Customs Duty and Import Costs in Odoo: Landed Cost by Shipment

Short answer: in Odoo 19, make each import charge a service product with Is a Landed Cost ticked (sea freight, insurance, clearing charges, customs duty) and give it a default split method. When each bill arrives, add those products to it, click Create Landed Costs, choose the receipts of that shipment, then Compute and Validate. Odoo adds the charges to the value of those goods, so their FIFO or AVCO cost includes them. Landed costs only work on products whose category uses FIFO or AVCO, and recoverable IGST stays out.

This is the practical import workflow. For the concepts behind it, start with my explainer on inventory valuation and landed costs in Odoo.

Applies to

• Odoo version: Odoo 19. The Odoo 20 landed costs and valuation documentation reads the same as Odoo 19’s. The Odoo 20 code adds two things: an Apply On field on landed cost products, to limit a charge to certain products, and receipts pre-filled from the bill’s purchase orders when you click Create Landed Costs.
• Edition: Community and Enterprise. Landed costs are part of the standard Inventory app. The company-wide valuation settings live in Accounting ‣ Configuration ‣ Settings, which needs the Accounting app (Enterprise); in Community, set the costing method and valuation on each product category instead.
• Apps: Inventory, Purchase, and Invoicing or Accounting. In Community, read Invoicing where a menu path says Accounting. The bill of entry fields come from the Indian localisation.

Before you start

1. FIFO or AVCO. In Inventory ‣ Configuration ‣ Product Categories, the imported products’ category needs Costing Method set to First In First Out (FIFO) or Average Cost (AVCO). Products on Standard Price are skipped.
2. Know your valuation mode. The same category has Inventory Valuation: Periodic (at closing) or Perpetual (at invoicing). With Perpetual, validating a landed cost posts a journal entry. With Periodic, Odoo raises the stock value without an entry and your accounts catch up at the periodic closing. Choose with your accountant.
3. Weights and volumes. To split freight by weight or volume, fill in Weight and Volume on each product’s Inventory tab. If they’re empty, Odoo quietly splits that charge equally instead.
4. Foreign currency is set up. If the supplier bills in USD, follow multi-currency in Odoo for importers and exporters first.
5. Agree what’s a cost. Customs duty, freight, insurance and the clearing agent’s fees are normally costs. IGST at customs and GST on the agent’s own fee are normally recoverable. Confirm both with your tax adviser.

Step by step

1. Switch it on. In Inventory ‣ Configuration ‣ Settings, under Valuation, tick Landed Costs and click Save. Then choose the Default Journal for landed cost entries.

2. Create the landed cost products. In Inventory ‣ Products ‣ Products, click New for each charge. Set Product Type to Service. On the Purchase tab, in Vendor Bills, tick Is a Landed Cost and choose a Default Split Method:

   Split method	How Odoo divides the charge	Good for
   Equal	The same amount for each product line on the receipt, whatever the quantity	Fixed fees per item line
   By Quantity	Per unit received	Handling of similar-sized units
   By Current Cost	In proportion to each line’s value	Insurance; duty when every item has the same rate
   By Weight	In proportion to weight	Freight charged by weight
   By Volume	In proportion to volume	Freight charged by cubic metre

3. Buy and receive. Confirm the foreign-currency purchase order and validate the receipt when the goods arrive. Landed costs can only be applied to validated transfers, so the receipt comes first.
4. Record the bill of entry. On the overseas supplier’s bill, with GST Treatment set to Overseas, the Other Info tab shows an Import India group. Fill in Bill of Entry Number, Bill of Entry Date and Port code.
5. Freight forwarder’s bill. In Accounting ‣ Vendors ‣ Bills, click New, choose the forwarder and add your Sea Freight product. Save, then click Create Landed Costs. Odoo takes each line’s untaxed amount, so GST on the forwarder’s fee isn’t added to stock. A USD line is converted to rupees at the bill’s exchange rate.
6. Pick the shipment. On the landed cost, choose the receipt in Transfers. If one container covered two purchase orders, select both receipts. Click Compute and check the Valuation Adjustments tab: Original Value, Additional Landed Cost and New Value per product. Then click Validate.
7. Clearing agent’s bill. Repeat with Clearing Charges and Customs Duty lines. This bill often reaches you after the goods are on the shelf, sometimes after some are sold; Odoo still accepts it (see the timing point below). Record any IGST the agent passes on the way your tax adviser specifies, never as a landed cost line.
8. Different duty rates. After Compute, the Additional Landed Cost column stays editable while the landed cost is a draft. Overwrite each product’s duty with the bill of entry figure. Each charge must still add up to its total, or Odoo refuses to validate.
9. Duty paid straight to customs. If you pay through ICEGATE rather than through an agent, record the payment as usual, then create the landed cost from Inventory ‣ Operations ‣ Landed Costs with New. Set each line’s Account to the account the payment went to, so that with Perpetual valuation the entry moves the amount into stock value. Agree that account with your accountant.

