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Customs Duty Rates

Last updated 30/06/2022

How to create customs duty rates and apply them to Products.

Overview


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.

Creating Customs Duty Rates


To create a customs duty rate:

  1. While logged in as an Administrator, select your username in the top right and then select Settings
  2. Open the Accounting menu, click Customs Duty Codes.
  3. Click Add New.
  4. Select "On" for the Active dropdown list. If set to "Off" this customs duty rate cannot be used.
  5. Enter a number for Sort. This is used to order all the customs duty rates in the list.
  6. Name the customs duty rate; e.g. "5% Duty" or "No Duty".
  7. Enter a unique code to identify the customs duty rate; e.g. "5-duty" or "10%-Duty".
  8. Select "Import" as the Type (optional).
  9. Type the percentage duty rate as a whole number; e.g. 5 or 10.
  10. Click Insert to complete the creation process.
  11. Repeat the process above to create as many customs duty rates as required.

 

Applying a Custom Duty Rate to a Product


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:

  1. Navigate to the Products page.
  2. Click on the Product name you want to allocate a Customs Duty Rate to.
  3. Locate the Accounting section of the page.
  4. In the 'Import Customs Duty Code' drop-down, select the Customs Duty Rate.
  5. Click Save.

 

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.

Example:

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.

 

The Accounting section should appear by default in your product module. If not, this can be configured by navigating to the General Settings. Click Products, then Product Settings, and ensure 'Accounting' is set to 'Yes'.