CBSA-redenering
&&Under the Customs Act, the primary basis of determining the value for duty of imported goods is the transaction value method. This method and the five alternate methods of determination are identified in sections 48 to 53 of the Customs Act. The sequential order of these methods must be followed in order to determine the value for duty.&&&&According to the transaction value method, the value for duty must reflect all payments made by the purchaser to the vendor in respect of the goods, while also taking into account the mandatory adjustments in subsection 48(5) of the Customs Act. These adjustments include additions to and deductions from the price paid or payable.&&&&To the extent that they are included in the price paid or payable for the imported goods, certain amounts are to be deducted therefrom in determining the transaction value.&&&&-Transportation and Associated Costs, and Insurance Costs (Subparagraph 48(5)(b)(i) of the Customs Act)&&&&Any of the costs referred to in subparagraph 48(5)(b)(i) of the Customs Act, if they arise after the place from which the goods begin their direct and uninterrupted journey to Canada, would not be included in the transaction value of the goods. Any amounts for Canadian customs brokerage fees which are included in the price paid or payable may be deducted as associated costs and as such, are not included in the transaction value of the goods.&&&&-D13-3-3 - Transportation and Associated Costs&&&&Sections 48 to 54 of the Customs Act require that the transportation costs of the goods be determined to properly apply all valuation methods. This memorandum defines activities considered to be transportation costs. The treatment of transportation costs, under all methods of valuation, will depend on the establishment of the place of direct shipment (PODS). Therefore, a PODS for the goods must be established. Refer to Memorandum D13-3-4, Place of Direct Shipment.&&&&To establish the PODS, Memorandum D13-3-4 paragraph 6 states that "The place of direct shipment is the physical location of the goods, following an event, at the point in time when the goods begin their direct and uninterrupted journey to a specific destination in Canada. This will usually be the location where the goods are loaded onto the carrier with a specific location in Canada identified on transportation documents as their destination."&&&&There is no prescribed requirement that only a specific document(s) is acceptable. Place and/or date of direct shipment may be identified on commercial invoices, confirmations of sale, destination tags, and freight invoices. A bill of lading may also be an acceptable source of information. Sometimes, however, a bill of lading may only cover the shipment from the seaport in the country of export to the Canadian destination. Sometimes, an inland bill of lading will substantiate that the Canadian destination of the goods was known at the point of origin and will also indicate the date the journey to Canada began.&&&&Based on the vendor's invoices submitted to us and in consideration of Memorandum D13-3-4, it has been determined that the manufacturer's premises is the PODS. The invoices provided indicates that the vendor is aware that the goods are to be delivered to Canada when they leave the vendor's premises, and a location in Canada is identifiable as the destination of the goods. The vendor is invoiced for charges incurred at the port (e.g. documentation fees, customs fee, electric discharge fee, etc.) and these amounts can be deducted from the selling price to Nemcor. Any actual charges incurred from the manufacturer's premises that cannot be substantiated, cannot be deducted.&&&&Delmar has reiterated that they "are not requesting to deduct the transportation charges as we (Delmar) do not handle the transportation to the port. We are only deducting the fees specified on our invoice to the factory covering the fob charges that we do manage and have proof of. I believe you have a letter form the vendor confirming that those charges are included in their invoice to Nemcor."&&&&The description of fees on the Debit note from Delmar are the only requested deductions: They are as follows:&&• Documentation fees,&&• customs fee,&&• customs manifest entry fee,&&• electric discharge fee,&&• manifest declaration fee,&&• filing fee, and&&• LCL charges (LCL stands for less than a container load and describes sea shipping for cargo loads not large enough to fill a full 20ft or 40ft shipping container. Since LCL shipments fill less than a full 20ft or 40ft shipping container, these are grouped with other cargo) for the goods that are at the place of direct shipment (marine port), to prepare for the goods to commence their direct and uninterrupted journey. These administrative fees would incur at the place of direct shipment and would be considered transportation costs from the place of direct shipment.&&&&Nemcor has supported the assertion that the transportation and associated fees are included in the price via an attestation from the vendor in which they state:&&&&This letter is to confirm that the costs on debit note Ref SHBPLTZ&&Dated: 2021-11-24&&Were included in China-Base Ningbo Foreign Trade Co Ltd invoice A18YF21461&&Dated Nov 29,2021 to our customer Nemcor Inc.&&&&As the invoice price is inclusive of all FOB port charges, and the PODS to Canada in these circumstances is the vendor's premises, the importer is allowed to subtract the actual amount of transportation and associated costs from the calculation of value for duty made under section 48 of the Customs Act.
