Rule 10 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 10 tells you what must be added to the invoice price to reach the transaction value for customs. It covers commissions, packing, goods and services the buyer supplies to the foreign maker, royalties, resale proceeds, other payments tied to the sale, and the cost of transport and insurance up to the place of importation. Our compliance advisory team can map your contracts to these heads.
This article is written as amended up to Notification No. 91/2017-Customs (N.T.) dated 26 September 2017 (CBIC text; no later amending notification found). Sub-rule (2) was substituted by that notification. Later notifications should be checked; no official consolidated text exists beyond the CBIC text.
The transaction value is the price actually paid or payable plus the additions in rule 10. Additions are made only to the extent not already in the price, only on objective and quantifiable data, and nothing else may be added. The big heads are commissions and packing, assists, royalties and licence fees required as a condition of sale, resale proceeds, other payments, and transport and insurance to the place of importation.
Rule 10(1): additions to the price
"In determining the transaction value, there shall be added to the price actually paid or payable for the imported goods" the following.
| Clause | Addition | Limit |
|---|---|---|
| (a)(i) | Commissions and brokerage, except buying commissions | To the extent incurred by the buyer and not already in the price |
| (a)(ii) | Cost of containers treated as one with the goods for customs purposes | Same |
| (a)(iii) | Cost of packing, whether labour or materials | Same |
| (b) | Value, apportioned as appropriate, of assists (see below) | To the extent not already in the price |
| (c) | Royalties and licence fees related to the imported goods that the buyer must pay as a condition of the sale | To the extent not already in the price |
| (d) | The value of any part of the proceeds of any later resale, disposal or use of the goods that accrues, directly or indirectly, to the seller | None stated |
| (e) | All other payments made or to be made as a condition of sale, by the buyer to the seller or to a third party to satisfy an obligation of the seller | To the extent not already in the price |
Assists: clause (b)
Clause (b) covers goods and services supplied, directly or indirectly, by the buyer without charge or at reduced cost for use in connection with the production and sale for export of the imported goods:
- materials, components, parts and similar items incorporated in the imported goods;
- tools, dies, moulds and similar items used in the production;
- materials consumed in the production; and
- engineering, development, art work, design work, and plans and sketches undertaken elsewhere than in India and necessary for the production.
Design work done in India is not an addition under clause (b)(iv); that is why rule 2 excludes goods with Indian design input from the comparison definitions, as our article on rules 1 and 2 explains.
For example, Sundaram Auto Components supplies a stamping die to its Thai supplier at no charge to make brackets for export to India. The die is a tool used in production, so its value, apportioned as appropriate, is added under clause (b)(ii) if not already in the price.
Royalties and the Explanation
Under clause (c), royalties and licence fees count only if the buyer must pay them, directly or indirectly, as a condition of the sale of the goods being valued. The Explanation to sub-rule (1) adds that where a royalty, licence fee or other payment for a process, patented or not, is includible under clauses (c) and (e), it is added "notwithstanding the fact that such goods may be subjected to the said process after importation."
Rule 10(2): transport, loading, handling and insurance
Under sub-rule (2), for the purposes of section 14(1) of the Customs Act, 1962 and the Rules, the value of imported goods includes:
- (a) the cost of transport, loading, unloading and handling charges associated with the delivery of the imported goods to the place of importation; and
- (b) the cost of insurance to the place of importation.
The sub-rule then prints six provisos:
| Situation | Rule as printed |
|---|---|
| Cost in (a) not ascertainable | Twenty per cent of the FOB value of the goods |
| FOB value not ascertainable but FOB plus the clause (b) cost is | Cost in (a) is twenty per cent of that sum |
| Cost in (b) not ascertainable | 1.125 per cent of the FOB value |
| FOB value not ascertainable but FOB plus the clause (a) cost is | Cost in (b) is 1.125 per cent of that sum |
| Goods imported by air, clause (a) cost ascertainable | Cost shall not exceed twenty per cent of the FOB value |
| Goods imported by sea or air and transshipped to another customs station in India | Insurance, transport, loading, unloading and handling charges for that transshipment are excluded |
An Explanation adds that the cost of transport in clause (a) includes ship demurrage charges on chartered vessels, and lighterage or barge charges. The percentages apply only in the cases above; they are not a general rate.
"Place of importation" is defined in rule 2(1)(da); see our rules 1 and 2 article above.
Rule 10(3) and (4): limits on additions
- Sub-rule (3): additions "shall be made under this rule on the basis of objective and quantifiable data."
- Sub-rule (4): "No addition shall be made to the price actually paid or payable in determining the value of the imported goods except as provided for in this rule."
If additions cannot be quantified on objective data, the interpretative notes say the transaction value cannot be determined under rule 3; our article on rule 13 covers those notes. Rule 10 additions also feed the acceptance tests in rule 3.
A working checklist
- Start from the invoice price and list what the buyer paid outside the invoice: agents, packing, tooling, royalties, resale shares.
- Check each against its clause; confirm it is not already inside the price.
- For royalties, test whether payment is a condition of sale.
- Use ascertained freight and insurance if available; apply the proviso percentages only when the text allows.
- Keep objective records to support every figure.
Our guide on transaction value and the Rules and the article on section 14 give wider context.
Need help with additions to value?
Unreported royalties and assists are a common source of valuation disputes. We can map your contracts to rule 10 before a bill of entry is filed or when a notice has arrived. Speak to our compliance advisory desk.
Key takeaways
- Additions apply only to the extent not already in the price actually paid or payable.
- Buying commissions are excluded; selling commissions and brokerage are added.
- Assists supplied without charge or at reduced cost are added; design work done in India is not part of clause (b)(iv).
- Royalties count only if payment is a condition of the sale.
- Freight and insurance proviso percentages apply only in the printed cases.
- No addition is allowed unless rule 10 provides for it.
Read next
- Rule 3: transaction value and related-party sales
- Rules 7 to 9: deductive value, computed value and the residual method
- Rule 13: the interpretative notes
- Customs valuation: transaction value and rules
Disclaimer: Based on the customs rules named above as published on the CBIC Tax Information Portal and, for sets amended since 2023, the amending notifications (read through a TaxClue consolidated reading text; no official consolidated text exists), as consulted on 3 October 2026. Later notifications, rates and the Customs Act, 1962 provisions referred to should be checked. This article is general information, not legal advice; check the official text before acting.