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What You Should Know About HS Code

This guide will explain what HS Code and the common challenges is faced while using it.

What You Should Know About HS Code

"What is the HS code for iPhone 12!"
"What is the HS code for Bomber Jacket!!"
"What is the HS code for Napa Valley Merlot!!!"

If you're struggling to find the Harmonised System (HS) code for your product, don't worry. The different interpretations of the code between countries and customs authorities are tricky even for experienced importers. By the end of the article, you will know how to start finding the HS code for your product.

Before we dive into the details, it's important to understand the basic concepts of HS code. In this article, you will learn:

  •  What is HS code?
  •  The nature of HS code
  •  How to do HS classification?
  •  How to find the foreign HS code?
  •  Why do you need to find the correct HS code?

What is HS code?

When trading internationally, each product must be assigned with HS code that corresponds to the importing country. It is an internationally accepted system administered by the World Customs Organisation (WCO) since 1988 to classify all imported and exported products. The code is used to unify broad categories to classify different types of products with ease.

To ship the product successfully, the correct HS code must be declared. This code is commonly used by customs for a variety of purposes - from levying tariffs and duties on the product to ensuring that an importer is not importing illegal or hazardous goods.

The nature of HS code

The HS code is harmonized at the 6-digit level and updated every 5 years. Use by over 200 WCO Members countries, each country agrees to classify its code and duty structure according to the HS code categories.

In general, HS code can be broken down into five parts. Consider the example of Napa Valley Merlot with 14.5% alcohol content - 750ml:

Breakdown of 2204.21.7000 in US Schedule B for export goods

Breakdown of 2204.21.7000 in US Schedule B for export goods

1. Section

There are 21 sections - the highest level of customs tariff code categorization. It includes a broad spectrum of products from Live Animals; Animal Products to Works of Art, Collectors' Pieces, and Antiques.

2. Chapter

The 21 sections then split into 96 chapters where chapter 77 is reserved for future use and chapters 98 & 99 are limited to national use.

3. Heading

The heading dictates the specific category within a chapter.

4. Sub-heading

The last two digits of the international Harmonised Code are more specific, defining subcategories of product.

5. Additional digits (> 6 digits)

To cater to country-specific categorizations, unfortunately, countries append additional digits (commonly 2-4 digits and may include alphabetical suffix for certain countries) to the harmonized 6-digit for further classification of products that are unique in every country. This dramatically increases the complexity of classifying products.

Under the US Schedule B for export goods, our Merlot with 14.5% alcohol content is classified to 2204.21.7000. Incidentally, Merlot with < 14% alcohol content should classify to 2204.21.4000. Since these additional digits are unique, the same product in another country would begin with the same 6 digits but the additional digits would likely be different.

We will elaborate further on this in the section: How to find the foreign HS code.

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