Interpretation of the Term "Landed Cost"

January 13, 1959 BIR RULING NO. 042-59 Mr. Jose F. Sugay General Manager Filipino Baker's Ass'n., Inc. 1799 Rizal Avenue Extension Caloocan, Rizal S i r : With reference to your letter dated December 29, 1958, please be advised that all expenses incurred by the importer up to the time the imported goods are released from customs form part of the landed cost of the imported goods, Accordingly, handling expenses incurred while goods are still in customs custody, such as arrastre, form part of the landed cost, but those incurred thereafter, shall no longer form part thereof. If the handling expenses have reference to those incurred outside customs premises, they shall not form part of the landed cost. Likewise, transportation expenses incurred in delivering goods from the customs premises to the importer's bodegas do not form part of the landed cost, because they constitute expenses incurred after their release from customs custody. Please be advised further that the term "landed cost" has been consistently construed to mean the invoice value plus freight, postage, insurance, commission, customs duty and all similar charges, or all expenses incurred by the importer before the release of the goods from customs custody. Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue