What is HS Code? HS Code Comprehensive Guide?

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As the volume of international trade increases, the Harmonized System Code (HS Code) has become increasingly important as the “identity card” of goods in global trade. However, the HS Code can be perceived as an elusive digital code by those new to importing and exporting. The purpose of this discourse is to demystify the HS Code.

What is HS Code

HS Code Definitio

The Harmonized System (HS) code, a standardized numerical classification system developed by the World Customs Organization (WCO) in 1988, facilitates international trade by providing a universal, six-digit numerical code for classifying goods. These codes, structured hierarchically, consist of the first two digits representing the product category, the next two indicating headings, and the final two defining subheadings. In some countries, this system is expanded to include national tariff lines, which add two to twelve digits. The HS code system is subject to regular updates every five years, ensuring its continued relevance and accuracy. The HS codes are widely recognized and accepted, facilitating efficient and streamlined trade processes.

The role of HS code

  • Commodity classification: standardizes the numerical classification of traded goods to identify products being imported or exported accurately.
  • Tariff calculation: helps customs determine the applicable tariffs and import tax rates for specific goods, ensuring fair and transparent trade practices.
  • Trade statistics: used to collect data on international trade, providing valuable insights into the types and quantities of goods traded between countries.

How to find the HS code

In international trade, knowing the HS code of goods is crucial for exporters, importers and related logistics and customs service providers. Here are some common ways to look up an HS code:

1. Consult the commodity catalogue: Customs authorities in different countries usually publish commodity catalogues or tariff books that include HS codes. You can look up a good’s HS code by consulting these catalogues.

2. Use an online search tool: Many online HS code search tools exist. You can enter the product’s name, keyword, or HS code to search for relevant information. These tools usually provide multiple search methods to help users quickly find their desired HS code.

3. Consult a trade organisation: If you are unsure about a product’s HS code, consult a professional trade consultancy or customs agency. These organisations usually have extensive experience and expertise and can provide accurate HS code information.

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How is the HS structured?

HS codes consist of six digits, with each pair of digits having a different meaning. The first two digits represent the chapter, which describes the type of goods; the third and fourth digits represent the heading, further subdividing the kind of goods; and the last two digits represent the subheading, providing a more specific description of the goods.

For example, in the code “84713010”, “84” represents machinery and equipment, “71” represents automatic data processing machines for office use, “30” represents other automatic data processing machines for office use and “10” represents equipment of this type which is not listed by specific model or function.

How HS Codes Affect Tariff

The HS code is an important basis for customs in determining the tariff rate of goods. Different goods are classified under different HS codes according to their nature, purpose and other factors, and the corresponding tariff rates differ. Therefore, the correct choice of HS code is crucial to reducing import and export costs.

What should I do if the HS code is wrong?

Using the wrong HS code can cause several problems. First, it can cause customs to misjudge the nature of the goods, which can lead to errors in tariff calculation or inappropriate regulatory action. Second, it can cause import and export goods to be detained or returned, wasting time and money. Therefore, importers and exporters should be extremely careful when selecting HS codes.

Summary

In short, HS codes are an indispensable part of international trade. Understanding and mastering the HS codes is of great importance in promoting trade facilitation and improving the efficiency of customs clearance.

FAQ

Although the HS codes are internationally harmonised, the specific interpretation and application may differ from country to country. These differences are mainly because countries have classified and coded goods in more detail according to their national circumstances.

6-digit code: The internationally recognised HS code has six digits. The six-digit code is made up of three parts:

The 1st and 2nd digits represent the ‘chapter’.

The 3rd and 4th digits represent the ‘heading’.

The 5th and 6th digits represent the ‘subheading’.

8-digit code: In some countries or regions, the HS coding system allows each country to define, based on the 6-digit code, subdivisions based on its actual situation, forming an 8-digit code.

Customs HS codes usually consist of six digits. The first two digits represent the chapter, the middle two represent the item, and the last two represent the sub-item.

The consignee of imported goods or the consignor of exported goods must provide the customs code for customs clearance. This ensures that the code matches the actual goods and allows the customs clearance process to be completed successfully.

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