What is buying commission and how is it to be treated for valuation purposes?
Ans: A buying agent acts on behalf of a buyer, finding a seller, collecting samples, inspecting goods and in some cases arranging the transport, insurance, storage and delivery of the goods. The amount paid to a buying agent for his services is termed as buying commission, which is paid by the importer in addition to paying for the goods. Article 8(1)(a)(i) of the ACV specifically excludes buying commissions from being added to the price actually paid or payable while determining the customs value. Sometimes buying agents act as principals in the sense that they use their own funds for the payment of the goods and after acquiring the ownership they resell the goods to the ultimate buyer in the country of importation, raising an invoice in their own names. In such cases, the so-called buying agent become the actual seller of the goods and the sale price would include the agent’s commissions and profits. While there is a provision in the ACV for not adding buying commission, there is no
