Custom Duty Transaction step by step

Custom Duty / Bill Of Entry(BOE)

Customs Duty Payment and Accounting

Overview

Customs Duty liability arises on import of material. Customs duty has to be paid in advance i.e.,before the material is received in stores. The clearance of goods imported would be possible only after submission of the Bill of Entry in the specified format. Bill of Entry in India Localization helps you manage the documentation process and account for the liability arising from the transaction. 

Bill of Entry helps you manage the import process. Using BOE you can perform the following tasks:

• Capture the vital information required for the creation of the Bill of Entry in the  format specified by the Bill of Entry (forms) regulation.

• Record the Total Customs Duty liability arising form the transaction.

• Create an AP Invoice for the total Customs Duty liability arising from the transaction.

• Maintain account for the Customs Duty Liability.

• Control receiving transactions until the Customs Type of taxes arising from the transaction are matched to the corresponding Bill of Entry.

• Enables write-off of the disputed amount and amount that could not be applied fully to the transaction.

In this Manual we will have a look at entire activities relating to Import Transaction.

1st Step: Create localized PO with currency (USD)

1.Put operating unit then click on currency tab and change currency from INR to USD and rate

type-User and enter rate=Rs.50 then click on done.

Then put supplier and ship to & Bill to site then put item, Qty, Price, Need by date

Then click on shipment tab and look in to org given then click on distribution and give PO charge ac

 

Then come back and save and don’t approve the PO. Close the sheet

Give default tax category and click on All lines ,it will ask to yes. Then save and click on Taxes

and change currency from USD to INR. Then close and save then open and approve .

 

2. Here in this case 100 USD @ 50 Hence its 5000 INR. But Assessable value will be calculated

by Custom Authority with addition of extra charges. So suppose Assessable value is 6000 INR

calculated by Custom Authority.

Note: In case the client wants BOE Amount at PO to arrive at landed cost then the assessable

value can be entered with PO Price. This can be changed at receipt level with actual.

2nd Step: BOE Entry

Responsibility-Payable super user

Path:- India localization—Invoice entry—BOE invoice

Put All details required inside form

 

Click on BOE details and enter the tax details

 

Then put save it will generate a BOE invoice. Go to concurrent and take the invoice no.

Note: This BOE amount 1433.69 should not be more than receipt tax amount.Otherwise we cant able to apply BOE at receipt level.

 

Click on View output and get the invoice no.

Go to invoice form and call that BOE invoice and validate and make the payment and do create accounting.

Note: Create Accounting will be done by authorized user.

 

3rd Step: Localized Receipt

Go to purchase Responsibility and open localized receipt form and Put new and call that PO.

Put necessary details in receipt form. Then save .

 

Go to concurrent and see the its processed.

Close the form and call again same receipt no generated.

 

Click on tax and give assessable value column and put apply. Close and save.

 

Then Click on Apply BOE tab. Put receipt amount and save .

Then close the form ,it will ask to accounting ,click on yes.

 

Then run the pay on receipt concurrent in purchase responsibility.

Invoice will generate in USD then put the rate of currency then validate and make payment (In payment form also give the rate of currency) and do create accounting.

Note: Create Accounting will be done by authorized user.

Custom duty Full Flow Accounting Entry
Activity	Nature of Account	Account Description	Debit	Credit
BOE Invoice	40.000.276550.0000-Asset	Custom Duty/Bill of Entry	1434
BOE Invoice	40.000.371110.0000-Liability	Sundry Creditor		1434
BOE Invoice Payment	40.000.371110.0000.00-Liability	Sundry Creditor	1434
BOE Invoice Payment	40.000.371360.0000.00-Asset	Bank Ac		1434
BOE Invoice Round off	40.000.276550.0000.00-Asset	Custom Duty/Bill of Entry	0.79
BOE Invoice Round off	40.000.676550.0000.00-Expense	Custom write off Ac		0.79
Receiving	40.000.262300.0000.00-Asset	Receiving Inventory Ac	1433.69
Receiving	40.000.276550.0000.00-Asset	Custom Duty/Bill of Entry		1433.69
Delivery	40.000.262200.0000-Asset	Inventory RM	1433.69
Delivery	40.000.262300.0000-Asset	Receiving Inventory Ac		1433.69

Frequently Asked Question

1. How is Per landed cost calculated for a quote that includes localization taxes?

Per landed cost = Unit Price + [Sum (non cenvatable taxes ) / qty ]

You can view Per Landed Cost through Quote Analysis (localized) screen by navigating through India Local Purchasing RFQ and Quotations Quote Analysis (localized)

2. Is there any way that we can create a Bill of Entry without having to enter all Item details?

You can check the 'BOE Item Independent Flag' while you are creating the BOE Header. You need to enter only a Single line with Total Customs Duty Amount. This BOE will be available across all receipts lines.