Landed Cost Calculation for Imports into India: Formula and Sheet

A landed cost calculation for an Indian import runs in five steps: convert the supplier price to rupees, add freight and insurance to reach assessable value, add customs duties, add clearance and delivery costs, and add IGST to cost only if you cannot claim it back. Divide the result by units received.

Terms used throughout:

• FOB (free on board) is the supplier's price at the port of origin, with freight and insurance not included.
• CIF (cost, insurance, freight) is FOB plus freight and insurance to the Indian port. Customs assesses imports on a CIF basis, and that figure is the assessable value.
• Bill of entry is the import declaration filed with customs. It shows assessable value and the duty paid.
• BCD is basic customs duty, charged on assessable value.
• Cess is an extra levy on top of duty.
• SWS is the Social Welfare Surcharge, 10% of customs duty (BCD in the simple case where no other customs duty applies).
• IGST is charged on assessable value plus BCD plus SWS.
• ITC (input tax credit) is the GST you set off against your own GST liability.
• HS code (Harmonised System) is the product classification code that fixes your duty rate.
• CHA is a customs house agent, the broker who clears the goods.

Use this layout, one row per SKU (stock-keeping unit, meaning one distinct product):

If your supplier invoices CIF, enter the invoice value in F and N and leave G and H blank.

As of October 2026, GST has only the 5%, 18% and 40% slabs (plus nil), in force since 22 September 2025 (PIB). Check the IGST rate for your HS code before using 18%. In the examples below, columns E and N use the same rate so the arithmetic stays readable.

Column P is the figure to feed into pricing and into your reorder point formula, where an understated cost distorts the stock value you are protecting.

Assessable value includes freight and insurance to the place of importation, commission (other than buying commission), packing, royalties and licence fees linked to the sale, and assists such as tooling or design supplied by the buyer. Inland transport and installation after import are excluded, according to the Directorate General of Valuation.

Two rules cause most of the errors:

• Deemed rates apply when you cannot document the cost. Under Rule 10(2) of the Customs Valuation Rules, 2007, if actual transport cost cannot be ascertained it is taken as 20% of FOB, and if insurance cannot be ascertained it is taken as 1.125% of FOB. On the example below, 20% of the ₹6,00,000 FOB is ₹1,20,000, against an actual freight invoice of ₹45,000. Keep the freight and insurance documents.
• The old 1% landing charge is gone. Notification 91/2017-Customs (N.T.) replaced the earlier practice of adding a notional 1% of CIF. Loading, unloading and handling charges incurred at the Indian port are not added to assessable value.

Port charges, CHA fees and inland haulage are therefore not dutiable. They are still costs of bringing the goods to your warehouse, so they belong in stock cost. Under Ind AS 2 (Indian Accounting Standard 2, Inventories) and AS 2 (Accounting Standard 2, Valuation of Inventories), import duties and taxes form part of purchase cost, except taxes you can later recover.

GST charged on CHA, port or courier invoices is ordinary GST on services. If you are registered and eligible, it is also claimable credit. The service charge goes in cost, and the GST on it stays out. Confirm eligibility with your chartered accountant.

Counting claimable IGST as cost overstated stock cost by 17.0% in our single-SKU example. This is our model: figures are rounded to the nearest rupee, and the BCD (10%) and IGST (18%) rates are illustrative, not those of any specific product.

Inputs: 1,000 units; FOB ₹6,00,000; freight ₹45,000 (invoiced); insurance not documented, so deemed at 1.125% of FOB; CHA and port charges ₹30,000; inland haulage ₹12,000.

A cost inflated by 17% pushes prices up or hides margin on every unit.

The IGST line stays in the cost when you cannot claim credit. That covers an unregistered importer, and a registered one whose goods go into supplies that do not qualify for credit. In those cases IGST is a real cost and goes into column O.

Split freight by weight or volume, matching how the carrier billed you. Split CHA and port charges by value or per bill of entry, and haulage by weight. Take duty as assessed on each bill-of-entry line. Different splits move cost between SKUs without changing the shipment total.

Our model, with ₹88 per US dollar as an illustrative rate:

• SKU A: 1,000 motors, US$7,000 FOB in total (US$7 each), 2,000 kg, BCD 10%.
• SKU B: 500 controllers, US$5,000 FOB in total (US$10 each), 200 kg, BCD 7.5%.
• Freight ₹60,000; CHA and port charges ₹40,000, split by value; haulage ₹15,000, split by weight; insurance 1.125% of FOB.
• Duty is computed with freight apportioned by value in assessable value, which is how we assume a bill of entry assesses each line. Use the figures on your actual bill of entry.

The weight split loads more freight on the motors because they weigh 2,000 kg of the 2,200 kg shipment. Splitting by value makes the controllers look dearer than they are. The gap here is a few per cent. It grows when a heavy, low-value item shares a shipment with a light, high-value one.

If you cannot claim credit, add each SKU's IGST to its landed cost. On the value split that is ₹898.73 per motor and ₹1,236.64 per controller.

Use the CBIC-notified exchange rate for the date the bill of entry is presented to convert assessable value, as section 14 of the Customs Act, 1962 requires. CBIC is the Central Board of Indirect Taxes and Customs. Take duty rates from the current tariff for your product's HS code.

Four points, as of October 2026:

• Surcharge. SWS is generally 10%, but 82 tariff lines with a cess are exempt. Notification 3/2026-Customs, effective 2 February 2026, revised the SWS and AIDC (Agriculture Infrastructure and Development Cess) treatment of specified goods. Look up your own HS line rather than assuming 10%.
• IGST rate. GST has only the 5%, 18% and 40% slabs (plus nil), in force since 22 September 2025 (PIB). Check the rate for your HS code against the notification before using 18%.
• Other duties. Anti-dumping duty, where it applies to your product and origin, sits in the duty stack before IGST. Ask your CHA whether any applies.
• Exchange differences. For stock cost, record the supplier invoice at the spot rate on the transaction date and take duty at the CBIC rate on the bill-of-entry date. Any difference when you settle the supplier invoice is an exchange gain or loss, not a cost of stock. Confirm treatment with your chartered accountant.

Run these six checks on every shipment. Each has a clear pass or fail.

A spreadsheet stops being enough when you have several shipments a month, partial receipts, and stock already sold before the last CHA invoice arrives. At that point, rebuilding cost per shipment by hand creates the errors the checks above are meant to catch.

Our landed cost feature allocates transportation, import duties, taxes, customs fees and other charges to inventory items, so each unit is carried at its true landed cost rather than its purchase price. That gives you margin visibility per item inside Salesforce, where your sales and purchase orders already sit. The logic is the one in the sheet above: costs by head, assigned to items, and a unit cost that follows the stock.

As of October 2026, landed cost is included in our Enterprise plan, which has custom pricing. For a wider view of what inventory software costs in India, see our guide to inventory management software cost. Our 15-day free trial gives full access with no credit card, and our sales team can walk you through your own shipment data.