HQ 545737: Significance of the U.S. retail price of imported merchandise appraised on the basis of transaction value

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 545737
                         August 11, 1994

VAL CO:R:C:V 545737 ILK

CATEGORY: Valuation

M. Barry Levy, Esq.
Sharretts, Paley, Carter & Blauvelt, P.C.
67 Broad St.
New York, NY  10004

RE:  Significance of the U.S. retail price of imported
     merchandise appraised on the basis of transaction  value

Dear Mr. Levy:

     This is in response to your request for a ruling, dated
August 3, 1994, on behalf of your client Panalpina, Inc. for its
client Ermenegildo Zegna Corp. (hereinafter referred to as "the
importer").

FACTS: 

     The imported merchandise at issue consists of wearing
apparel purchased by the importer from a related seller.  The
imported merchandise bears a retail price tag in an amount
greater than the invoice price to the importer.  You cite as an
example a men's suit bearing a retail price tag showing that the
suit will be sold in the U.S. for $400, while the seller's
invoice to the importer, accompanying the suit is in the amount
of $200.00.  According to your ruling request, there are no
amounts that should be added to the price actually paid or
payable pursuant to 402(b)(1) of the Tariff Act of 1930, as
amended by the Trade Agreements Act of 1979 (19 U.S.C. 1401a(b);
TAA), no other payments (direct or indirect) other than the
invoice price have been made to the seller by the importer and 
appraisement on the basis of transaction value is not precluded
under TAA 402(b)(2)(A).  You ask us to determine, whether in
light of the foregoing facts, the price tag attached to the
imported merchandise showing a U.S. retail price is relevant.

ISSUE: 

     Whether a price tag showing a U.S. retail price that is
attached to imported merchandise is relevant in determining the
transaction value of imported merchandise.

LAW AND ANALYSIS:

     Transaction value, the preferred method of appraisement, is
defined by TAA 402(b)(1) as "the price actually paid or payable
for the merchandise when sold for exportation to the United
States..." plus certain additions specified in 402(b)(1)(A)
through (E).  The term "price actually paid or payable" is
defined in TAA 402(b)(4)(A) as:

     ...the total payment (whether direct or indirect, and
     exclusive of any costs, charges, or expenses incurred for
     transportation, insurance, and related services incident to
     the international shipment of the merchandise from the
     country of exportation to the place of importation in the
     United States) made, or to be made, for imported merchandise
     by the buyer to, or for the benefit of, the seller.

     According to the statute quoted above, the price actually
paid or payable is the amount paid by the buyer, exclusive of
certain costs, to or for the benefit of the seller.  Under the
facts described above, assuming that the importer is able to
establish payment of the invoice price, the transaction value of
the imported merchandise is the invoice price, less any charges
or costs incident to international shipment of the merchandise. 

HOLDING:

     Under the facts presented, the U.S. retail price as shown on
a price tag attached to the imported merchandise is not relevant
to determining the transaction value of the imported merchandise.


                              Sincerely,



                              John Durant, Director
                              Commercial Rulings Division