HS Codes are used by customs and logistics providers for a variety of purposes, from calculating duties and tariffs to ensuring that an importer is not importing banned or hazardous products.
What Are HS Codes?
HS Codes (or HTS Codes), also known as the Harmonized Commodity Description and Coding System, or simply the Harmonized System, are a standardized international system to classify globally traded products. The system was first implemented in 1988 and is currently maintained by the World Customs Organization. The HS Convention, signed in 1983, has over 205 member countries. As signatories, each country agrees to classify its tariff and duty structure according to the HS Code categories.
The Harmonized System is used to ease global trade by creating unified categories to classify different types of goods.
The Harmonized System categorizes about 5,000 commodity groups in simple six-digit codes, broken down into 21 Harmonized System sections, 96 Harmonized System chapters, and thousands of headings.
How Are HS Codes Structured?
Global & US HS Codes have four components. Referring to the diagram’s green numbering:
There are 21 distinct sections that split into 96 chapters. Exception chapters include chapter 77, which is reserved for future use, chapters 98 and 99, which are limited to national use, and Chapter 99, which is a specific code limited to temporary modifications. In the above example, the chapter selected is 09, for “Coffee, tea, maté and spices”.
The heading dictates the specific category within any particular chapter. In the example above, the 01 refers to coffee.
The last two digits of the international Harmonized Code are more specific, defining subcategories of products. For example, caffeinated coffee beans are 0901.21, but decaf is 0901.22. Incidentally, instant coffee would fall under a totally different heading – 21 – for miscellaneous edible preparations.
4. Extra digits:
Countries can use an additional 2-4 digits for country-specific categorizations. For example, the United States relies on ten digits codes called Schedule B numbers. The 0050 in the above example is used for non-organic coffee. Since these digits are unique, non-organic caffeinated coffee in another country would begin with the same 6 digits but the last four digits would likely be different.
How Do I Use HS Codes?
HS Codes are used by customs and logistics providers for a variety of purposes, from calculating duties and tariffs to ensuring that an importer is not importing banned or hazardous products. The true value of HS Codes is how globally recognized they are. Whether you’re importing purebred horses to the United States or Sri Lanka, the first six digits of that HS Code will be 0101.21.
Import Tax Rate Search of Some Countries by HS Codes.
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