ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 30.09.2025
CESTAT Delhi Ruled on Customs Valuation of Imported Software
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. β
In a significant judgment, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, has delivered a landmark decision in favor of HCL Technologies Ltd. and SAP India Pvt. Ltd., setting aside penalties and customs duty demands imposed by the Commissioner of Customs (Adjudication), New Delhi. This case, which revolved around the valuation of imported software CDs and the inclusion of license fees in their transaction value, has far-reaching implications for the IT and software industry. β
Background of the Case
The dispute arose when HCL Technologies imported CDs containing SAP software from SAP Germany, facilitated by SAP India. β The Directorate of Revenue Intelligence (DRI) alleged that the declared transaction value of the CDs was understated and sought to include the license fees paid by HCL to SAP India in the valuation of the CDs under Rule 9(1)(c) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988. β Penalties were also imposed on both HCL and SAP India under Section 112(a) of the Customs Act, 1962.
Source: CESTAT Delhi
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