TM 314C: TOPIC 1- COMPONENTS

OF TOTAL LANDED COST

 LANDED COST

LC refers to a total amount consisting of dutiable

value, customs duty, customs fees and others charges
covering an importation of goods.
The landed cost is the basis for the 12% value-
added tax used by the Bureau of Customs which is
to be paid by the importer prior to release of goods
from customs custody.
 FORMAL ENTRY
COMPONENTS OF LANDED COST (BY SEA)
Dutiable Value P (CMO 22-2007/CAO 4-2004)
Customs Duty
Bank Charge
Brokerage Fee (CAO 1-2001)
Arrastre Charge (CMO 7-2014/CMO 26-1995)
Wharfage Due (CMO 7-2014/CMO 26-1995)
Import Processing Fee (CAO 2-2001)
Documentary Stamps
Total Landed Cost
 FORMAL ENTRY
COMPONENTS OF LANDED COST
(BY AIR)

Dutiable Value P (CMO 22-2007/CAO 4-2004)

Customs Duty
Bank Charge
Brokerage Fee (CAO 1-2001)
Import Processing Fee (CAO 2-2001)
Documentary Stamps
Total Landed Cost
 INFORMAL ENTRY
COMPONENTS OF LANDED COST
(BY SEA/AIR)

Dutiable Value P (CMO 22-2007/CAO 4-2004)

Customs Duty
Brokerage Fee (CAO 1-2001)
Documentary Stamps
Total Landed Cost

NOTE: FOB/FCA VALUE < P50,000.00 (Section 402, CMTA)

 COMPONENT OF LANDED COST:
BANK CHARGE

BANK CHARGE – is an expense paid by the importer to the

banks for their services.

INDICATORS FOR BANK CHARGE:

1. Letter of Credit (L/C)
2. Payment of Advance Deposit or Duty
 COMPONENT OF LANDED COST:
BANK CHARGE

FORMULA:
B/C = DV x 0.00125

Notes:
B/C – Bank Charge
DV – Dutiable Value
 COMPONENT OF LANDED COST:
BANK CHARGE

A shipment of 1 x 20’ van containing frozen meat was covered under

letter of credit with total FOB value of $15,000.00. The invoice shows
freight charges of $1,200.00 while the bill of lading shows freight
charges of $1,500.00. Compute the bank charge, net of value-added tax.
Use rate of exchange P45.00/$1.00.
COMPONENT OF LANDED COST:
BANK CHARGE

FOB $15,000
ADD INS $ 600
FRT $ 1,500
CIF $ 17,100
MULTIPL
Y ROE P45
DV P769,500
MULTIPL
0.00125
Y
BC P961.88
 COMPONENT OF LANDED COST:
BROKERAGE FEE

BROKERAGE FEE is an expense paid for the services rendered by

a customs broker or customs brokerage firm for making, signing
and filing of the required import or export entry for final release
from Bureau of Customs.
 COMPONENT OF LANDED COST:
BROKERAGE FEE

If: (DV > P200,000.00)

FORMULA:
B/F = DV x 0.00125 + P5,050.00

Notes:
B/F – Brokerage Fee
DV – Dutiable Value
 COMPONENT OF LANDED COST:
BROKERAGE FEE

If (DV > P200,000.00)

A shipment of electronic parts had total FCA value of $10,000.00.

The invoice shows freight charges of $1,000.00 while the airway
bill shows freight charges $1,200.00. The rate of exchange was
P44.80/$1.00 at the time of filing. Compute the brokerage fee,
inclusive of value-added tax.
COMPONENT OF LANDED COST:
BROKERAGE FEE
FCA $10,000
ADD INS $ 200
FRT $ 1,200
CIP $ 11,400
MULTIPL
ROE P44.80
Y
DV P510,720 (DV is greater than 200k)
MULTIPL
0.00125
Y
P638.40
ADD
P5,050
P5,688.40
MULTIPL
1.12 (VAT RATE)
Y
BF P6,371.01
 COMPONENT OF LANDED COST:
BROKERAGE FEE
(DV < P200,000.00)
I. FORMAL
TOTAL DUTIABLE VALUE BROKERAGE FEE
Up to P10,000.00 - P1,300.00
Over P10,000.00 – P20,000.00 - P2,000.00
Over P20,000.00 – P30,000.00 - P2,700.00
Over P30,000.00 – P40,000.00 - P3,300.00
Over P40,000.00 – P50,000.00 - P3,600.00
Over P50,000.00 – P60,000.00 - P4,000.00
Over P60,000.00 – P100,000.00 - P4,700.00
Over P100,000.00 – P200,000.00 - P5,300.00
 COMPONENT OF LANDED COST:
BROKERAGE FEE

