No-Charge Import Samples Under Customs: Assessable Value, Bill of Entry and End-Use Evidence
By Ravi Sisodia · Reviewed by CA Divyanshu Sengar · Updated 5 October 2026
India-first finance and compliance workflow with primary-source anchors.
2-minute summary
- A commercial invoice showing “free sample” or zero consideration does not make the customs value zero. Indian import valuation starts with section 14 and the 2007 valuation rules; where there is no qualifying sale price, the importer must move through the prescribed valuation methods using comparable or other permitted evidence rather than invent a nominal value.
- The bill of entry should identify the goods, quantity, origin, purpose and a supportable assessable value. Marketing, testing or demonstration purpose may explain why the supplier did not charge for the goods, but it does not by itself create a customs-duty exemption. Any exemption must be traced to a specific notification and its conditions.
- The audit file should reconcile the supplier’s pro-forma/commercial paperwork with freight, insurance, related-party information, identical/similar goods data and the intended end use. If the sample will later be re-exported, destroyed or consumed in testing, preserve the permission and disposal trail separately.
Current position
Control and decision map
| # | Control / decision step |
|---|---|
| 1 | Classify the sample and confirm whether any specific exemption notification actually covers the goods and purpose. |
| 2 | Record why there is no sale price and whether the supplier and importer are related or have compensating arrangements. |
| 3 | Apply the valuation-rule sequence rather than using an arbitrary token value. |
| 4 | Add freight, insurance and other includible elements where the valuation rules require them. |
| 5 | Make the bill-of-entry description consistent with the sample purpose and supporting documents. |
| 6 | Retain end-use, testing, re-export or destruction evidence if the sample is subject to a later condition. |
Evidence pack
- Supplier invoice/pro-forma invoice stating no charge and reason
- Product catalogue, purchase correspondence and comparable-price evidence
- Freight, insurance and landing-cost support
- Bill of entry and customs assessment/query trail
- Testing, consumption, re-export or disposal records
Worked example
A German vendor sends two machine sensors worth EUR 2,000 each in ordinary commercial sales but charges an Indian distributor nothing for field testing. The distributor should not declare EUR 1 merely because the invoice says “FOC”. It should support the customs value under the valuation rules, include relevant freight/insurance, and retain the test-use record.
Common mistakes
- Treating “free of cost” as automatic nil assessable value.
- Using an arbitrary nominal invoice value without valuation support.
- Assuming a marketing sample is exempt because it is not for resale.
- Failing to preserve evidence of a conditional end use or later re-export.
Frequently asked questions
Can a free sample have customs duty?
Yes. Duty follows classification, assessable value and any available exemption, not the supplier’s decision to charge zero.
Can the supplier put “value for customs purposes only”?
It may state a customs reference value, but the importer remains responsible for a value that meets Indian valuation rules.
Does “not for resale” eliminate duty?
No. It may explain purpose, but it is not a general exemption.
Official sources
- Central Board of Indirect Taxes and Customs - Customs Act, 1962 - Section 14: Valuation of goods (Section 14; current)
- Central Board of Indirect Taxes and Customs - Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (Notification 94/2007-Cus (N.T.), as amended; current)
- Reserve Bank of India - Master Direction - Import of Goods and Services (FED Master Direction No.17/2016-17; current reference)
Disclaimer
Educational and professional reference only; confirm the current law, rates and the facts of your case before relying on this page.