Silk Bridge Journal

Definition

An HS Code (Harmonized System Code) is a code used to classify goods in international trade. The HS system was developed under the World Customs Organization (WCO) and provides the basis for classifying products in most countries around the world.

HS Codes allow customs authorities to determine how a particular product should be classified and which requirements may apply to its importation. The correct classification can be used to determine applicable customs duties and identify additional import requirements.

It is important to note that the first six digits of an HS Code are internationally harmonized, while individual countries and customs territories may use more detailed extensions of the code.

Why Should Importers Know This?

Correct product classification has a direct impact on the calculation of import costs. An incorrect code can result in incorrect duty calculations, customs clearance problems, delays, and, in certain circumstances, financial penalties.

The HS Code may also be relevant when determining whether a product is subject to additional requirements, restrictions, or formalities.

Related Terms

Duty · VAT · Customs Clearance · Certificate of Origin · Landed Cost · Incoterms®

In Practice

An HS Code should not be selected solely on the basis of the product name or a code provided by the manufacturer. Proper classification should take into account the actual characteristics, material, intended use, and nature of the product.

The correct HS Code is essential for accurately calculating import costs – incorrect classification can affect both the costs involved and the ability to legally place a product on the market.