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What is HS Code : Look up comodity codes, duty and VAT rates

What is HS Code : Look up comodity codes, duty and VAT rates

What are and why are Harmonized Tariff Codes important?

Before we take a look at why HS Codes/Harmonized Tariff codes are important, let’s be sure that we understand what they are.

The HS Code or Harmonized System is a 6 digit standard classification of goods which is often referred to as a sub-heading. It is used globally across international trade in order to accurately identify traded products. These HS numbers/codes are used by customs authorities in every part of the world in order to allocate the correct rate of duty and tax for each product.

Make sure your goods get customs clearance in Importing Country

Because these HS tariff codes are so vitally important, when you are completing any form of export or import paperwork that will be used internationally, you should always show correctly the 6 digit HS code and not the longer code. For example, these will always need to be on your commercial invoice for the goods; if you use the 10 digit code in error, the chances are that the code will not be accurate and all sorts of delays and problems may occur, costing you time and money.

Why do the Government customs authorities use these codes?

  • Enables them to abide by a uniform identification system for all imported or exported goods.
  • Tells the correct amount of duty and tax can be allocated and with regard to the bigger picture.
  • National laws can be enforced, and the codes used when analysing data for economic purposes or trade negotiations.

Why are HS Codes important ?

Whether you are an importer or exporter, you have to use these codes as the correct classification of goods is a legal responsibility. If you fail to use them correctly then shipments will get delayed, more inspections may take place and you may find yourself hit with heavy fines and penalties.

These HS Codes are also vitally important when it comes to calculating your bottom line as they can save you time and money. This is because when customs look at your past history of imports, they may find that you have paid too much duty and not taken full advantage of the benefits of the tariff. Allocating the specific tariff often requires a great deal of knowledge of the product but this should be easily done by the importer or exporter who has access to the full Tariff and understands the method of classification. Some goods may also qualify for lower duty rates but this will depend upon their purpose or the related Certificates of Origin.

By getting to know how the classifications work, you can double check that your revenue in terms of taxes and duties is correct and can often work alongside your customs broker or consultant to ensure that it is absolutely right each time. In cases where the broker does not understand fully what the product is, then the importer has to provide details. However, in reality, what happens is that brokers email across a page from the Classification Index and ask the importer to pick out the correct 6 digit HS Code. This works well because it puts the onus on the importer who has the legal obligation to show the correct code every time.

4PL Consultancy has a team of experts in Tariff classifications of wide variety of Product lines – Medical spares, Aerospace, Radiation Oncology machines & spares etc.