CBP Rules Computed Value May Be Used for Product Not for Immediate Sale

Computed value can be used at the importer's discretion in circumstances where products entered into the U.S. are not for immediate sale and sale information for similar products is unavailable, CBP said in HQ ruling H324385.

The ruling concerns make-at-home powdered yogurt products and non-electric yogurt makers, imported into the U.S. The importer participates in CBP's reconciliation program and will be acting as a non-resident importer. The powdered yogurt products will be imported into the U.S. as sachets packed in bulk cartons for storage at a third-party warehouse where the individual sachets will be packaged into kits for resale to U.S. consumers through online shopping sites.

The importer’s inventory system will account for the “live” cost of all components when purchased and the cost will be added to the system, CBP said. When a new quantity of inputs are purchased with a different price, this will get added into the calculation of the production run. Every new cost for purchased products will result in a new adjusted average cost of production, it said.

Because the products will be stored and not sold upon entry, transaction value is inappropriate, CBP said. There are also no transaction values for identical or similar merchandise available for appraisal so customs value will be based upon deductive value, unless the importer has elected computed value, the agency said. In this case, the importer proposes to use computed value including its calculation of the value of materials, fabrication, and indirect costs from its inventory management system, profit and general expenses from its records, the amounts for foreign inland freight from the factory to the foreign port of export, and packing costs. There will be no separate assistance-related costs because the importer says they will be accounted for in the value of materials, fabrication and indirect costs, CBP said.

Since all required costs will be accounted for under the costs of materials and fabrication, no assists will be involved or separately required as additions in the calculation of the computed value, CBP said. All packing costs will be included in the importer’s bill of materials of the product, including costs of sachets and cartons for shipment. The importer will include all costs related to preparing the products for shipment to the U.S. as included in the inventory management system.

CBP said that the importer did not provide any of the documents detailing costs and profit concerning the imported products. Because CBP does not have documentation supporting appraisement of the merchandise under computed value, it cannot definitively rule that the goods should be appraised under computed value, it said. However, CBP said that, based upon the facts which the importer has provided it, "it is likely that appraisement under computed value is proper."