Worked example: bicycle parts from Taiwan

A Ludhiana importer buys 500 freewheels (0.4 kg each) and 200 crank sets (1.5 kg each) from a Taiwanese supplier in USD. At an illustrative ₹84 to the dollar, the receipt is valued at ₹2,52,000 for the freewheels and ₹3,02,400 for the crank sets. Three bills follow. All amounts are illustrative; the duty is a total from the bill of entry, not a rate.

Charge	Split	Total	Freewheels	Crank sets
Sea freight	By Weight	₹50,000	₹20,000	₹30,000
Marine insurance	By Current Cost	₹5,544	₹2,520	₹3,024
Clearing charges	Equal	₹14,000	₹7,000	₹7,000
Customs duty	By Current Cost	₹97,350	₹44,250	₹53,100
Total		₹1,66,894	₹73,770	₹93,124

• New unit cost: freewheels ₹3,25,770 ÷ 500 = ₹651.54; crank sets ₹3,95,524 ÷ 200 = ₹1,977.62.
• Why By Weight: the 200 kg of freewheels carry 40% of the freight. By Quantity would load them with 500 of 700 units, about ₹35,714, although they’re the lighter consignment.
• Why Equal is risky: each line gets ₹7,000 whatever its quantity, so a freewheel carries ₹14 of clearing charges and a crank set ₹35.
• Timing: the clearing agent’s bill arrives three weeks later, after 50 crank sets have been delivered, and the product uses FIFO with no older stock. Odoo adds the full ₹60,100 crank-set share (₹7,000 plus ₹53,100) to the receipt’s value. With Perpetual valuation, the journal entry moves three quarters of it, ₹45,075, into stock; the remaining ₹15,025 stays in expense as part of the cost of what was already sold.

Under AVCO, each share raises the average cost of what’s on hand; the AVCO documentation counts landed costs in the purchase price. Under FIFO, the units left from that receipt carry the higher value into future cost of goods sold. Either way, units delivered before the landed cost aren’t revalued.

What you should see

• On the bill: the landed cost lines flagged in the Landed Costs column (an optional column), a Create Landed Costs button, and afterwards a Landed Costs smart button.
• On the landed cost: the charges on Additional Costs, the split on Valuation Adjustments, and status Posted after validation.
• With Perpetual valuation: a journal entry in the landed costs journal, debiting stock valuation.
• On the product: a higher Cost.

Troubleshooting

“Landed costs can only be applied for products with FIFO or average costing method.” The category uses Standard Price. Change the Costing Method, with your accountant’s agreement.

No Create Landed Costs button on the bill. The line’s product isn’t a service with Is a Landed Cost ticked, the bill already has landed costs (use the smart button), or your user isn’t an Inventory administrator.

The receipt isn’t in the Transfers list. It hasn’t been validated yet.

A By Weight split came out equal. The products have no Weight, so Odoo fell back to an equal split. Fill in weights, then Compute again.

A validated landed cost is wrong. It can’t be cancelled. Odoo’s message suggests creating a negative landed cost to reverse it.

No journal entry after validation. The category uses Periodic (at closing), so the value flows into the closing entry instead.

Related setup

• Cross-docking in Odoo
• Vendor bills and three-way matching in Odoo
• How to set up GST in Odoo 19
• How Odoo costs manufactured products
• Purchase in Odoo: from RFQ to purchase order
• Importing regularly and want product costs you can trust? See Odoo implementation.

Official references

• Odoo 19 documentation: Landed costs
• Odoo 19 documentation: Inventory valuation (Accounting)
• Odoo 19 documentation: Average cost valuation
• Odoo 19 documentation: Multi-currency system
• Odoo 19 documentation: India (fiscal localisation)
• Government of India: CBIC and ICEGATE, for duty rates and bill of entry rules

How this guide was checked: menu paths, field names and behaviour were checked against the Odoo 19 documentation and the Odoo 19 code (the landed costs module, stock valuation and the Indian localisation’s bill fields) in October 2026. The worked example is illustrative and wasn’t run on a live database, so there are no screenshots; labels can vary slightly with your installed apps and language.