Authored by: Trupti Gaikwad & Vijendra Kargudri

Risk calculation and Preference Determination

Preference Processing in SAP GTS facilitates risk calculation and supports exporters to meet legal requirements for customs preferences and identify their goods’ eligibility as preferred goods. If eligible for preferential treatment, an exporter’s global customers can import the finished products, duty-free or at a reduced rate of import duty. This provides an exporter a competitive edge over its competitors.

With globalization, the manufacturing process has manifested into a multi-location process due to location-specific cost advantages/benefits associated with the components involved in assembling the final product. As such more businesses have multi-location vendors/customers globally and hence based on product component’s – Country Of Origin (COO), Long Term Vendor Declaration (LTVD) is required for risk calculation and preference determination.

Typically, an exporter using standard SAP GTS – “Maintain LTVD” web application manually gathers the COO information from each of its vendors, wherein the manufacturer sends links to its vendors to provide LTVD for each associated product (component) procured from them to assemble the final product. Once the LTVD Maintenance Process is completed by all the vendors, product certificates are issued to the vendors for authentication, which in turn helps transfer the preferential cost/duty benefits to the customers buying the finished product from the exporter.

Under the standard SAP GTS, the risk calculation and preference determination process are laborious and time-consuming.

How can Krypt help?

KRYPT as an SAP preferred partner has assisted global businesses successfully implement SAP GTS, TM, IBP & EWM.

Recently, we helped a global manufacturer expedite risk calculation and preference determination process using Maintain LTVD Web application customized specifically for partial submission and partial completion of LTVD (as a technical enhancement to the standard process). To know more about this successful implementation READ the Case Study on how Krypt helped its customer overhaul the laborious & time-consuming legacy process.

If you wish to know more about our products/services, please request a DEMO or do contact us.

Follow us on:

Image Credit: Pixabay