Member lesson
See the reasoning behind the question
Sign in with your existing membership to watch.
Sign inApril 2026 · Q76 · Valuation & Duty
Ex-factory packed price: what is already in, what stays out
Build the transaction value for a U.S. buyer's ex-factory packed purchase from an unrelated manufacturer in India by reading the invoice components first. The $18,344 paid to the seller already includes a $1,500 packing fee; packing costs are part of transaction value, so the packing is retained inside the price and is not added a second time (19 CFR 152.103(b)(1)(i), (b)(2): additions only to the extent not otherwise included). The $4,500 paid separately to a freight forwarder ($500 inland freight and $4,000 air freight) is a charge for transportation beyond the factory in an ex-factory sale: it is not added under 152.103(a)(5)(i), and international transportation is outside the price actually paid or payable under 152.102(f). The $1,500 paid to a genuine buying agent is not a selling commission as defined in 152.102(b), so it is not added under 152.103(b)(1)(ii); this is not a blanket rule that all commissions are excluded, since a selling commission incurred by the buyer and not included in the price is an addition, and the buying-agency relationship must be factually substantiated. On these stated facts only, the entered (transaction) value is $18,344.
What you will learn
Build the transaction value for a U.S. buyer's ex-factory packed purchase from an unrelated manufacturer in India by reading the invoice components first. The $18,344 paid to the seller already includes a $1,500 packing fee; packing costs are part of transaction value, so the packing is retained inside the price and is not added a second time (19 CFR 152.103(b)(1)(i), (b)(2): additions only to the extent not otherwise included). The $4,500 paid separately to a freight forwarder ($500 inland freight and $4,000 air freight) is a charge for transportation beyond the factory in an ex-factory sale: it is not added under 152.103(a)(5)(i), and international transportation is outside the price actually paid or payable under 152.102(f). The $1,500 paid to a genuine buying agent is not a selling commission as defined in 152.102(b), so it is not added under 152.103(b)(1)(ii); this is not a blanket rule that all commissions are excluded, since a selling commission incurred by the buyer and not included in the price is an addition, and the buying-agency relationship must be factually substantiated. On these stated facts only, the entered (transaction) value is $18,344.
19 CFR 152.103(a)(5)(i) Ex-factory sales; 19 CFR 152.103(a)(1) Price actually paid or payable, Example 1 and Example 4; 19 CFR 152.103(b)(1)(i)-(ii), (b)(2) Additions to price actually paid or payable; 19 CFR 152.103(c) Sufficiency of information; 19 CFR 152.102(b) Selling commission; 19 CFR 152.102(e) Packing costs; 19 CFR 152.102(f) Price actually paid or payable · Exam cover: HTSUS 2025 Basic Edition, no supplements; 19 CFR cover 'Revised as of January 1, 2024'. Actual GovInfo annual edition files used here are revised as of April 1, 2024 (2024-04-01); disclosed, not relabeled as January 1.
Explained using the historical edition for this exam.