Commodity Codes
- Alan Gilchrist
- Andrew Stacey
- Joe Wagner
As an operator of a customs or excise warehouse you are expected to know what the terms below mean, what they are for and how they are used. Further explanation can be found on the HMRC website. The support team have a general knowledge of how this is setup but are not experts in customs operations and should not be requested to setup these codes on your behalf.
Commodity codes are world wide codes setup by the (World Trade Organisation) WTO to identify products worldwide and are widely used to determine tax rates for products imported into a country.
Commodity Codes are used in the system to categorise products as per the government trade tariff (in the UK: Trade Tariff: look up commodity codes, duty and VAT rates), various attributes are configured here relating to customs duty and importing / exporting.
When setting up Products in Product Maintenance, in the Customs tab users will configure a commodity code which will be used as the default in the Pre Advice screen for receiving new stocks for the product.
Mandatory fields are shown in RED
The information contained above all comes from the HMRC Tariff pages which are on the HMRC website UK Trade Tariff: volume 3 for CDS - GOV.UK (www.gov.uk) and details of the current rates are contained within UK Integrated Online Tariff: Look up commodity codes, duty and VAT rates - GOV.UK (trade-tariff.service.gov.uk)
The trade tariff is updated monthly therefore you need to monitor and apply those changes yourself each month if they apply to your warehouse
Special Codes
This relates to commodity code 1000000000 which is used where the goods are not subject to excise or customs duty and this directly operates with excise tax code 999.
If you do not have this code then set it up and match it to excise code 999.
Field Explanations
General Fields
Those which are not contained inside any group boxes on the form.
Field | Notes / Explanation |
|---|---|
Description | This can hold the full customs description of the commodity. Press the binoculars button to the right side to retrieve this automatically from HMRC. |
Short Screen Description | Enter an abbreviated version of the longer description field, this takes precedence on most screens where this is displayed although the complete description is usually also displayed.
|
Category Code | |
Bulk Commodity | Used in manufacturing processes, when the warehouse is permitted to use the bulk commodity code for payment of customs duty for the bottled stocks. |
No of Products | Not currently in use. |
Duty Stamp Type | If this is applicable for the product then which type of duty stamp can be applied to the product, duty stamps options are usually based on key categories.
More details about using duty stamps can be found in the Admin menu item Duty Stamps. |
EU Country Indicator | Indicates whether or not this Commodity Code can be used for EC produced or manufactured goods. e.g. Where the country is marked as EU Country is set as the COO. |
Submit to CDS | Whether this code is submitted to customs authorities, this will stop you accidentally sending codes which should not be submitted. |
Dangerous Goods | If your system has been set up to generate shipping notes, a Dangerous Goods document will be produced whenever a Product is associated with a Commodity Code has the Dangerous Goods field ticked. You may need new Commodity Codes for your Dangerous Goods. All the fields in red are mandatory to save the Commodity Code. |
Enter into Customs Warehouse
CODE | Description |
|---|---|
CT | Customs Transit Type. |
DT | Customs Declaration Type. |
IR | Trader who is authorised as an indirect representative and submitting the declaration on behalf of the importer. |
Leave Customs Warehouse (Home Use) / (Export)
These boxes come from (Box37) on the SAD and relate to the customs procedure codes used for products in this category when they are either used within the same country or when they are exported.
From: Customs procedure codes (Box 37)
CPC | Description |
|---|---|
71 | Customs warehousing procedure including deposit in other premises under customs control. |
07 | Free circulation with simultaneous entry of the goods under a warehouse procedure (including placing in other premises under fiscal control). This is the most typically used. |
40 | Home use with simultaneous entry for free circulation. |
To find out more about our CDS integration & roadmap see; CDS Implementation.
Quotas / Preferences
Quotas and preferences applicable to the commodity code can be found in the HMRC tariff and entered here. These are used to override the standard rate of customs duty by entering the ‘Quota No’ on the Pre Advice when receipting stock.
Critical - When advised in the tariff mark the preference as critical, this means that each submission will be authorised by customs before granting the preference, it usually means that the preferential rate is about to end or is reaching maximum use.
Units of Measure
When submitting to the customs authorities they will specify the units of measure that they wish to receive for the commodity code, generally this could be litres of liquid, litres of alcohol, weight.
Occasionally some commodities require up to three measures to be sent and you would select them from here ensuring that they are in the same order as per the tariff.
Excise Tax Link
Each commodity code has a tax code which it is applicable for, sometimes one commodity code can function with multiple tax (excise) codes, in this instance you will have to setup a duplicate commodity for the other tax (excise) codes
The duty category is the W1 report category for items on this commodity code
The taric additional codes comes from the published tariff and in general we find it is the tax code with an X prefix.
Important Warning
Validation (Strength or Size)
When switched on and setup these will ensure that items using the commodity code conform to the required strength or size set within these fields.
This is usually switched on to assist goods received processes.
Validation Definitions
Min is greater than or equal to
Max is equal to or less than
Customs Rates
This is where you set the duty rate for the commodity code and it will be in set in the currency provided in the top field.
CDR is a fictitious currency set by the customs authorities for the commodity rates, (when UK was in the EU this was set as ECU as all commodity rates were in Euros at a specific exchange rate, this has been retained)
ECU Indicator is a UK field to indicate the agriculture or industrial rate being used, whilst this is still mentioned it is no longer in use and all rates are now using one, which is indicated by the number 5.
Copyright Ontech Solutions 2017-2024. All rights reserved, no part may be replicated or distributed without the express permission of the owner.