In international trade, there are many kinds of goods. How to accurately and efficiently classify and identify goods is a challenge faced by customs, enterprises and related institutions. This article will introduce HS code in detail to help classify goods in international trade.
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Introduction to HS Code
In international trade, the classification and identification of goods are crucial, and HS code (Harmonized System Code) is a unified classification system for global trade. HS code is formulated by the World Customs Organization (WCO) and widely used around the world to facilitate customs in various countries to identify, manage and tax import and export goods.
Features of HS Code:
- Globally applicable: Applicable to more than 200 countries and regions around the world, covering more than 98% of international trade goods.
- Standardization: All countries maintain the same first 6 digits, but countries can expand on subsequent digits.
- Dynamic adjustment: Updated every 5-6 years to adapt to emerging industries and technological changes.
Structure and Classification of HS Code
HS code is a classification system consisting of 6 digits, but many countries will add additional digits to the basic 6-digit HS code to meet their own trade management needs.
The structure of HS code is as follows:
- The first two digits: indicate the section, that is, the major category of goods.
- The first four digits: indicate the heading of the goods, which further subdivides the category of goods.
- The first six digits: indicate the subheading, which describes the attributes of the goods in more detail.
Country extension (8-10 digits): Different countries may add more digits to further subdivide the commodity classification.
The Role and Importance of HS codes
Global unified commodity classification: HS codes are used in more than 200 countries and regions to ensure the consistency of commodity classification.
- Avoid fines and seizures: Accurate HTS codes ensure that goods comply with the laws and regulations of the importing country, preventing fines, goods seizures and even confiscations due to misclassification or non-compliance.
- Determine tariff rates: This is the core function of HTS codes. Each HTS code corresponds to one or more specific tariff rates. Wrong or inaccurate HTS codes may lead to:
- Overpayment of tariffs: Using a code with a higher tariff rate.
- Underpayment of tariffs/penalties: Using a code with a lower tariff rate may result in additional taxes and penalties if discovered by customs.
- Delayed customs clearance: Customs may require reclassification and adjustment of taxes, which may delay the release of goods.
- Impact on regulatory requirements: HTS codes determine not only tariff rates, but also whether goods require specific import licenses, quotas, quality standard certification, health and quarantine certificates, etc.
- Trade statistics: Customs authorities in various countries use HTS codes to collect detailed import and export data for trade policy formulation, market analysis and economic forecasting.
- Trade Agreement Benefits: Many free trade agreements (FTAs) or preferential trade arrangements provide preferential tariff rates that must be applied for and enjoyed under specific Harmonized System (HTS) codes.
How to Find HS Codes
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 find HS codes:
Identify the accurate description of the goods
Thoroughly understand the nature, composition, materials, functions, intended use, and manufacturing process of the goods. For complex goods, additional documents such as technical specifications, drawings, or chemical composition analysis reports may be required.
- China Customs Code Query: China Customs Import and Export Commodity Code Query System
- US HTS Query: US International Trade Commission HTS Online
- EU TARIC Query: EU TARIC Database
Start with a 6-digit HS code
First, determine the international HS 6-digit code of the product. This is usually easier to identify.
In the destination country’s HTS query system, enter the first six digits of the HS code, and then gradually narrow the search until you find the 8-digit or 10-digit HTS code that best suits your product.
Use online search tools
There are many HS code search tools on the Internet. You can enter the product name, keyword, or HS code to query. These tools usually provide multiple search methods to help users quickly find the required HS code. For example, Global Trade Atlas, Panju.com, etc.
Please note the General Rules of Interpretation (GRI)
The HS coding system contains a set of internationally recognized general classification rules that guide the classification of mixtures, compounds, combinations of goods and other similar items. Understanding these rules is essential for accurately classifying complex goods and services.
Seek professional help
- Freight forwarders: Experienced freight forwarders or professional customs brokers have dedicated classification teams that are familiar with the Harmonized System (HTS) codes and customs regulations of various countries and are able to provide professional classification services.
- Customs consultation: In some cases, if the goods are very special or complex, you can seek official consultation or apply for a binding ruling from the customs authorities of the destination country to obtain a legally binding classification decision.
Update and review regularly
The HTS coding system is updated regularly, usually revised once a year. Please ensure that the HTS code you use is up to date. When the goods change (for example, the ingredients, functions, uses or packaging changes), their HTS codes must be re-evaluated.
HS Code and Tariff Calculation
HS code is an important basis for tariff calculation. Tariff = Duty-paid price × tax rate (corresponding to the tax rate of HS code) Customs of various countries determine the tariff rate of imported goods based on HS code. Tariff rates usually include most-favored-nation rate, ordinary rate, agreed rate, etc.
Some countries will impose anti-dumping duties, value-added tax or consumption tax on specific goods
Common Questions about HS Code
Is HS code globally unified?
The first 6 digits of HS code are universal, but different countries may add their own extended codes on this basis.
Is it possible for a product to have multiple HS codes?
In some cases, a product may meet multiple classification standards, so it is necessary to combine the use of the product, main ingredients and other information to determine the most appropriate HS code.
What are the consequences of using HS code incorrectly?
It may lead to customs clearance delays, fines, returns, and even legal liability.
As an importer or exporter of HS code, who is responsible?
The consignee of imported goods or the consignor of exported goods must provide the customs code for customs clearance to ensure that the code matches the actual goods, thereby completing the customs clearance process smoothly.
HS codes are a vital tool in global trade, affecting commodity classification, tariff calculation and compliance. Accurately classify HS codes through this article to reduce trade risks, improve customs clearance efficiency and optimize costs.