From the Rolls-Royce experimental archive: a quarter of a million communications from Rolls-Royce, 1906 to 1960's. Documents from the Sir Henry Royce Memorial Foundation (SHRMF).
Letter discussing the basis of value for duty on automobile parts imported into the United States, based on the cost of production.
| Identifier | ExFiles\Box 19\4\ Scan254 | |
| Date | 9th September 1930 guessed | |
| -2- Your enquiry is as to the basis of value for duty purposes on parts of automobiles which, in the condition in which you purpose to import them, are not freely sold for home consumption in the country of exportation, nor freely sold for exportation to the United States, nor freely sold in the United States. Under these conditions the proper valuation basis of duty will be the cost of production. I am not unmindful of the fact that these articles may be sold at retail by the service stations abroad. I have summarized my definitions of the values but in reading the full definitions as they appear in Section 402 you will note that they refer to the price at which the goods are sold in the usual wholesale quantities in the ordinary course of trade. It follows from this that any retail price is immaterial and cannot be considered. Furthermore, it is to be noted that the definitions require that the goods must be "freely" offered for sale to all purchasers, so that if the goods are confined to only one customer they are not freely offered for sale and the price at which they are sold would be immaterial. As the articles you purpose to import are not sold freely in wholesale quantities in the ordinary course of trade either for home consumption in Great Britain or for export to the United States or in the United States after importation in the condition imported, it follows that there can be no foreign value, no export value, and no United States value, and the basis of dutiable valuation must be the cost of production. Please notice that the definitions refer to the price of "such" or "similar" merchandise. "Such" would mean articles identical in character with those imported by you. "Similar" would mean articles differing slightly but to all intents and purposes commercially interchangeable, so that if there were some other manufacturer than your own who made parts practically of the same character as those you import it would be permissible to take the price of such other similar goods as the basis of valuation. I understand this is not the situation and that your articles would be in a class by themselves. On the facts as presented to me, therefore, I have no hesitation in saying that the basis of duty would be your own cost of production and I come therefore to a detailed discussion of the meaning of this definition as it appears in Section 402. | ||