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What is Demurrage Charges

B.Nagesh (MBA- CS Execuitve) (151 Points)

04 December 2008

What is the meaning of Demurrage Charges? what is basis applicable for this.

can any one explain about this.

Thanks

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13 Replies

CA Trinath Galla (student) (3130 Points)
Replied 04 December 2008

When we import goods trough shipping aftre the goods reach the destiny, if we didn take take immediate delivery of goods, the shipping authorities will store the goods in their warehouses till we take the delivery.

So for storing the goods , the charges collected by shipping authorities is called DEMURRAGE CHARGES

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sanjiv (CA student) (19 Points)
Replied 04 December 2008

Originally posted by :Trinath

HI THERE IS DIFFERENCE BETWEEN DEMURRAGE & DETENTION CHARGES,WHAT YOU ARE TELLING HERE IS RELATED WITH DETENTION CHARGES.

DEMURRAGE CHARGES IS RELATED WITH DAMAGE OF GOODS OR DAMAGE OF CONTAINER .IF THERE IS DAMAGE OF GOODS PARTY MAY CLAIM CHARGES OR IN CASE OF DAMAGE OF CONTAINER SHIPPING LINE WILL LEVY THIS CHARGES.

vardan sharma (Company secretary) (160 Points)
Replied 04 December 2008

Trinath is correct

charges are applicable as per the carrying compnay

it is higher in airlines than that of shipping lines

48 hrs are free in delhi after that demurage is charged untill DO is taken

Originally posted by :B.Nagesh
"	What is the meaning of Demurrage Charges? what is basis applicable for this. can any one explain about this. Thanks	"

manoj (Articled Student) (66 Points)
Replied 04 December 2008

Demurrage charges are those which are charged by the customs ware house stations when the goods are stored and not cleared within the specified time i.e., these are the charges for excess period of storage of goods

ravi (COMMERCIAL) (413 Points)
Replied 06 December 2008

these r applicable for not only import but also for export.

regards

k.ravi

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(Guest)

I want to know the process of import of liquor

(Guest)

Thanks

juzar (diversified) (181 Points)
Replied 25 November 2009

do me add demurrage to COST OF GOOD SOLD or it is shown as different item in p &l account

(Guest)

Definition 1

Penalty for exceeding free time (usually 72 hours) allowed for taking delivery of a shipment from the shipping or transporting company's warehouse.

Definition 2

Penalty assessed against a consignor, consignee, or other such party responsible for delay in loading or unloading of a shipping vessel or for undue detention (usually over 48 hours) of the transportation equipment. Also called detention charge.

juzar (diversified) (181 Points)
Replied 25 November 2009

Respected All,

I want to know treatment of demurrage, can we add in inventory and take is as COGS for we have to show in Profit and loss account

regards

juzar para

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(Guest)

Demurrage is not a regular charges its a type of penalty. You can charge the whole amount from your customer if the customer is defaulter. It should be shown seperately in P & L account and not to be added in cost of good.

ojusv (B.Com) (22 Points)
Replied 22 April 2015

Can anyone please help me with the treatment of demurrage charges in valuation of assessable value in customs Are they treated as inclusions Or exclusions Please reply me fast here and @ sharangsharma098 @ gmail.com Please....