What constitutes “Duty Draw Back” and what are the types of “Duty Draw Backs” in Custom Administration?           (5 marks)

Obiba JK Enterprise imports component parts from China and assemble them into various forms of office equipment. On 1 January 2016, components parts were imported with the following details:
Cost of containers containing the goods                                                                    $2,200.00
Cost of packing for labour and materials in China                                                    $550.00
Cost of materials used in China in the production incurred by Obiba JK               $15,600.00
Cost of Tools inserted in the components incurred by Obiba JK                            $3,750.00
Cost of Engineering development and Design paid by Obiba JK                            $630.00
Royalties and licences paid by the Obiba JK                                                              $330.00
Cost of labour and others in China (not included above)                                         $7,400.00
Shipping and transport cost to the Tema Habour                                                     GH¢16,200.00
Loading, unloading and handling charges up to Tema habour                               GH¢5,400.00
Cost of marine insurance                                                                                              GH¢2,958.30
Assembling overhead cost incurred at Obiba JK’s factory                                        GH¢23,400.00
Fees for freight services by a shipping company up to Tema Harbour                   GH¢3,700.00
Additional information:

• The Chinese exporter allows trade discount of 2% on the cost of the goods. (yet to be accounted for)
• Excise duty paid in China is $560.00 on the goods. (this is included in the cost of labour and others)
• Contingent discounts and rebates allowed by the Chinese company is 1% of the cost of the goods, before trade discount and excise duty. (this has been accounted for in the above figures)
• Technical assistance from the Chinese company for the assembly of the goods amounted to GH¢3,000.00 after the goods have arrived at Obiba JK’s factory.
• Average exchange rate during the entry for the import was $1= GH¢3.11
• Import duty is 20%

Required:
i) Compute the Cost, Insurance and Freight, clearly showing workings of each component.                                           (9 marks)

ii) Compute the VAT/NHIL                                                                                                                                                 (1 mark)

Discuss Duty Draw Back as Custom Regime.                                                                                                                (4 marks)

With reference to the CEPS (Management) Law 1993, PNDCL 330 clearly outline the basis for determining the customs value of imported goods into Ghana.                                                                                                                  (10 marks)

The Government intends to discourage drastically, the importation of Television Sets and rather create local demands for Osafo Electronics as part of efforts to “Grow Made in Ghana products”.
The following data is relevant:
4,000 pieces of Television Sets at a cost of GHS2,200.00 per one were imported in March 2015 from USA by Kamus Enterprise. The cost of freight was GHS100 per a Television Set via KLM Airline.
Additional information:
Rate of Duty 20%
Rate of Duty: GHS80 per a Television set

(Note: Assume that the television sets were imported by air).

i. Using the above, compute the taxes payable under both the advalorem and specific methods.                                      (6 marks)

ii. Advise the government on which method would help achieve The Government’s intended action and why?              (2 marks)