High Seas Purchase, PO Conditions ..

[former_member548590]

Our Client do high seas purchase, in which they pay vendor : Gross Price - less Custom Duty & less CHA charges.

Gross Price 1000

Less Custom Duties 10

Less CHA Charges 5

Amount to Pay 985

Client raises the PO with above conditions and handover it to the vendor.

Most of high seas purchase is sell out to the customer on the way (customer is decided only after purchase) but there are some cases in which Client refuses to sell the consignment and procure it for themselves by paying customs duties, CHA Charges, loading charges, freight charges, taxes and other charges.

My concern is how can I show this in PO as PO is already given to Vendor with Custom Duties & CHA charges?.

*custom Duty would not be same what we have deducted in Vendor PO and what we will actually pay at port as purchase is done a month before and on same day custom duty is calculated & in future +/- in custom duty is to bear by buyer.

[JL23]

What has the vendor to do with Custom Duties & CHA charges in your PO? Does he pay it or you?

Price components that are only relevant for you and not to your vendor should not be printed on a PO anyway.

If you want to be accurate then you have to change your PO in the last minute before the goods arrive to reflect the right custom duties, which means you create a second item in the PO and change the first item so that you finally have the right amount per item.

[former_member548590]

Client is in import commodities trading business so he buys commodities on high seas purchase and sale it when the consignment is on the way or before arrival at port and he keeps the difference.

What has the vendor to do with Custom Duties & CHA charges in your PO? Does he pay it or you?

Gross price offer by vendor/broker is inclusive of custom duty and CHA Charges. So to avoid the double pay of custom duty & CHA, they are deducted from Gross price and client need this information in PO.

Price components that are only relevant for you and not to your vendor should not be printed on a PO anyway.

Client will check all conditions in PO - what amount has been paid to the vendor and what other expense has incurred, as all cost has to uploaded on inventory and costing play a very crucial role in trading.

If you want to be accurate then you have to change your PO in the last minute before the goods arrive to reflect the right custom duties, which means you create a second item in the PO and change the first item so that you finally have the right amount per item.

Explain second item. I haven't got it.?