“When you are dealing with any buyer from the world for the export of a particular product, you are communicating for a given HS code identification, this eliminates guesswork and helps the business owners to gain confidence and clarity. An H.S Code Export Import identification is a valuable process for a successful trade.”
What is the HS Code for?
As in any other regulated and highly complex system, international trade needs certainty of rules and standards. International sellers and buyers must understand each other to trade successfully. They need to communicate using mutually accepted terms, even if their languages are different.
If you tell your importers your product is “cut flowers”, they need to understand of which kind and variety. That’s when and why HS codes are used.
Not only. Another main reason is you must enter the correct one to apply the right import tariff rate. Any mistake will cause delays, or worse, loss of the goods shipped.
In addition, the purpose of the HS Code is to improve the efficiency and effectiveness of each country’s customs authorities. This system enables each country to apply tariffs, monitor trade and carry out economic and statistical analysis at various levels and for different purposes.
Why is the HS Code important?
The Harmonized Commodity Description and Coding System, or HS Code, was developed by the World Customs Organization (WCO) which defines it as a “multipurpose international product nomenclature”.
The HS Code system is important because is universally recognised by more than 200 countries. Complying to it allows the collection of trade statistics, rules of origin, monitoring of goods under control among other important data.
So, depending on who you talk to you will hear the HS Codes named as Customs Codes, Harmonized System Codes, Harmonized Tariff Schedule (HTS), Tariff Codes or simply Export/Import Codes. In reality, they all refer to HS codes because there’s no other system in place.
How to find a HS Code?
As a universal standard system that describes and classifies goods traded internationally. It is composed of 98 Chapters and 21 sections. Each section may contain more chapters.
Each chapter identifies the first 2 digits of the HS code, while the next 4 digits identify the heading (2 digits) and the subheading (2 digits). Finally, as mentioned above, you may find that each individual country’s system adds additional digits.
When Importers and exporters want to import or export their goods, they need to know the exact customs tariff classification for these goods.
This is important because you must mention Harmonized codes on documents too, such as Bill of Lading, shipping documents, etc. If you don’t know the correct code of your product, you can use one of the several online tools we report here below by providing a brief description of the product.
In this article I have explained about Harmonized System Code, (Harmonized Tariff Code), how does HS code function, how many digits are there in HS code and how does HS codes function in different countries. I hope you I could clarify in brief about HS code and you have satisfied to know about HS codes (HTS codes) in brief.
For further info,visit us at B2B Export Import Academy.
