What is the Rule 5 of Customs valuation rules?

Rule 5 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 provides that when the transaction value of imported goods cannot be determined under Rule 4, the value shall be based on the transaction value of identical goods. Identical goods are those that are the same in all respects, including physical characteristics, quality, and reputation, and are produced in the same country by the same manufacturer. If such goods are unavailable from the same manufacturer, goods from a different manufacturer in the same country may be used.

The import of such identical goods must have occurred at or about the same time as the goods being valued. The comparison is valid only if the sale of identical goods was made at the same commercial level and in substantially the same quantity. Where differences exist, reasonable adjustments may be made for differences in trade level, quantity, transport, insurance, and associated costs.

This rule ensures a fair and consistent basis of valuation when direct transaction data is unavailable. Rule 5 is part of the sequential hierarchy of customs valuation methods and can only be invoked when valuation under Rule 4 is not feasible. It plays a key role in preventing undervaluation and ensuring revenue protection without arbitrary estimation.

Related guides

• Start here: Everything YOU Need to Know About Special Valuation Branch: [Complete Guide]
• The 6 Methods of Customs Valuation in India (2026 Guide)
• What Is EDD in Customs? Extra Duty Deposit (2026 Guide)
• What Is the Purpose of SVB in Customs? (2026 Guide)
• What is an SVB Order in Customs?

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