What is an SVB Bond?

An SVB bond is a financial guarantee furnished by an importer to Indian Customs authorities when the transaction under scrutiny involves related parties — such as a parent and a subsidiary — and the Customs Special Valuation Branch (SVB) is investigating whether the declared price of the goods is influenced by their relationship.

This bond is a temporary security to safeguard revenue while allowing the importer to clear their goods without delay. Importers execute this bond under Section 18 of the Customs Act, 1962, to cover any potential difference in duty that may become payable if the SVB later concludes that the transactions were undervalued due to the relationship.

Essentially, the SVB bond guarantees that if the final SVB order results in an upward revision of the transaction value — and consequently additional customs duties — the importer will pay the amount due promptly. On the other hand, if the SVB accepts the declared value, the bond is discharged and no further action is required.

This procedure helps avoid bottlenecks in the clearance of goods, while at the same time protecting the revenue of the state and ensuring fairness in customs valuations.