How are retrospective quantity discounts to be treated for valuation purposes?
Ans: Quantity discounts are allowed by a seller according to a fixed scheme based upon the quantity of the goods sold over a basic period. Normally these are allowed as deductions from the price according to the quantity sold. Such discounts are to be normally allowed while determining the customs value. A situation may arise where such discounts are granted retrospectively in respect of importation already made. For example, a seller grants 5% discount on purchases up to 100 units in a year and 10% discount if purchases exceed 100 units in a year. A buyer receives 5% discount on his first purchase of 100 units. Subsequently, he makes a second purchase of 100 more units on which he receives 10% discount and in addition, another 5% discount retrospectively towards the first purchase. In such a case, 5% additional discount on the subsequent importation cannot be deducted for determining the customs value. Such amounts are in the nature of credits in respect of earlier transactions and as
