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Sign inMay2024 · Q19 · Practical Exercise
A seller's rebate effected after importation: disregarded in transaction value
Apply 19 CFR 152.103(a)(4) (2023 edition) to the May 2024 practical-exercise facts: a C.I.F. commercial invoice totaling $94,200 that itemizes $60,000 for the press and $34,200 for freight and insurance, importation on January 17, 2024, full payment of the invoice by the buyer on January 19, 2024, and a separate $15,000 wire from the seller back to the buyer on January 29, 2024. Because that partial refund was made or otherwise effected after the date of importation, it is disregarded in determining transaction value: it is neither subtracted from nor added to the price actually paid or payable, and the buyer's original payment is not ignored. Distinguish the $94,200 C.I.F. invoice total from the $60,000 price of the goods; C.I.F. charges for international freight and insurance, when identified and verified, are excluded from transaction value (152.103(a)(1) example 4), so the $94,200 total is not the dutiable value. Recognize the boundaries: 'payable' allows payment after importation, so later payment by itself does not defeat a price; a pre-importation promise of a later refund is not by itself a net-price reduction; and a discount agreed and effected before importation, or a pre-importation price formula, can form the price actually paid or payable only on its own documented facts (illustrated historically by H308580, contrasted with H042055).
What you will learn
Apply 19 CFR 152.103(a)(4) (2023 edition) to the May 2024 practical-exercise facts: a C.I.F. commercial invoice totaling $94,200 that itemizes $60,000 for the press and $34,200 for freight and insurance, importation on January 17, 2024, full payment of the invoice by the buyer on January 19, 2024, and a separate $15,000 wire from the seller back to the buyer on January 29, 2024. Because that partial refund was made or otherwise effected after the date of importation, it is disregarded in determining transaction value: it is neither subtracted from nor added to the price actually paid or payable, and the buyer's original payment is not ignored. Distinguish the $94,200 C.I.F. invoice total from the $60,000 price of the goods; C.I.F. charges for international freight and insurance, when identified and verified, are excluded from transaction value (152.103(a)(1) example 4), so the $94,200 total is not the dutiable value. Recognize the boundaries: 'payable' allows payment after importation, so later payment by itself does not defeat a price; a pre-importation promise of a later refund is not by itself a net-price reduction; and a discount agreed and effected before importation, or a pre-importation price formula, can form the price actually paid or payable only on its own documented facts (illustrated historically by H308580, contrasted with H042055).
19 CFR 152.103(a)(4) Rebate (Revised as of April 1, 2023); 19 CFR 152.103(a)(1) General (discounts, formula, meaning of 'payable'); 19 CFR 152.103(a)(1), example 4 (C.I.F. charges excluded); May 1, 2024 CBLE, Category II Practical Exercise shared facts; May 1, 2024 CBLE practical exercise commercial invoice (exam exhibit), read as image; CBP HQ H042055 (April 17, 2009), holding and analysis – historical illustration for the named protestant; CBP HQ H308580 (May 8, 2020), discount criteria and holding – historical illustration for the named requester; CBP HQ H290625 (June 7, 2022), transaction value section and holding – historical illustration; Bahrain origin analysis not used; May 1, 2024 CBLE official answer key, question 19 · Exam cover (May 1, 2024, CBP Publication 3717-0524) prescribes Title 19, Code of Federal Regulations (2023 Revised as of April 1, 2023). Source used: 19 CFR 152.103 as revised April 1, 2023 (local text CFR-2023-152-103.txt), paragraphs (a)(1) with all five examples, (a)(2)-(4), (b) additions and (c) sufficiency read. CBP rulings H042055 (2009), H308580 (2020) and H290625 (2022) used only as historical illustrations of how CBP applied the rule to the named parties' own facts; not presented as current binding guidance. Historical lesson only; no current-law sweep.
Explained using the historical edition for this exam.