Incoterms Computation

Question 1

• Cost
• A component of dutiable value (together with freight, insurance, and adjustments)
• Most basic computation.

Answer 1

CV or Customs Value

Question 2

Are necessary expenses for the transaction under incoterms.

Answer 2

O/C or Other charges

Question 3

Are other charges incidental to placing the goods at the carrying vessel or aircraft in the country of exportation (origin)

Answer 3

Dutiable O/C
or
Origin O/C

Question 4

Are other charges included in the invoice (contract price) but must NOT be included in the dutiable value. These are expenses incurred in the PH.

Answer 4

Destination O/C

Question 5

These are other charges not included in the invoice but are still subject to duty. To be adjusted and added to the cost, insurance, and freight value (CIF) to derive the total value.

Answer 5

1. C - Commission
2. A - Assist
3. R - Royalties
4. P - Proceeds
5. P - Packing
6. I - Insurance
7. T - Transportation Cost
8. L - Loading
9. U - Unloading
10. H - Handling
11. H - Hauling

Question 6

What consists Ex-Works?

Answer 6

1. Cost of raw materials.
2. Cost of labor.
3. Packing
4. Labelling
5. Marking
6. Mark-up (Profit)

Question 7

Customs Value can be derived by these incoterms. Enumerate.

Answer 7

E and F Terms:

Cost = Exw + Origin O/C
= FCA
= FAS
= FOB

Question 8

Incoterms, where both of them have a customs value equivalent to FOB since delivery of both, is “on board vessel.”

Answer 8

CFR (FOB + Frt)

CIF (FOB + Frt + Ins)

Question 9

Incoterms where customs value is equivalent to FCA since delivery is up to the carrier.

Answer 9

CPT (FCA + Frt)

CIP (FCA + Frt + Ins)

Question 10

Incoterms where two other charges are both included in the seller’s obligation to deliver the goods.

Answer 10

DAP
DPU
DDP

Question 11

To derive the customs value under D category, what terms should be applied?

Answer 11

FCA - Air shipment

FOB - Sea shipment