If you are doing international business and have any questions about HS code, then you need to check this guide, you can find your questions below and check our answer.
If you can not find the right answer, then please contact me at any time.
- What is the HS Code of a product?
- What is HTS?
- What do Schedule B codes mean?
- How are HTS codes chosen?
- How Can I Use Images to Find Related HS Codes?
- How can I Obtain Better HS Code Results?
- What If I Don’t Find What I Am Looking For?
- What Are Hs Codes Comprised Of?
- How Are Hs Code Digits Broken Down?
- Where Are The Hs-6 Digit Level Exceptions Applied?
- What Are These Digits Called?
- How Is The Hs Structured?
- What Is HS Tariff Classification Number?
- Are Hs And HTS Codes Different?
- What is the difference between Schedule B and HTS codes?
- What Is An Hs Code For Exporting And Importing?
- What Happens When Your Hs Code Is Wrong?
- What Happens When Your Hs Code Is Wrong?
- Are Hs, Hts, Schedule B And Commodity Codes The Same?
- Are Hs Codes The Same For All Countries?
- What Is the HSN Code for Gold?
- What Is the HS Code for IP Camera?
- Is Hs Code A Benefit in Import and Export?
- What Is the Hs Code of Diammonium Hydrogen Phosphate?
- Is 8 Digit HSN Code Mandatory?
- How Hs Codes Affect Custom Duty?
- Are HSN Products Classification Simple?
- Are There Consequences For Using Wrong Hs Codes?
- What Are the Benefits of Using HS Codes?
- How Can I Determine the Customs Duty for a Product?
- How Does Service Accounting Code (Sac) Relate to GST?
- How Can I Classify My Product Correctly?
- What Is GST?
- What Is The HS Code For Shipping Cost?
- Where Can Hs Codes Be Applied?
- What Is the HSN Code for Work Contracts?
- Where Can I Get Hs Code API?
- What Is Meant by Reasonable Care?
What is the HS Code of a product?
HS Code is an acronym for “Harmonized System”.
It is an international system of naming and classifying commodities that we want to ship.
It gives room for traded products to be categorized regularly.
This will assist member countries for custom purposes.
At the international level, the HS Code (for the classification of products) is usually a six-digit code.
There are specific guides to be followed for importing from China to any other country using these HS Codes.
To broaden your knowledge about HS Codes, you can check out this video.
What is HTS?
This is the Harmonized Tariff Code Schedule (HTS).
They capture their first digits from the international HS code and add an extra four digits to make it more extensive.
For example, Section 09 is “Tea, Mate, Coffee, and Spices”.
0901 is “Coffee, Coffee Husks, substitutes with coffee”.
0901.11 is “Coffee, Not Decaffeinated, Not Roasted”.
0901.11.0015 is, “Coffee, Arabica, Not Decaffeinated, Not Roasted, Certified Organic”.
That is how this works.
It must be very particular and specific depending on the type of your product, as you can see here.
Structure of HTS Codes
What do Schedule B codes mean?
These codes are a subset of HTS codes.
It makes things more specific.
For a US exporter, you must make use of the 10 – digit HTS subsets called Schedule Bto export your goods.
Failure to classify products appropriately will lead to sanctions, fines, and other penalties.
How are HTS codes chosen?
They are usually administered by the United States International Trade Commission.
All US importers need to understand the use of correct HTS-US codes.
This is because custom duties are assessed based on this classification.
Structure and Example of an HS Code
Why are HTS codes important to the Government?
HTS codes are used by government officials to determine the type of goods that are exported and imported.
This is done for tax collection.
This tax generates revenue for the government.
How Can I Use Images to Find Related HS Codes?
Visit findhs code to make both textual and visual search for products HS codes.
It is fast and very accurate.
How can I Obtain Better HS Code Results?
Make use of two or more HS code search engines and compare their search results.
Search results that align on both or all used search engines are more likely to be accurate.
What If I Don’t Find What I Am Looking For?
You can contact a fulfillment provider.
He or she should be able to guide you and provide relevant information on your search.
What Are Hs Codes Comprised Of?
These codes are composed of about 5300 article or product descriptions.
They are grouped in 21 sections.
They are also arranged in 99 chapters.
How Are Hs Code Digits Broken Down?
They are grouped into six digits.
It can be further broken down into three parts.
The first two digits (HS-2) reveal the chapters of each product.
For instance, 09 represents Tea, Spices, Coffee and Mate.
The subsequent two digits (HS-4) deals with the groupings within that chapter.
For example, 09.02 represents Tea.
This does not tell us about its flavor.
The next two digits (HS-6)tell us more about the product.
For example, 09.02.10 tells us the tea is non-fermented Green tea.
