How to Calculate Landed Cost of Imports
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Importing goods can be profitable, but only if you know the landed cost—the total expense of bringing products from a foreign supplier to your warehouse. Many importers underestimate costs by only considering the product price, but hidden charges like customs duty, GST, and clearance fees can impact margins. At Befach, we help businesses calculate accurate landed costs for smarter pricing and profitability.
What is Landed Cost?
Landed cost is the final cost of an imported product, including purchase price, shipping, insurance, customs duties, taxes, and handling charges. It ensures you know the true cost per unit before selling in the Indian market.
Formula for Landed Cost
Landed Cost = Product Cost + Freight + Insurance + Customs Duty + GST + Handling & Clearance Charges
Step-by-Step Breakdown
- Product Cost (FOB/CIF) – Price paid to the supplier.
- Freight & Insurance – Shipping and insurance charges.
- Customs Duty – Based on HS Code, as per CBIC Customs Tariff.
- GST on Imports – As per GST Portal, applied on CIF + Duty.
- Handling & Clearance Charges – Port handling, CHA fees, and ICEGATE customs clearance.
Example Calculation
Suppose you import goods worth $10,000 (CIF). - Customs Duty: 10% = $1,000 - GST: 18% on ($10,000 + $1,000) = $1,980 - Handling & Clearance: $200
Total Landed Cost = $10,000 + $1,000 + $1,980 + $200 = $13,180
Why Calculating Landed Cost Matters
- Helps set accurate product pricing
- Prevents hidden cost surprises
- Ensures compliance with DGFT import policies
- Improves profit margin planning
How Befach Helps Importers
At Befach, we provide end-to-end support for importers:
- Sourcing products at the best prices
- Logistics and freight management
- Customs clearance and compliance
- Consultation for landed cost calculation
Quick Summary
The landed cost of imports includes product cost, freight, insurance, customs duty, GST, and clearance charges. By calculating it correctly, importers can price products profitably and stay compliant with CBIC, GST, and ICEGATE regulations. With Befach’s expertise in sourcing, logistics, and clearance, businesses can import smarter and maximize profits.