What is an HS Code?
An HS code, also known as the Harmonized System code or Harmonized Commodity Description and Coding System (HS), is a globally standardized system for classifying traded goods. It's essentially a product identification code used by customs authorities worldwide to:
Identify and categorize goods: HS codes help classify products consistently across different countries, making international trade smoother.
Assess duties and taxes: The HS code assigned to your product determines the import duties and taxes it will be subject to.
Gather trade statistics: HS codes help track the flow of goods between countries, providing valuable data for trade analysis.
The Harmonized System is overseen by the World Customs Organization (WCO) and is updated every five years to reflect changes in global trade.
How HS Codes Work?
HS codes are typically six digits long, with each digit providing a more specific classification of the product. For example, an HS code might start with a broad category like "vegetables" and then become more specific with subsequent digits, ultimately identifying a particular type of vegetable.
Many countries use extended HS codes that add additional digits to the base six-digit code for even more granular classification. For instance, the United States uses a 10-digit code system known as the Schedule B number, where the first six digits correspond to the HS code.
Benefits of HS Codes
Standardization: HS codes ensure a common language for classifying goods across borders, simplifying international trade procedures.
Efficiency: HS codes streamline customs clearance processes by facilitating the identification and assessment of goods.
Transparency: HS codes provide predictability for businesses regarding import duties and taxes associated with their products.
