How to Calculate the Duty on the Value that Includes Freight

Dear Sir


We are distributors of imported machine, which we import and market it here. We purchase in euros and we sell in INR either passing CENVAT or just with standard invoice depending on the customer. In tally we enter purchase voucher in Euros with each Stock item created with CVD, Cess etc.


Our questions are as under:


How do we incorporate the customs duty details in purchase as a cost. If suppose a separate entry is to be done for customs duty how will tally arrive at cost price.


In case the duty is to be passed in the Purchase voucher itself, how to make tally calculate duty on the value that includes freight. I have included freight as 'user value' but still duty is only calculated on assessable value which is not inclusive of freight.


Thanking you in advance.


Subramanian. N from India

Subramanian. N, you have asked good accounting question. You have to do one more thing. If you want to calculate duty on the value includes freight, you have to  create freight ledger account under direct expenses. Yes to use for assessable value calculation. Apportion for should set as Excise and VAT. Method of apportion should be based on value.



In case of Based on Value method of apportion, freight expenses will be apportioned based on the Value of the Stock item.

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freight expense is 5,000
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Value of Item X is 50,000
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Value of Item Y is 60,000
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Apportionment of freight expenses to Item X: 5,000*50,000/1,10,000 =2272.73
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Apportionment of freight expenses to Item Y: 5,000*60,000/1,10,000 = 2727.27
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Assessable Value of Item X (52,272.73) = Value of Item X (50,000) + freight expenses (2,272.73)
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Assessable Value of Item Y (62,727.27) = Value of Item Y (60,000) + freight expenses (2,727.27)