Gamma Pizzacraft Lanka (Private) Limited v. S.P Charles et al – CA WRIT/17/2019-2021

In Gamma Pizzakraft Lanka (Private) Limited v. S.P. Charles (Director General of Customs) & Others, the court examined whether payments by the franchisee—comprising a 6% continuing fee and a 5% advertising contribution made to the franchisor under a franchise agreement—should be included in the customs “transaction value” of imported goods according to Schedule ‘E’ of the Customs Ordinance. The dispute centered on the interpretation of Articles 1(1)(c) and 8(1)(d) as to whether such payments represented direct or indirect proceeds to the Seller, justifying adjustment of the transaction value. The court held that the evidence did not establish that these franchise-related fees accrued directly or indirectly to the Seller, nor did it support a finding of fraudulent customs declarations. The