Assessable value: the number every duty percentage is applied to

Every percentage in the tariff is applied to something. That something is the assessable value, and it is not your invoice total.

This is where estimates most often go wrong. An importer takes the purchase price, applies the total tax incidence, and produces a landed cost that looks authoritative and turns out to be short. The rate was right. The base was wrong.

Assessable value is built, not quoted

The starting point for valuation is the transaction value — the price actually paid or payable for the goods when sold for export to Bangladesh. This is the internationally agreed basis under the WTO Customs Valuation Agreement, which Bangladesh applies.

But the transaction value is then adjusted to a common footing, so that goods bought on different commercial terms are taxed consistently. Broadly, assessable value is built up to a CIF basis plus landing charges:

A landing-charge addition of 1% of CIF is commonly applied in Bangladeshi practice. Because the precise treatment is set by the valuation rules and can be applied differently in different circumstances, confirm the figure your customs house actually uses with your C&F agent rather than assuming it.

Why your Incoterm changes the tax

This is the practical consequence, and it catches people out.

If you buy FOB, the invoice covers the goods loaded at the origin port. Freight and insurance are yours to arrange and pay separately. They are not on the invoice — but they are part of the assessable value. They must be added before duty is calculated.

If you buy CFR or CIF, more of that is already inside the invoice figure.

So an importer working from an FOB invoice who applies the duty rate directly to the invoice total will understate the tax on every single consignment. On a low-duty line the error is minor. On a line with a total incidence of several hundred percent, a missing freight component is multiplied by the whole cascade.

Work the arithmetic. Goods 10,000. Freight and insurance 1,500. On a line with 127% total tax incidence:

The freight was 1,500. The error it caused was 2,051 — larger than the freight itself, because the cascade applies on top. This is the compounding effect described in the TTI guide, seen from the other direction.

When customs does not accept your invoice

Declared transaction value is the primary basis, but it is not automatic. Customs may question it where the price appears unreasonably low, where buyer and seller are related parties, where documentation is inconsistent, or where the goods fall into a category subject to known undervaluation.

If the declared value is set aside, the valuation rules provide a sequence of alternative methods — the value of identical goods, then similar goods, then deductive and computed methods, and finally a fallback. Some goods are also subject to minimum or tariff values set administratively, below which a declaration will not be accepted regardless of what was actually paid.

The commercial point: a valuation adjustment is amplified by the cascade. On high-SD goods, an uplift of 10% in assessable value can move the tax bill by far more than 10% of the goods' value. Disputes about valuation are rarely small disputes.

Currency

Foreign-currency invoices are converted at the exchange rate applicable under customs rules for the relevant date — not the rate on the day you paid your supplier, and not the rate your bank gave you. In a period of currency movement this alone can shift the assessable value noticeably between the date of purchase and the date of assessment.

What is not in assessable value

Several real costs of importing sit outside the valuation base and are therefore not taxed, though they are still costs to you:

• Port, handling, storage and demurrage charges in Bangladesh
• C&F agency fees
• Inland transport from the port to your warehouse
• LC charges and bank commission
• Interest on deferred payment, where properly distinguished

Keep these separate in your costing. Mixing them into the value base overstates your tax; forgetting them entirely understates your landed cost.

Why an error in assessable value is the most expensive mistake you can make

Every duty and tax in the cascade is calculated from assessable value. Get the classification wrong and you pay the wrong rate on the right base; get the value wrong and every single component is wrong at once, including the ones calculated on top of other components.

The multiplier effect is worth seeing. On a line with a total incidence of 64.25%, each additional taka of assessable value brings 1.6425 taka of landed cost. On a line at 189.2% it brings 2.892. On the heaviest line in the tariff, 1007.5%, each extra taka of assessable value costs you 11.075 taka.

On a high-SD line, a hundred thousand taka of unreported freight costs more than a million taka in tax. That is not a rounding error; it is the whole margin on most consignments.

The errors that actually occur

Quoting FOB when the duty is on CIF. The most common and the most predictable. Freight and insurance belong in assessable value. An importer who budgets from the supplier's FOB invoice understates the base by the whole cost of shipping, then multiplies that understatement by the TTI.

Omitting assists. Tooling, moulds, dies, designs or materials you supplied to the manufacturer free or at reduced cost form part of the value of the goods even though no money crossed for them on this invoice. They are easy to forget precisely because they do not appear on the commercial invoice.

Treating a discount as automatically deductible. Some discounts are accepted into the transaction value and some are not, depending on whether they are available to all buyers on the same terms. A discount granted because of a relationship between buyer and seller is the kind that attracts scrutiny.

Using the wrong exchange rate date. The rate that applies is the one in force for the relevant date under the customs rules, not the rate on the day you paid your supplier, and not today's rate. On a large consignment in a volatile week this alone can move the base by a noticeable margin.

Why declared value is not always accepted

Transaction value is the starting point, not the final word. Customs may set it aside where the declared figure is implausible against known values for identical or similar goods, where buyer and seller are related in a way that influenced the price, or where the sale carries conditions whose value cannot be determined.

Bangladesh also operates minimum and tariff values on certain goods, which set a floor regardless of what you actually paid. Where one applies, declaring a genuine lower price does not reduce your duty.

The practical consequence: your documentation is what defends your valuation. A commercial invoice, the contract, proof of payment, the freight and insurance documents, and evidence of any assists. An importer who can produce those is in a straightforward position. One who cannot is arguing from assertion.

Using the calculator on this site

Each tariff line on this site has a box where you can enter an assessable value and see the tax applied. Two things to keep in mind:

• Enter the assessable value — CIF plus landing charges — not your FOB invoice figure. The calculator cannot know your Incoterm.
• The result is the standard published position. It does not apply SRO concessions, bond facilities or preferential rates, and it cannot anticipate a valuation adjustment.

Used that way it is a reliable planning figure. Used with an invoice total pasted in, it will quietly mislead you.