Antigua and Barbuda
Customs and Excise Division
Ministry of Finance and Corporate Governance
Treatment of Discounts
- For the purpose of this procedure the term “discount” refers to am arrangement whereby the seller, in return for the purchaser’s undertaking certain obligations or accepting or meeting certain conditions, reduces the amount of the price paid or payable for imported goods. For example, the seller may grant a discount for prompt payment (cash discount) or because the seller operates at a certain level of trade (trade level discount) or because the purchaser has agreed to purchase a specified quantity of the goods in the sale giving rise to their importation (quantity discount).
- The price paid or payable, in accordance with valuation procedures in the Customs Control and Management Act, is the total of all payments made or is to be made by the buyer, whether directly or indirectly, to or for the benefit of the seller.
- If a discount is effected, that is, the obligation or condition to which a discount relates is fulfilled or met prior to importation, the amount of that discount should be considered when calculating the value for duty for the imported goods.
- The amounts of a discount effected after importation cannot be deducted from the price paid or payable for the imported goods.
- The Discount should be fully earned.
Treatment of discounts in determining transaction value
The law allows for the net price paid or payable to be an acceptable base for transaction value unless the price is affected by a relationship as defined in the valuation schedule of the Customs Act or is subject to an unacceptable condition.
When prior to the valuation of imported goods, a buyer has availed himself of a cash discount offered by the seller, the cash discount should be allowed in determining the transaction value provided that the invoice states the type of discount and it is distinguished on the invoice. Where the price for the imported goods has not been paid at the time of importation and the cash discount will be effected after importation then such discount will not be considered in determining the transaction value.
Quantity discounts granted in view of the overall volume of the goods purchased and effected prior to importation is allowed in determining the Transaction Value of the imported goods provided that the invoice states the type of discount and it is shown separate on the invoice.
Trade Discounts granted by the seller to the buyer on the imported goods and effected prior to importation of the goods is allowed in determining the transaction value provided that the invoice states the type of discount and it is shown separate on the invoice.
These are normally granted by a seller when the buyer has purchased a large quantity of goods over a given period. The discount relates to all importation in the period and not to one importation. A contingency discount is not allowed for custom duty purposes when it is claimed in full on one importation.
A rebate of an order decrease in the price paid or payable for the goods that is effected after importation on the imported goods will not be considered in determining the transaction value of imported goods.
Refunds made or effected after the date the goods were imported may not be used to reduce the transaction value of goods.
There is no specified amount of discount to be accepted, but rather it is guided by the price actually paid or payable and that the discount been claimed has been earned.
N.B: Customs reserves the right to question/query all documentation in relation to Price Paid or payable and the amount of discount that is been claimed.