Last updated 30/06/2022
Some products may have different customs duty rates associated with them. To have a customs duty amount, entered against a Purchase Order, correctly allocated to the landed cost of the products in that Purchase Order, create a customs duty rate in Cin7 and then apply it to a product.
To create a customs duty rate:
Only one customs duty rate can be assigned to a product. Assigning a customs duty rate ensures that an accurate portion of the customs duty amount will be added to the product's landed costs when it is received in a Purchase Order, which also has a customs duty amount entered against it.
To apply a customs duty rate to a product:
The new customs duty rate will now be used when this product is received in any Purchase Order which also has a customs duty amount entered against it.
A purchase order has two product line items on it with the following details:
- $100 value for Product A with a 5% customs duty rate applied against it.
- $200 value for Product B with a 10% customs duty rate applied against it.
The total customs duty paid is ($100 x 5%) + ($200 x 10%) = $25
Therefore, when $25 is entered as the total customs duty amount against this Purchase Order, Cin7 will split it and add it to the landed cost of each product as follows:
- $25 x (($100 x 5%) / (($100 x 5%) + ($200 x 10%))) = $5 for Product A
- $25 x (($200 x 10%) / (($100 x 5%) + ($200 x 10%))) = $20 for Product B
The customs duty amount is entered against a Purchase Order either:
- From another Purchase Order using the linked transaction functionality. Refer to this article.
- Entered in the Landed Costs section of the same Purchase Order. Refer to this article.
Note: Only one method of applying the custom duty amount must be used in a single Purchase Order, either via the linked transaction functionality or via entering it in the Landed Costs section of a Purchase Order. Using both against a single Purchase Order will corrupt the landed cost calculations of that Purchase Order.
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