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National Product Classification for Manufacturing Sector (NPCMS) is a mode of classifying manufactured products with codes. Product classification works via a system of assigning codes to products depending upon the characteristics of the product itself. This type of classification is used across the world, though there are many different systems such as International (NICE) classification, Global Product Classification (GS1), North American Product Classification System etc.

In general, such classification systems are divided between the manufacturing and the service sectors. The main purpose of NPCMS is to organise and analyse data regarding industrial production, trade, price etc. It should be noted that the NPCMS system used in India is based on the Central Product Classification (CPC) system that is promulgated by the UN Statistical Commission.

  • What is CPC?
  • Establishment of NPCMS
  • Characteristics of NPCMS
  • Assigning of NPCMS Codes
  • Sections of NPCMS
  • 1. What is CPC

    The CPC serves as the basis for most if not all, international standards of product classification. The classification system can be said to be a complete system holding all products under the definition of SNA. Under the CPC, products are of the following three types:

    – Physical goods
    – Intangible goods
    – Services

    2. Establishment of NPCMS

    Before the implementation of NPCMS, it was decided that for the ASI (Annual Survey of Industries) 2010-2011 the CPC system was to be used. In the meanwhile, it was directed by the Standing Committee of Industrial Statistics (SCIS) that the Central Statistics Office-Industrial Statistics Wing (CSO-IW) should develop the NPCMS system based upon the CPC system.

    The SCIS suggested that the NPCMS system be developed by adding one or two digits to the CPC systems code. The CSO-IW developed the NPCMS based on sections 0-4 of the CPC.

    3. Characteristics of NPCMS

    Due to the NPCMS being based on the CPC, they share quite a few points of similarity. Regardless since the system was designed to be for use in India, there are many distinctions as well. The characteristics of the NPCMS 2011 are as follows:

    • 7-digit code
      – 5-digit CPC code
      – +2-digits Indian requirement
    • 5 sections
    • 40 divisions
    • 190 groups
    • 785 classes
    • 1501 sub-classes with ultimate 7-digit products

    The NPCMS had not been revised from its 2011 version until the year 2015. This revision brought upon the following changes:
    – 337 new codes were introduced
    – 291 codes were deleted
    – The description of 300 items have been modified

    The NPCMS systems of product classification were implemented from the year 2011; the previous system that was used, the ASI Commodity Classification (ASICC) was discontinued.

    4. Assigning of NPCMS Codes

    In the application of the NPCMS codes has to be followed strictly to ensure that the data collated is as accurate as possible. To do this, there are five important points of consideration, and they are as follows:

    1. Items description of input/output block of schedule: The description of the items must be the generic description used by the factory and should include the local name or the brand name

    2. Item code:
    – For the assigning of the code, the appropriate code must be searched. In the case where the product is a difficult item to determine, such as chemicals etc. the help of the technical assistance of the factory may be taken.
    – Avoid the use of the code ending with “9” which is used for classifying “other items” where there is no specific code assigned to that type of product. They must only be used where the code has not been given at all for the product.
    – It is to be ensured that the same code is being used for both the input and output items.

    3. Units of quantity: The units of quantity that are used must strictly adhere to the system established under NPCMS. If the factory records show the use of a different unit of quantity, use the appropriate conversion method.

    3. Figures: The units of quantity that are used must strictly adhere to the system established under NPCMS. If the factory records show the use of a different unit of quantity, use the appropriate conversion method. The coding of items is based on the section, division, group, class and the sub-class of the item.

    Section

    Division

    Group

    Class

    Sub-class

    Product code

    Description 

    0

             

    Agriculture, forestry and fishery industry

     

    01

           

    Products of agriculture, horticulture and market gardening

       

    011

         

    cereals

         

    0111

       

    wheat

           

    01111

    0111100

    Wheat, seeds

           

    01112

    0111200

    Wheat, other

    5. Sections of NPCMS

    The NPCMS is divided into five sections from 0-4. Each section contains various industries that the NPCMS is to be applied upon. Each section divides the industries based on the similarity of the types of items produced by these industries.

    • Section 0: Agriculture, Forestry and Fishery Products
    • Section 1: Ores and Minerals; Electricity, Gas and Water
    • Section 2: Beverages, Food Products, and Tobacco; Apparel, Textiles, and Leather Products
    • Section 3: Other Transportable Commodities, Excluding Metal Products, Machinery and Equipment
    • Section 4: Metal Products, Machinery and Equipment

    Disclaimer: The materials provided herein are solely for information purposes. No attorney-client relationship is created when you access or use the site or the materials. The information presented on this site does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice from an attorney licensed in your state.

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