It is important to note that all countries categorize products in similar ways up to the HS-6 digit level.
There are only a few exceptions.
HS Classification code list
Where Are The Hs-6 Digit Level Exceptions Applied?
This system of classification does not apply to all countries.
Some countries still utilize the old and obsolete versions of the HS code.
What Are These Digits Called?
The first two digits are called ‘Chapters’.
The first four digits are called ‘Heading’.
The last six digits are called ‘Sub heading’.
A total breakdown of an HS Code
How Is The Hs Structured?
The Harmonized System is arranged in a simple logical way.
For instance, animals and its products are located in one section of the HS.
Machine parts and appliances can be found in another section.
They have Chapter and Section titles describing wide categories of goods.
Headings and subheadings describe the products in more specific terms, as shown clearly here.
Typical Structure of the Harmonized System
What Is HS Tariff Classification Number?
This is a number that is shown on import documentation.
It is necessary for determining the type of product that is being imported.
It is a 10-digit number.
Typically, every good has its own unique HS tariff classification number.
An agency called the Canada Border Services Administration ‘CBSA’ makes it compulsory to have an H.S. Tariff Classification Number.
This number is provided in Box 27 on B3 Customs Coding Form.
This is a method of identifying products to be imported.
The number is also required on various other (CBSA) forms.
Are Hs And HTS Codes Different?
HS stands for Harmonized System.
HTS stands for Harmonized Tariff System.
HS has 6 digits while HTS has 8-10 digits.
They are the same.
The difference is that HTS codes are used to specify the country you are importing from.
The HTS code takes the same form as an HS code for the first six digits.
The subsequent four digits differ.
Difference between HS and HTS Codes
What is the difference between Schedule B and HTS codes?
The Schedule B codes are subsets of the HTS codes for U.S. importers.
This implies that they are made up of 10 digits.
Schedule B codes are used by the United States government.
They use it to monitor U.S. exports for statistical purposes.
Just as the HTS codes, the first six digits of the Schedule B codes should be equivalent to that of the HS codes.
However, the subsequent four digits may be different from that of the HTS code.
To know more about their differences, watch this video.
What Is An Hs Code For Exporting And Importing?
HS Code is an international system that is used for product classification, especially for shipping.
It gives room for member countries to categorize traded goods on a general basis.
They are unique numbers that are used in the identification of various types of products all over the world.
The custom agent or the individual in charge will apply for this number when submitting to customs in the importing country.
This is done to approve the rate of import tariff when importing into that country.
For instance, if you need help importing tea from China using HS codes, Bansar can assist in recommending the best Chinese tea supplier.
HS Classification for specific women’s clothing
What Happens When Your Hs Code Is Wrong?
It is very important to provide the customs clearance agent with as many details as possible about the products to be imported.
This is to ensure that goods can easily be cleared through custom.
However, if the HS code is incorrect, then importers will be required to pay more in import duty.
In some rare cases, they may not pay import duty at all.
If an incorrect HS code is used to clear goods at the custom, you can be prosecuted.
You can be asked to pay fines or serve other forms of punishment.
What Are Commodity Codes?
When importing and exporting goods, it is required by law to pay a certain amount of money as tax.
This amount varies depending on the types of products.
Commodity codes are used for the classification of various goods.
This is to ensure that the appropriate amount of tax can be paid.
Every product will be assigned a unique commodity code as dictated by the International Harmonized System (HS).
Are Hs, Hts, Schedule B And Commodity Codes The Same?
Yes, they are basically the same.
The Harmonized Tariff Schedule (HTS) is used for Customs import Declaration as a product classification.
Commodity codes (also known as Schedule B numbers) are the product classification used for Customs Export Declaration.
Each of them is dependent on the commonly agreed numbering schemes.
This scheme was introduced by the World Customs Organization (WCO).
They all have something in common which is their first 6 digits.
The same cannot be said for the subsequent ones.
Are Hs Codes The Same For All Countries?
The first 6 digits of the HS code of a product are the same but subsequent digits vary for individual member countries.
For instance, the HTS Code in the USA is up to 10-digit level.
The HSN Code in India is 8 digits and that of China is also up to 8-digits.
What Is the HSN Code for Gold?
The HSN Code for regular gold jewelry is 7113 19 10.
Gold jewelry set with pearls is 7113 19 20.
Gold powder is 7108 11 00 and for other unwrought forms of gold is 7108 12 00.
For other semi-manufactured forms of gold, the HSN code is 7108 13 00.
For monetary gold, it is7108 20 00.
For gold base metals or silver clad with gold is 7109 00 00.
More on this can be found here.
What Is the HS Code for IP Camera?
For an IP Camera, the HS Code is 852580.
This comprises a video camera and digital camera record.