(DV < P200,000.00)

A shipment of iron ores had a total CIF value of $4,500.00. The rate of
exchange was P40.00/$1.00 at the time of filing. How much is the
brokerage fee, exclusive of value-added tax?
COMPONENT OF LANDED COST:
BROKERAGE FEE

CIF $4,500
MULTIPL ROE P40
Y
DV P180,000 (DV is LESS than 200k)

BF: P5,300 (over 100k-200k)

 COMPONENT OF LANDED COST:
BROKERAGE FEE
(SPECIAL SERVICES)
BROKERAGE FEE
II. INFORMAL - P700.00
III. EXPORT - ½ of Import Rates
IV. OTHER SERVICES:
Shipside Permit - P1,300.00
Transfer Permit - P1,300.00
V. WITHDRAWAL ENTRY:
Complete Withdrawal - P2,000.00
Partial Withdrawal - P1,500.00 (per withdrawal
 COMPONENT OF LANDED COST:
BROKERAGE FEE

(SPECIAL SERVICES)

A shipment of coconut husks had a total CIF value of $30,000.00. The

rate of exchange was P43.50/$1.00 at the time of filing for exportation.
How much is the brokerage fee, net of value added tax?
COMPONENT OF LANDED COST:
BROKERAGE FEE

CIF $ 30,000
ADD
ROE P43.50
DV P1,305,000 (DV is greater than 200k)
MULTIPL
0.00125
Y
P1,631.25
ADD
P5,050
P6,681.25
DIVIDE 2
BF P3,340.63
 COMPONENT OF LANDED COST:
BROKERAGE FEE

(SPECIAL SERVICES)

An importer of toy parts wants to secure permit for transferring the goods
to a barge at the Port of Manila. How much is the brokerage fee, net of
value-added tax?
 COMPONENT OF LANDED COST:
BROKERAGE FEE

(SPECIAL SERVICES)

An importer of toy parts wants to secure permit for transferring the goods
to a barge at the Port of Manila. How much is the brokerage fee, net of
value-added tax?

IV. OTHER SERVICES:

Shipside Permit - P1,300.00
Transfer Permit - P1,300.00
 COMPONENT OF LANDED COST:
BROKERAGE FEE

(SPECIAL SERVICES)
A shipment of 100 metric tons of cement was filed and entered for
warehousing with total dutiable value of P1,500,000.00. Thereafter, five
partial withdrawals were made to take out the whole shipment. Compute
the total brokerage fee, net of value-added tax.
 COMPONENT OF LANDED COST:
BROKERAGE FEE
1. FILING BF:
DV P1,500,000 (DV is greater than 200k)
MULTIPL 0.00125
Y
P1,875
ADD P5,050
III. TOTAL BF:
P6,925 (FILING BF) P6,925 (FILING BF)
ADD P7,500(PARTIAL WITHDRAWAL
II. PARTIAL WITHDRAWAL P14,425 (TOTAL BF)
BF: P1,500 (bf rate for every withdrawal)
MULTIPL 5 (partial withdrawals)
Y
P7,500 (partial withdrawal bf)
 COMPONENT OF LANDED COST:
BROKERAGE FEE

(SPECIAL SERVICES)
A shipment of 500 crates of electrical equipment was filed and
entered for warehousing with total dutiable value of P850,000.00. A
complete withdrawal was made to take out the whole shipment. How
much is the total brokerage fee to be billed to the importer?
 COMPONENT OF LANDED COST:
BROKERAGE FEE
1. FILING BF:
DV P850,000 (DV is greater than 200k)
MULTIPL 0.00125
Y:
P1,062.50
ADD: P5,050
III. TOTAL BF:
P6,112.50 (FILING BF) P6,112.50 (FILING BF)
ADD: P2,000 (COMPLETE WITHDRAWAL
II. COMPLETE WITHDRAWAL BF: P8,112.50 (TOTAL BF)
MULTIPL 1.12 (VAT)
P2,000 (COMPLETE withdrawal bf)
Y: P9,086 (BF BILLED)