Access HS Codes Configuration

Navigate to Inventory ➔ Configuration ➔ HS Codes to access the setup screen where you can define and manage your Harmonized System (HS) codes catalog and regional tariff rates.

Manage HS Codes List View

In this list view, you can see all configured Harmonized System (HS) Codes catalogued with their descriptions and company assignments. The multi-company compatibility ensures that each business unit has access to its own unique set of HS Code definitions and tariff rules.

Configure HS Code Tariff Rates

• Configure Origin-Specific Rates: Define detailed percentage-based rates (such as CID, VAT, PAL, Cess, Excise, SRL, and SSCL) or flat amount rates (COM and EXM) for individual countries or country groups under the Tariff Rates tab.
• Assign Products: Easily link multiple products under the same Harmonized System (HS) classification for unified tax calculations.
• Import Tariff Rates: Access the Import Tariff Rates header action button to upload regional rates in bulk directly via a custom CSV template.

Assign HS Codes to Products and Categories

• Category-Level Defaulting: Assign a default Harmonized Code to a Product Category under the Import Compliance section to automatically cascade it to all products in that category, saving configuration time.
• Product-Level Customization: Manually configure or override the Harmonized Code on individual product templates for items requiring specific tariff classifications.
• Landed Cost Compatibility: Ensure the product's category is configured with FIFO or Average costing method and Perpetual (automatic) inventory valuation to support landed cost calculations.

Create and Confirm Purchase Order

• Procurement Integration: Create a new Purchase Order for a vendor located in an import partner country. The matching HS Codes will automatically populate directly on the purchase lines for clear compliance tracking.
• Validate Stock Receipt: Confirm the Purchase Order to generate the incoming shipment. Process and validate the transfer so it enters the Done state, preparing the items for landed cost allocation.

Link Transfer and Prepare Landed Cost

• Link Transfers: Create a new Landed Cost record and select the incoming stock transfer. The system automatically populates the Received Products table with origin country, HS Codes, quantities, and transaction values.
• Configure Capitalization Option: Toggle the Capitalize VAT into Inventory checkbox to specify whether customs VAT should be added directly to the inventory valuation.
• Verify Base Cost Details: Confirm that the currency rates, unit prices, and subtotals match your vendor bill before running the customs calculations.

Calculate and Allocate Landed Costs

• Calculate Duties: Click the Calculate Customs Duties button on the form to automatically fetch origin-specific rates and compute all 10+ tax components (such as CID, PAL, VAT, Cess, SRL, etc.) under the Customs Duties tab.
• Allocate via Custom Split: Navigate to the Additional Costs tab to verify the created line with the By HS Code split method. Click Compute to distribute the exact calculated duties back to the inventory valuation lines.
• Understand Formula Dependencies: Customs components are calculated sequentially, with dependent taxes building upon the CIF value and prior calculations:
  • CIF (Cost, Insurance & Freight): Declared Value + Allocated Line Freight
  • CID (Customs Import Duty): CIF × CID Rate
  • Surcharge: CID × Surcharge Rate
  • PAL (Ports & Airports Levy): CIF × PAL Rate
  • EIC (Export Development Board Cess): CIF × EIC Rate
  • Cess: CIF × Cess Rate
  • Excise: CIF × Excise Rate
  • VAT (Customs VAT): (CIF + CID + PAL + EIC + Cess + Excise) × VAT Rate
  • SRL (Social Responsibility Levy): (CID + Surcharge + Excise) × SRL Rate
  • RIDL: (CIF + CID + Surcharge + PAL + Cess + Excise + VAT + SRL) × RIDL Rate
  • SSCL (Social Security Contribution Levy): (CIF + CID + PAL + Cess + Excise) × SSCL Rate
  • Total Duty: CID + Surcharge + PAL + EIC + Cess + Excise + SRL + RIDL + SSCL + COM + EXM
  • Landed Cost: Total Duty (+ VAT, if Capitalize VAT is enabled)

Verify Valuation Adjustments & Validate

• Inspect Cost Allocation: Navigate to the Valuation Adjustments tab. You will see the total calculated customs duties mapped as additional landed cost lines, split proportionally per product according to the configured HS Codes.
• Confirm Stock Valuation: Verify that the Original Value and the New Value of the inventory updates correctly. Click Validate to lock the landed cost and post the journal entries to your accounting ledger.

Review Generated Journal Entries

• Audit Accounting Postings: Click on the generated **Journal Entry** smart link from the validated Landed Cost form. Verify that the stock valuation accounts are debited and the expense/interim accounts are credited with the exact calculated customs duty totals per product line.
• Examine Ledger Integrity: The system ensures accounting precision by aligning the ledger balances with the actual physical and financial customs duties calculated under the Landed Cost sheet.

Print and Review Customs Valuation Sheet

• Access Report Print Option: Open the validated Landed Cost record, click the gear/settings icon next to the record title, and select the Customs Valuation Sheet printing option.
• Analyze Customs Valuation PDF: A detailed PDF document is generated showcasing a granular, line-by-line breakdown of CIF, CID, PAL, Cess, Excise, SRL, RIDL, SSCL, COM, EXM, VAT, and final duties per product.