Handling of Import Duty can be broken down into a few steps :
Step 1 : record Import Duty payable ( compulsory )
- this can be done by SINV
- Dr Import Duty ( expenses )
- Cr custom accPayable ( current liability )
Step 2 : record payment for Import Duty ( compulsory )
- this will be done by PV
- Dr custom accPayable ( current liability )
- Cr bank ( current asset )
Step 3 : increase MA based on Import Duty (optional)
- this will be done by Reset MA ( either manually or by specifying Import Duty during GRN)
- Dr inventory ( current asset )
- Cr Import Duty ( expenses )
- it is to allow for Import Duty to be realized only upon Sales as part of Inventory Cost, rather than 1 lump sum as expenses
So, as you can see from the steps above, if user were to do Step 1, 2 and 3, but later perform PR ( which will revert the Reset MA done in Step 3 ), Import Duty should still be recorded correctly (as expenses).
What if my Import Duty GL is categorized as Current Liability and not Expenses / COGS ?
Well, not a problem.
Step 1 : record Import Duty payable ( compulsory )
- this can be done by SINV
- Dr Import Duty ( current liability )
- Cr accPayable ( current liability )
Step 2 : record payment for Import Duty ( compulsory )
- this will be done by PV
- Dr accPayable ( current liability )
- Cr bank ( current asset )
Step 3 : Compulsory
Option 1 : increase MA based on Import Duty
- this will be done by Reset MA ( either manually or by specifying Import Duty during GRN)
- Dr inventory ( current asset )
- Cr Import Duty ( current liability )
- it is to allow for Import Duty to be realized as COGS only upon Sales as part of Inventory Cost, rather than 1 lump sum as expenses
Option 2 : manual Journal to transfer Import Duty from Current Liability to Expenses / COGS
- Dr inventoryCost / expense / other expense or COGS GL ( expenses / COGS )
- Cr Import Duty ( current liability )
- this can be done as 1 lump sum at the end of every month
Various scenarios on how MA is affected by GRN and PR
Case 1 :
1. Create GRN with Item XYZ.
2. PR with Item XYZ.
3. After PR , the Item XYZ MA return to original MA cost before GRN
Case 2 :
1. Create GRN with Item ABC and Item XYZ.
2. Partial PR for item ABC.
3. After partial PR for Item ABC , the MA for Item ABC return to original MA cost before GRN.
Case 3:
1. Create GRN with Item ABC with import duty amount added ( search item>>item details>> optional details >> import duty)
2. PR for Item ABC.
3. After PR for Item ABC MA return to original MA cost before GRN.
Case 4:
1. Create GRN with Item ABC and Item XYZ with import duty amount added ( search item>>item details>> optional details >> import duty)
2.Partial PR for Item ABC
3. After partial PR for Item ABC, the MA for Item ABC return to original MA cost before GRN.
Reset MA by GRN:
1. Create GRN for item ABC.
2. Do reset MA for item ABC by GRN
(Inventory>>reset ma>> reset MA by GRN)