Understanding Customs Duty Processing
PeopleSoft enables you to record customs duties for imports into India. Customs duties are recorded on the following transactions:
Purchase orders in Purchasing.
To create a purchase order for imported items, use the tax transaction type of Direct Import. The tax transaction type is derived from the supplier tax applicability definition. The Customs duties' Tax Calculation Code and associated tax components are defaulted to import POs based on the tax determination structure and the default hierarchy using parameters such as Supplier Category or Benefit ID.
Bill of Entry worksheet in Purchasing.
The Bill of Entry (BOE) worksheet is created from a dispatched import PO or another BOE. When you save a new BOE, actual customs duties are determined and calculated for the BOE. When the imported goods arrive at customs, the BOE is submitted to the customs authorities along with other shipping documentation. You update the BOE based on the assessment by customs officials. Once the BOE is in Assessed or Closed status, no changes can be made and customs duties will not be recalculated.
Third-party voucher in Payables.
To pay the customs officials, you create a third-party voucher for the customs duties. This voucher is paid before you receive the goods, unless you are using a bonded warehouse. A bonded warehouse requires receiving before creating the voucher. When creating the voucher, you can manually change the computed customs duties to the actual amounts determined by the customs authorities. Issue the payment and send it along with the BOE to the appropriate government agency. When the government receives your payment and releases your goods, create the receipt ID in Purchasing. You must then reopen the voucher and manually associate the receipt ID with the voucher. This insures that the Landed Cost Extract process can match the actual customs duties from Payables with the calculated customs duties recorded in Inventory. The voucher splits the customs duties into recoverable and nonrecoverable amounts based on the recoverable tax percentage defined for each customs duty. Only the nonrecoverable amount is passed to Inventory by the Landed Cost Extract process.
Receipts into Purchasing.
After the imported goods have cleared customs, you receive the items into Purchasing. Like all receipts, you create the receipt ID based on the PO lines. However, for imported purchase orders, you must associate a BOE line (from a BOE in Assessed status) with each receipt line. The quantity open for receiving is the BOE quantity. Customs duties are not recalculated on the receipt.
Putaway in Inventory.
After the items are received, the Process Receipts process (PO_RECVPUSH) passes item costs to Inventory and Asset Management. For inventory items, this process also creates landed cost transactions for nonrecoverable customs duty amounts. The nonrecoverable customs duty amount is derived from the BOE line duty record for the corresponding receipt line. The Load Staged Items process (INPSSTGE) and Complete Putaway process (INPPPTWY) in Inventory complete the putaway process.
Internal supplier excise invoices in Purchasing.
After the items have been received into Purchasing, you can create an internal supplier excise invoice. With imported items, the internal supplier excise invoice records customs duties instead of excise duties and sales taxes or VAT. Lines from the BOE are copied into the internal supplier excise invoice. Customs duties cannot be changed or recalculated on the internal supplier excise invoice. Only the recoverable customs duties are recorded.
Register Update process.
After the internal supplier excise invoice has been completed for a receipt of imported items, the Register Update process posts the customs duty information into the Indian tax registers and creates accounting entries for the duties.
Landed cost adjustments in Cost Management.
The inventory item cost can be adjusted to the actual nonrecoverable customs duties amounts once the third-party voucher (from Payables) has been matched and the Landed Cost Extract, Transaction Costing, and Accounting Line Creation processes are run.