ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 15.10.2025
CESTAT Delhi- Royalty Payments Not Includible in Transaction Value of Imported Goods
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
On October 14, 2025, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, delivered a significant judgment in the case of M/s. β Ericsson India Private Limited vs. Additional Director General (Adjudication), Directorate of Revenue Intelligence. β This decision, which involved three appeals (Customs Appeal Nos. 50439, 50440, and 50441 of 2021), has far-reaching implications for the inclusion of royalty payments in the transaction value of imported goods under customs law.
Background of the Case
Ericsson India, a wholly-owned subsidiary of LM Ericsson Sweden, is engaged in the manufacture and sale of telecom equipment such as Radio Base Stations, Mobile Switching Centers, and Base Station Controllers. β The company imports components from its related foreign supplier, Ericsson Sweden, and pays royalties to LM Ericsson Sweden for technical know-how under a Technical Co-Operation Agreement. β The dispute arose when the Directorate of Revenue Intelligence (DRI) alleged that the royalty payments made by Ericsson India to LM Ericsson Sweden should be included in the transaction value of the imported components under Rule 10(1)(c) of the Customs Valuation (Determination of the Value of Imported Goods) Rules, 2007. β The DRI also imposed penalties on Ericsson India and two of its executives, Tej Nirmal Singh and Bharat Bandhu, under the Customs Act, 1962.
Source: CESTAT Delhi
Handy Download:
Write to us at office@aadrikaalaw.com
Tel: +91-11-4999 2707 I +91-9999005379
Leave a Reply