IP is an abbreviation for Internet Protocol and an IP Camera is an electronic item.
Chapter 85 incorporates electronics items.
Products such as digital camera, video recorder cameras and television camera all come under the HS code 8525.
Is Hs Code A Benefit in Import and Export?
The HS code is not necessarily a benefit.
In fact, it is more of a requirement.
It is used to label the particular type of product after shipping.
This is necessary for the determination of its import duty rate in the country of import.
What Is the Hs Code of Diammonium Hydrogen Phosphate?
This product called Diammonium hydrogen phosphate belongs to Fertilizers under HS code 31.
It is specifically a chemical fertilizer under HS code 3105.
Is 8 Digit HSN Code Mandatory?
As earlier stated, the HSN code is an 8-digit number while the SAC code is a 6 digit number.
The digits are to be included in the GST Return and GST Invoice.
Later on, I will expatiate further on the meaning of GTS and what it entails.
How Hs Codes Affect Custom Duty?
It is a tradition for tariffs and duties to be imposed on exports and imports based on the classification codes assigned to them.
For a duty rate to be assigned to an item, you must ensure that the product is assigned a classification number which is used by the receiving country.
Relationship between HS codes and custom duties
Are HSN Products Classification Simple?
No, they are not simple.
They can be confusing.
The large number of products that we classify with HSN makes it confusing.
Categorization is done by placing several factors into consideration.
Some factors include form, composition, and use.
Let’s take potato as an example.
Merely looking on the surface, its classification would seem pretty straightforward.
Unfortunately, it is not.
For fresh potatoes, they are categorized under the header “Potatoes, fresh or chilled” with the code 0701.90.
On the other hand, frozen potatoes are placed under the category ‘Vegetables’ (cooked or uncooked by boiling in water),‘frozen’ and under the subheading of ‘Potatoes’ with the code 0710.10.
From these, we can conclude that the HS is very comprehensive and not so straightforward.
Let’s look at another example: the classification of picture frames.
Wooden frames are given the HS code 4414.00.
They are under the heading Wooden frames for mirrors, photographs, paintings, and other related objects.
On the other hand, plastic frames are assigned the code 3924.90 under the heading Kitchenware, tableware, and other plastic household articles.
Finally, we examine “dogs” which are assigned the code 01.06 under the heading “residual” and are classified under “Other live animals”.
This is because its code isn’t within the range under headings 01.01 – 01.05.
In essence, every product for import or export must be carefully assigned an appropriate HS code to avoid sanctions and punishment.
Do not assume when assigning codes to products.
Take your time to make sure it is right.
HS Classification for specific plants and animals
HS Classification for Vegetable Products
Are There Consequences For Using Wrong Hs Codes?
Of course, there are consequences for using wrong codes.
- You can miss out on a free-trade arrangement.
For instance, the wrong code you use may not be part of the items included in the list.
This means you will pay duty on a product that you should have traded duty-free.
- You may be overcharged on customs duty.
Different products bear varying custom duties.
- Choosing a wrong HS code may result in paying more as duty charge.
- You may also face certain penalties from custom authorities.
They may think you want to cheat their government.
Furthermore, your products may be delayed, and your customers are made to wait for long.
This could piss off your customers and earn you a bad reputation.
What Are the Benefits of Using HS Codes?
The benefits include:
- opportunity to enjoy duty-free trade in free-trade zones;
- easy clearing of products from customs office;
- positive business outlook; and
you can avoid delaying product delivery to your clients.
How Can I Determine the Customs Duty for a Product?
You can ask your local customs office.
You can also use freightos search engines to determine the customs charge on your products.
How Does Service Accounting Code (Sac) Relate to GST?
Just like products, services are uniformly classified for identification and taxation purposes.
Codes used for services are referred to as Services Accounting Code (SAC).
An example is given below.
Legal services (such as documentation and certification of intellectual property, patents, and copyrights) are coded 998213.
The first two digits (99) are generic for all services.
The next two digits (82) indicate the primary nature of the service.
This is legal services in this example.
The last two digits (13) indicate a clearer explanation of the nature of services, such as legal documentation for patents or copyright.
To learn more about SAC and its relationship with GST, click here.
How Can I Classify My Product Correctly?
There are a lot of resources available on the internet to assist in determining the correct HS code for your impending imports or exports.
- The US Census Bureau Schedule B Search Engine
- The US Customs Rulings Online Search Engine
- Export Training Videos from the US Census Bureau
What Is GST?
This is an abbreviation for Goods and Services Tax.
The GST is paid by the consumers.
The GST is paid to the government by the business.
Therefore, in essence, the Government rely on GST for revenue.
The GST is also a form of tax.
