07 Feb HS CODE, TARIFF NUMBER, HARMONIZED SYSTEM
Harmonized System (HS Code) is the main parts of Tariff codes, also known as “The Harmonized Commodity Identification and Coding System” or The Harmonized System”, is an international standardized system for classifying products traded globally. “HS Code” is a multipurpose international product nomenclature developed by the World Customs Organization (WCO).
The Customs Cooperation Council initially adopted the system in 1983. The “World Customs Organization maintains the regulation and use of the system”. WCO Member countries (including EU, USA, China) accept the HS tariff codes and the stipulated product classification. It means that all customs points integrated with HS Code worldwide. The common abbreviation HS covers more than 5000 product groups.
How to determine the HS Code, Tariff Number:
The “Harmonized System Committee” affiliated to the World Customs Organization is responsible for defining the goods subject to customs procedures and reviewing the changes.
It is essential to follow the current HS Code versions due to the technological developments and the increase in niche usage areas in recent years and the formation of new products and new sub-categories of existing products.
The Committee meets twice a year. Representatives of WCO member countries may accompany the meetings. HS codes usually reviewed and updated every five years. The latest updates took place in 2017. So the next update will be in 2022.
HS Code Expansion
Customs tariff statistics position or Tariff codes consist of 12 digits. However, many countries use the top 10 digits. The first 6 households are the same all over the world. For example, the products listed below evolve to the same product in all countries’ customs, including the USA, England, India, China, Argentina, Republic of South Africa.
- 9603.21: Toothbrushes: (in Chapter 96)
- 8517.12: Mobile phones: (in chapter 85)
- 3305.10: Shampoos: (in Chapter 33)
These 3 products are actually divided into different subcategories. The seventh and eighth digits are determined by country. For example, the seventh and eighth digits of the same product may be different in the European Union, USA, India and China. The nineth and tenth digits are used to classify products into further subcategories, for example, to subject them to different tariffs, to tax them differently.
The difference between an HS code and HTS code is the number of digits within the code. A code with six digits is a universal standard (HS Code) and a code with 7-10 digits (HTS Code) is often unique after the 6th digit and determined by individual countries of import.
HS codes are composed of 6 digits and broken down into Chapters (first 2 digits), Headings (first 4 digits) and Subheadings (full 6 digits). HTS Codes are further subdivided into 10 – 12 digit items depending on the country commodity codes and national tariff lines. The US use the 10 digit numbers and EU use 8 digit numbers mostly.
European Union – HSCode, Tariff number
TARIC – Integrated Customs Tariff by the EU
TARIC is based on Unified Nomenclature. Therefore, the first 8 digits are the same as CN. TARIC is a standardized tariff of the European Union and includes 2 more digits, that is, TARIC now consists of ten digits, these codes reveal such information regarding anti-dumping, customs duty suspension or tariff quotas.
You can check the products and HTS codes to be traded in EU customs from the link below:
USA – HSCode, Tariff number
10 digit HTS codes are used in US customs. The tariff codes of the products to be sold to the USA can be checked from the link below. Under the search section, There is also apdf file, which has HTS subheadings in chapters 01 through 97 that are covered by the additional tariffs on products of China. It helps to find Chinese products and its HTS codes.
Why are HTS Codes important?
The names of products and services vary from country to country. Moreover, although they are very similar to each other, some products are used for completely different purposes. The evaluation of a product in a different category of goods at different customs will cause confusion in the documentation process and tax determination of the product.
If you do not add an HS code to the commercial invoice and other shipping documents, there is a risk that the recipient will pay incorrect tax, and it is likely that the customs point will be requested to determine what the products are, inspections and tests will be made according to the product type, and delivery to the recipient company will be delayed. Especially in maritime and air transportation, it is systematically obligatory to write HS Code on the bill of lading.
If the HS code is included in the export-import documents, the buyer and seller companies will have the following information:
- What is the customs tax rate on the product?
- What is the rate of local taxes payable by-product?
- Is there a tax exemption for products?
- Is there an extra tax item on the products?
- Is there a special permit or certificate requested for the product during the export and import phase?
- Does the import of the products carry conditions such as pre-examination and quarantine?
- Is there a quota, special permit or import ban for the product group?
HS code allows you to get answers to all these questions. Therefore, exporters are recommended to specify HS Code next to the product name on proforma invoices and bidding files in order to guide the buyers correctly.
For the importer, it is vital to know the HS Code. Using the correct HS code can be quite tricky in specific instances, as an interpretation of the codes may vary between countries and customs authorities. You have found a low price and quality product that you can sell profitably in your own market. Still, it is a product that is forbidden to import, assume that you bring 1 container of goods without knowing this, or the customs tax is very high, so the cost is twice what you calculated at the beginning, you lose.
Using the correct HS code and the right interpretation is very important for importer, as usage of incorrect code may be considered by customs as non-compliance, misleading or misdeclaration – each of which comes with its associated penalties.
If you are not sure which HS codes to use, it is important to consult customs directly or ask experts in customs clearance companies for advice.