HS Code – What The Heck Is That?
When you are importing goods, you need to clear the customs. As we all know, when declaring to customs, it is most confusing to fill in the Declaration of Import and export goods, one of which is the harmonized system code (HS code).
You need to provide the correct HS Code for the goods. Often, you will wait for the exporter to choose the HS code for your product, and then use it on the commercial invoice, or shipping documents for air freight and sea freight. If they provide you with the wrong number, you are likely to bear the consequences of others ‘ mistakes. Incorrect HS code causes you to pay a higher tax rate. It will also affect the cooperation between exporters and importers.
You can learn more about HS by yourself and avoid suppliers providing the wrong HS Code. Properly classifying your products will help you avoid annoying customs delays and help extend your global business. Now let’s focus on HS code.
What Is HS Code?
HS encode is a digital encode, which is a unique digital code that is allocated to the various products and commodities shipped from one country to another. It is used to describe specific commodities in the import or export trading in about 200 countries. Exporters have to use these lists for market research, declarations of import and export, and tariff rates.
The Harmonized Commodity description and code system is an international classification system designed to facilitate the trade statistics and the imposition of tariffs. Before the harmonized system came into being, each country used its own systems to classify goods and services.
Without a common standard, it is difficult or impossible to classify goods correctly for customs duties, tariffs or statistic purposes. The separate classifications make international transactions complicated. To solve this problem, the World Customs Organization (WCO) has developed a unified system.
So far HS code consist of 22 sections and 98 chapters. These chapters are further subdivided into small headings, which refer to specific HS codes for different products. The code consists of 6 common numbers and 2, 4 or 6 digits, depending on the needs of each country.
The HS code list is a collection of such code, divided into 22 parts, including animal products, minerals, vegetable products, vehicles, airplanes, ammunition, etc.
Each business company must assign its number to its product, which appears with any other standard information for that product.
In general, the customs compiled a complete set of HS code that will not easily change, but there will be changes. For example, something that was not existed in the past is now emerging, and some things are not good in any other class. Besides, the official website will show which HS code has changed and what has changed.
Why your supplier offer the hs code for export Customs declaration that is different from your import Customs code.
1. Customs declarations in the exporting country are different from those of the importing country because of different national policies, regulations and requirements.
2. In the actual import and export declarations, we use the first 6 of the world’s Customs Code, the code after 6 common digits are defined by each country. You may get the HS code may even have 10-12 digits. So in practice, supplier often gave us a 8- digits or 10- digits HS code as a reference for our declaration.
The Function of HS code
What role does the HS code have? Perhaps in daily life, we do not care about the import and export of some goods. But for enterprises in international trade, it is necessary to understand the relevant matters. They needs to pay attention to the HS code . So how does one of these codes work?
Count Commodity Data for International Market Research
HS code is a number assigned to a product according to the product description. The product is then known through its HS code, which includes all information about the importer’s name, product description, City, destination, origin, product value, quantity, unit, etc.
Facilitate Customs Supervision Of Goods
The HS Code applies to all goods entering one country from another. All these items must be declared to the Customs by a specific HS code. Customs also need to use HS code to monitor the import and export of goods statistics.
Importer and exporter needs to define and classify the goods, they must search and coordinate the code to clear the customs lawfully. With HS code, the customs can really verify the need for the relevant products.
Easy To Calculate Import Duty Rates
The customs collects the import tax on the commodity according to HS code, and importer can find the tax rate by HS code of commodity. Each digit can be used to calculate and evaluate tariffs and taxes. It help people to determine the feasibility of imports and exports, and to carry out a lot of information on risk assessment and objectives.
All related activities, such as tariffs, excise or tax refund, or even the exemption of goods are all referenced in the HS code .It is because of these roles that people are more concerned about HS code, it becomes familiar code. If the product does not exist in the HS code list, then the trader would have trouble in looking for a specific product section.
Understanding these regulations has become an indispensable part of all exporters and importers.
The code determines the consistency of the import and export of the product, and the customs will levy taxes according to the code . Every businessman has to mention the specific HS code of all his products in other important documents that need to be prepare in when importing.
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