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What is HS Code – Harmonized System (The complete Guide)

What is HS Code?

Harmonized Commodity Description and Coding System is commonly known as the HS Code or Harmonized System. The World Customs Organisation (WCO) has introduced and maintain the HS codes to identify products in international trade.

What is the use of Harmonized System Codes?

A language also has subgroups among its users. For example, native users of a language use different words to name the same product based on the region or the province they live in. When it comes to international trade different countries can have several names for the same product. In such situations, there can be disputes between shippers and consignees as well as among different authorities like the border control body. Due to the misunderstanding, there could be situations where the consignee receives goods differed from what he has ordered. Or the taxes differ from what has expected.

To avoid these types of miscommunications WCO has introduced one common language to identify goods in the international market, which is HS codes. When the consignee mentions the product with the HS code shipper knows exactly the consignee’s requirement so the customs officers. Normally HS code of the product mention under the BL description too for easy reference of the border controllers. This will keep both the customs officers and CHA‘s life at ease.

Border control bodies impose taxes and duties on the products by considering the HS code.

How to Classify Numbers in HS Code?

WCO has introduced 6 digits for a HS code. But they have allowed countries to have their national level subheadings after the 6 digits.

How to Classify Numbers in HS Code-What is HS Code - Harmonized System (The complete Guide)-dailylogistic.com

Some countries have online Harmonized System code finders as below

What is HS Code - Harmonized System (The complete Guide)-dailylogistic.com
Source: http://www.customs.gov.lk/business/hsfinder

In the tables under chapters have markings. Each marking has a meaning

HS Heading

HS Subheading

National Subheading

—- National Subheading

How to Identify the HS Code Correctly (Step by Step)?

HS codes book has 21 main sections. First, you have to read the section headings and identify the correct section, which your goods will fall. Now you know the correct section!

Once you turn the selected section page, you can find there are some section notes and chapter notes. Please read them.

Done??

Okay. With the notes, you can identify whether the commodity you are looking for is under the table in the sections or excluded from the table.

If the commodity is excluded, it’s in the Harmonized System code basket. Directly read the basket.

If it’s not excluded start reading the headings of the chapters.

Found the correct chapter?

Good Job!

Start reading the headings under the selected chapter.

Select a suitable heading.

You are doing it right!

Now start reading the subheadings under the selected heading.

Select the HS code under the subheading section

Still, have Confusions on Selecting the Harmonized System Code?

There are some guidelines listed by WCO namely “General Rules”. Please refer them to resolve your problems.

Need Further Clarifications in HS Code Selection?

You have one last reading. Please refer to the “Explanatory Notes”.

What will happen If Customs Officer doesn’t Agree with your HS Code at Clearance?

You have selected the Harmonized System code and ready for international shipping. You will have an issue if the customs don’t agree with the HS code you have used at the clearance. If you and the customs officers are unable to negotiate the dispute, you can share your issue with the “Customs Classification Department” and resolve the issue.

Couldn’t Finalise the Harmonized System Code with the classification department?

There is one last party you can raise your grievances. It is the “Harmonised HS Code Committee on WCO”.  Their decision will be the final and you won’t be able to challenge it.

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