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Author's profile photo Jignesh Mehta

Bonding & Ex-Bonding at Customs – Valuation for Imported Materials.

Imagine a scenario where your Company has imported some Goods & these are lying at Port (Custom’s Warehouse as Bonded Stock). Now you need to pay Import duties & taxes on these Imported material before you can sell / use them in Local Market.

Normally in above cases we do MIGO & with Movement Type 103 capture these stock as Blocked Stock. Thus the Goods are visible in our Plant as GR Blocked Stock. But as this Stock is Blocked Stock there is no Valuation (Financial Postings).

Thus what happens is you have paid for these Goods couple of weeks back & the stock (Inventory Valuation) is not yet reflected in your systems. These causes Accounting & Auditing problems as the Books of Accounts are not showing correct Picture. Say it is 31st March, your Company need to finalize the Balance Sheet & the Stock is not reflecting the true picture as the Customs Bonded Stock is not Valuated in SAP system.

What to do in these cases?

In SAP we should create a Dummy Plant (say Port or Customs Warehouse,etc). This Plant will not have any Excise / Taxes settings & so it will not be liable for Taxes.

Now as soon as the Material reaches the Custom’s warehouse, you can do MIGO in this Plant with movement Type 101. Thus the Imported Stock will be reflected in your Books & also the valuation will be done in Accounts to the extent of Amount paid to Vendor for the Material.

Now, normally Companies release partial Goods from Custom’s Warehouse by paying Import Duties. Thus as & when you release the Materials from Custom’s Warehouse, you need to post Plant to Plant stock transfer from Dummy Plant to your actual Plant. During this Stock Transfer you can also book the Import Duties, other charges like Freight, Handling, etc & the same will be posted to Material Cost.

Thus at any given point of time the Material Valuation on your Books of Accounts will reflect a correct picture & Imported stock will also be valuated to the extent of Amount paid for this goods till date.


Jignesh Mehta

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      Author's profile photo Former Member
      Former Member

      Thanks for sharing.

      Could you please explain it in more details like during MIGO in Port, how custom duty was paid, how these was forwarded to destination Plant etc.


      Author's profile photo venu gopal
      venu gopal

      Hi Jiginesh sir...

      Nice explanation Sir....:)

      Author's profile photo Pavalur Doraivel
      Pavalur Doraivel

      Thanks for valuable input.

      Author's profile photo Liu Zhijie
      Liu Zhijie

      Hi Jiginesh,


      Could you please help to clarify more detail process how we can book the import duties thru stock transfer? movement type with 301?