Duty Entries and the Duty Lifecycle

As a Purchasing Agent
I want to understand what duty entry type is created when I receive goods
So that I can verify the system has handled the duty obligation correctly

Setup:

No setup required — entries are created automatically. The entry type depends on the following rules:

1. If the vendor's Gen. Bus. Posting Group has a line in Duty Posting Setup for the item's Duty Code with Duty-free enabled → a Carryforward entry is created (settled immediately, no payable obligation).
2. If the location is a Customs Warehouse and the Duty Code has Warehousekeeper enabled → a Suspension entry is created (duty tracked, not yet payable).
3. In all other cases → an Imposition entry is created (duty is payable).

Open Duty Entries after posting to verify the entry type and duty amount.

As a Sales Order Processor
I want to check the duty entries created after posting a sales shipment
So that I can confirm the duty settlement chain is correctly linked

Setup:

1. Post a sales shipment for a duty-subject item.
2. Open Duty Entries and filter on the item and posting date.
3. Locate the outbound entry (negative quantity) — it should show the same Duty Code as the inbound entry and have an Applies-to Entry value pointing to the original Imposition entry.
4. If the customer is duty-free, a Reimbursement entry is also created automatically.

Note: The system traces the item application chain to find the correct inbound duty entry to link against. If the item has been through multiple transfers or production steps, the applies-to chain may span several entries.

As a Sales Order Processor
I want to understand how duty is handled when a customer returns goods
So that I know whether the previously settled duty is correctly reversed

Setup:

1. Post a sales return receipt for a duty-subject item.
2. Open Duty Entries and check for a new positive entry for the returned quantity.
3. If the original sale was to a duty-free customer, the return re-creates an Imposition entry (the goods are back in stock and duty is again payable).
4. If the original sale was a standard duty sale, the return creates an Imposition entry for the returned quantity.

As a Purchasing Agent
I want to understand how duty is handled when I return goods to a vendor
So that I know whether the duty obligation has been correctly reduced

Setup:

1. Post a Purchase Return Shipment for a duty-subject item.
2. Open Duty Entries and verify that a negative outbound entry has been created, applied against the original inbound Imposition entry.
3. If the vendor is on a duty-free posting group, a Reimbursement entry is also created.

As a Production Planner
I want to understand what duty entry is created when I post production output
So that I know how the duty on finished goods produced from duty-subject components is tracked

Setup:

1. Post a production output journal for an item that has Item Duty Setup.
2. Open Duty Entries and check for an entry with Entry Type Imposition.
3. The Imposition entry for output is immediately marked as Settled if the location is not a Customs Warehouse. If it is a Customs Warehouse with Allow Output Posting enabled, a Suspension entry is created instead.

Note: Output entries that are immediately settled represent production output where the duty obligation flows through from the components. The roll-up mechanism (see the Duty Settlement article) is used when the duty content of a finished item should reflect the accumulated duty from its BOM components.

As a Production Planner
I want to verify how duty is handled when components are consumed in production
So that I understand whether the component's duty obligation is transferred to the finished good or settled at consumption

Setup:

1. Post a consumption journal for a duty-subject component.
2. Open Duty Entries and locate the outbound entry for the consumption. It should apply against the original Imposition entry for the component.
3. If the consumption location has Allow Duty-free Consumption enabled (customs warehouse), the Imposition is force-settled and a Reimbursement entry is created — net duty is zero.
4. If the location is not a customs warehouse, the outbound entry follows the standard carryforward chain.

As a Accountant
I want to understand when Carryforward entries are created
So that I know why some purchases do not generate a payable duty obligation

Setup:

No action required — Carryforward entries are created automatically. They occur when:

• A purchase is received from a vendor whose Gen. Bus. Posting Group matches a Duty-free line in Duty Posting Setup for the relevant Duty Code.

Carryforward entries are immediately marked as Settled = true. They still appear in Duty Entries for traceability, but they do not appear in the settlement run and require no further action. Their purpose is to track the duty content of goods whose duty was already handled by the supplier.

As a Business Manager
I want to create duty entries for historical transactions when a new item is added to Item Duty Setup
So that the duty ledger reflects the correct obligation even for transactions that were posted before the setup was added

Setup:

1. Ensure the Item Duty Setup line exists for the item and duty code.
2. Open Item Duty Setup and select the relevant line.
3. Choose Create Duty Entries (Replay Posting) from the actions.
4. Confirm the dialog — the system will reprocess all posted item ledger entries for this item/duty combination and create the corresponding duty entries.
5. Review the result message showing how many item ledger entries were processed.

Note: The system will block this action if duty entries with a non-zero duty amount already exist for the combination, unless all existing entries are unsettled and have zero value (in which case they are deleted and recreated). This prevents overwriting a live duty ledger. Do not run this on combinations that are already in active use unless you are certain no existing entries should be preserved.

As a Accountant
I want to understand how the duty ledger is updated when a posted transaction is reversed using the standard BC correction mechanism
So that I know the duty entries remain accurate after a correction

Setup:

1. When a posted item transaction is reversed in BC (e.g. using Undo Receipt or a correction item journal), the system automatically creates mirror correction entries in Duty Entries.
2. The corrected base entry is closed (Open = false, Settled = true, Correction = true).
3. A new correction entry with the opposite quantity is inserted, also marked as Correction.
4. The net effect on the duty ledger is zero for the corrected transaction.

Note: The system will block the correction if the duty entry to be corrected is already linked to an item charge line in a purchase invoice or credit memo (i.e., it has already been included in a settlement or reimbursement document). You must delete the purchase invoice/credit memo line first before the correction can proceed.

As a Accountant
I want to understand why I cannot unapply item ledger entries for duty-subject items
So that I know how to handle situations where I need to change the application

Setup:

No setup action is possible — re-application is permanently blocked for item entries carrying duty entries. This is by design: the duty entry chain is tightly linked to the item application chain, and unapplying would break the traceability of duty obligations.

If you need to correct a transaction, use the standard BC item correction/reversal mechanism, which creates proper correction duty entries rather than modifying existing ones.

As a Accountant
I want to view all duty entries for a specific item and duty code
So that I can reconcile the duty ledger and understand the open obligations

Setup:

1. Open Item Duty Setup and find the line for the item and duty code.
2. Choose Duty Entries from the actions. The page opens pre-filtered to that item and duty code.
3. Review the entries. Key columns to focus on: Entry Type, Quantity, Remaining Quantity, Duty Amount, Open, Settled, Applies-to Entry.
4. Open entries (Open = true) with Entry Type = Imposition represent outstanding payable duty. These will be included in the next settlement run.

As a Accountant
I want to trace how duty entries are linked across the supply chain
So that I can follow the full journey of a duty obligation from receipt to settlement

Setup:

1. Open Duty Entries and find an outbound entry (negative quantity).
2. Note the Applies-to Entry value — this points to the inbound entry whose duty obligation this outbound entry is applying against.
3. Look up the referenced entry number to find the original Imposition or Suspension entry.
4. For Carryforward entries, the chain may go deeper: the system walks the chain until it finds the entry whose item ledger entry matches its parent item ledger entry (the original inbound).