U.(A) 507/99)
These Regulations were a replacement of the traditional system that was in practice throughout much of the World that is the Brussels Definition of Value ("BDV" or "Definition"). The new system of Valuation principles had been defined in the General Agreement of Tariffs and Trade ("GATT Agreement"). The new principles incorporated elements of the Definition to a greater or lesser extent. The principles of Valuation under GATT is one of the measures adopted aimed to reduce or eliminate non tariff measures with restrictive effect on international trade. Value under BDV value was a notional concept whilst GATT used a positive concept. Notional concept means there is a single, theoretical, standard of value: the normal price of the goods, that is 'the price the goods would fetch on a sale in the open market under specified conditions. With the positive concept the primary method of establishing the Customs value is the transacted value of the imported goods that is the price actually paid or payable for the goods being valued when the sale meets specified conditions. When there is no sale or the specified conditions are not met, one has to move to secondary methods, each precisely defined and set out in a hierarchical order.
The Excise Act defines "Value" in Section 2 under Interpretation as below:
"value" means –
a. in relation to locally manufactured goods, the price which a buyer would give for the goods on purchase in the open market at the time when duty is payable but will exclude any excise duty, costs, charges and expenses of transportation and storage immediately after removal from the place of manufacture; and
b. in relation to imported goods -
(i) the value of such goods for the purpose of customs duty determined in accordance with the Customs Act 1967; and
(ii) the amount of customs duty, if any, payable on such goods.
GST Act 2014 defines Value of goods imported into Malaysia as :
Section 16. The value of goods imported into Malaysia shall be the sum of the following amounts, namely-
(a) the value of the goods for the purposes of customs duty determined in accordance with the Customs Act 1967;
(b) the amount of customs duty, if any paid or is to be paid on the goods; and
(c) the amount of excise duty, if any, paid or is to be paid on the goods.
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