It is an indirect tax that is added to the cost of a particular good or service.
Every business adds this GST to the price of each of its products.
A customer who acquires the product will pay the sales price plus GST.
The GST is collected by the seller and paid to the government as a form of revenue.
In some countries, GST is known as Value Added Tax (VAT).
What Countries Use GST?
The first country to implement the GST scheme was France in 1954.
Ever since several countries have adopted this tax system since it is quite profitable.
Some of these countries include Vietnam, India, Spain, Italy, South Korea, Canada, Monaco, Australia, Nigeria, Singapore, Brazil, and the United Kingdom.
How Does the GST Work?
Most countries use the single unified GST system.
This implies that a single tax rate is used throughout the whole country.
A country with a single unified system merges all taxes (central taxes and state-level taxes) and collects them as a single tax.
Some of these taxes which are merged include sales tax, service tax, excise duty tax, entertainment tax, transfer tax, entry tax, luxury tax, and sin tax.
These countries place a tax on almost every single product and service at the same rate.
What Is HSN Code In GST?
Now that we know what GST is all about, the link between HSN and GST can now be properly explained.
In some countries such as India, HSN codes are used for the regular Customs, Excise, and Value Added Tax (VAT) laws.
Recently, there have been proposals to use the codes under Goods and Services Tax (GST) law to categorize goods and products.
The HSN code has to be declared on the tax invoice.
It should also be stated when filing the GST returns.
WHAT IS THE HS CODE FOR SHIPPING COST?
It is important to note that HS codes are not needed to calculate the shipping cost.
The HS Code is only needed by the importer to determine the amount of import duty.
Shipping cost is the element that is put into consideration when custom duty is calculated.
Where Can Hs Codes Be Applied?
As of 2018, 220 countries were utilizing the Harmonized System worldwide.
HS Codes are used by several people to oversee the import and export process.
This includes statistical agencies, custom authorities, and other government regulatory bodies.
They oversee imports through the following:
- Transport statistics and tariffs
- Custom tariffs
- Trade negotiations (for instance, the World Trade Organization schedules of tariff concessions)
- Collection of international trade statistics
- Monitoring of controlled goods (e.g. ozone layer depleting substances, wildlife trade, narcotics, endangered species, wastes, and chemical weapons).
- Collection of internal taxes
- Rules of origin
- Areas of Customs procedures and controls, including information technology, compliance, and risk assessment.
Some companies use HS codes to locate good sources of items and good selling opportunities abroad.
They also use it to calculate the total cost of imported parts and products.
What Is the HSN Code for Work Contracts?
Work Contracts are categorized under SAC (Services Accounting Codes) for GST.
The SAC (Services Accounting Codes) list is used to classify services.
On the other hand, HSN (Harmonized System of Nomenclature) list is SAC’s equivalent for products.
Work Contracts Service is coded 9954 based on SAC classification.
It is further classified as:
SAC 99541 indicating Construction Services related to Buildings.
SAC 99542 indicating General Construction Works of Civil Engineers.
SAC 99543 indicating Site Preparation Services.
SAC 99544 indicating Assembly and Erection of Prefabricated Constructions.
SAC 99545 indicating Special Trade Construction Works.
SAC 99546 indicating Installation Works.
SAC 99547 is indicating Building Finishing Works.
Where Can I Get Hs Code API?
You can get some websites online which have APIs
These websites can make your products and services’ classification much easier and better.
APIs usually use inputs such as product names, brands, product descriptions, and manufacturer to assign unique codes to products.
Semantics3 is a tool that is used to assign HS codes to your product.
What Is Meant by Reasonable Care?
The term “Reasonable care” means compliance with customs rules and regulations.
This idea was as a result of the US 1993 Customs Modernization Act (famously referred to as the “Mod Act”).
The act amended some sections of the Tariff Act of 1930.
This changed the way trade communities and customs interact during international trade.
It makes us know that the business community and the customs office are both responsible for compliance with the Importer of Record (IOR).
This concept gives us a better understanding of the legal responsibilities of the trade community.
For instance, the trade community is expected to classify and determine the value of imported products and services.
It also makes information available to customs.
Customs use this information to assess and collect duties, gather accurate statistics and check for compliance with rules and regulations.
The Customs office is responsible for providing guidance and support to the trade community.
How Can an Importer Demonstrate Reasonable Care?
The first step is to get acquainted with the rules and regulations guiding imports.
Next, we can ask questions on controversial issue sat the customs office.
Abiding by established rules and regulations follows.
Lastly, importers should ensure they know about changes in customs regulations quickly.
We hope we have been able to explain how HS codes work and other related issues.
If you need clarifications on points raised in this post, please feel free to drop your comments.
We’ll be sure to follow up on you.