What is HS Code? Why is it crucial for the import and export of goods?

Updated: 14-Oct-2022
What is HS Code? Why is it crucial for the import and export of goods?

HS codes are product identification numbers used in international trade that are recognized by most countries. The World Customs Organisation (WCO) manages the HS codes, which are widely used by businesses and customs officials to identify commodities.  Harmonized commodity description and coding system or HS is a term utilized for the classification of globally traded products by names and numbers. In this article, we will discuss the HS Code and its significance in import and export.

Everything you need to know about HS Code

The World Customs Organization's Harmonized Commodity Description and Coding System is known as the Harmonized System (HS) Classification. It is an international system for classifying goods for customs purposes that give each category of goods a special 6-digit HS code. The Customs Cooperation Council first used the system in 1983. Although most nations in the globe have standardized their HS codes, there are notable exceptions.
The word "harmonized commodity description and coding system," or "HS," is known as the system of naming and numbering things that are traded internationally. The average HS Code contains 6 digits. These six numbers are then categorized into three groups of two digits each. The HS Code's structure is considered to be this. The HS Code is written as follows: 420222. A description of the imported or exported product is provided for every set of two digits.

  • The first 2 digits Include: the HS chapter (the type of commodity)
  • The second 2 digits Include: HS heading (raw material information)
  • Third 2 Digi Includes: HS subheading (finished or non-finished good)

Rules for Harmonised System and HS codes

There are certain rules that govern and manage the Harmonised System and HS codes. These are:

1. General Rules for Harmonised System:

These make sure that a certain product is exclusively linked to one heading (and subsection) and none else. There are six general rules of interpretation (GRI), and they are arranged in ascending order, starting with GRI 1 and continuing through GRI 6 and 7.

  • GRI 1 states that “classification is considered by the terms of the headings and of the section or chapter notes”. If a classification cannot be thus determined, then GRI 2 to GRI 5 is applied.
  • GRI 2 has two parts. GRI 2 (a) extends the scope of a heading to cover not just completed products but also “incomplete”, “unfinished”, “unassembled” or “disassembled” products, provided they have the “essential character” of the finished product.
  • GRI 3 lays down the rules for classifying goods that fall under more than one heading.
  • GRI 4 applies to goods not specifically covered by any heading (perhaps because they are newly introduced).
  • GRI 5 applies to the classification of boxes, containers, and cases in which commodities are packed (cases for cameras, guns, jewelry, etc.). The classification of any packaging that is not covered under GRI 5 is left to the discretion of countries.
  • GRI 6 contains a classification of goods in the sub-headings.

Importance of HS Code in the Import and Export of goods

The HS harmonized system code is essential because it interprets the product's information and enables both parties to avoid unintentional catalog-based confusion during the exchange. The further components that heavily required HS Codes are as follows:

HS Code for Import and Export

The most crucial action for shippers to do before arriving at the import and export markets is to assign an HS Code. The importance of the HS code could be considered by importers and exporters. Most frequently, providers just acquire purchase orders from importers and send their products without having Export Import Data of an item's HS code. It is not a good business practice to ship before assigning an HS code as this can lead to significant issues that could be expensive, detrimental to both parties' primary companies, and damaging to one's reputation. Following are the other elements where HS Codes are primarily required:

  • Import and export tariff rates are certain of the product category.
  • Acquire and analyze Global Trade data.
  • Internal taxes and liability to pay.

HS Code for Government Officials

HS Codes are significant for government officials to identify goods being imported and exported in order to acquire the proper taxes.

Harmonized System Codes are referred to as HS Codes. HS classification codes can be seen as the last obstacle that products must overcome before shipping is complete. Aside from aiding in the clearance of products through customs, these 6–10-digit numbers known as Harmonized Tariff Codes serve two main functions and purposes:

  • They identify the goods that cross a nation's borders for import or export.
  • Products are categorized and classified in a global system that is utilized for customs clearance.

How to Find HS Code with EximPedia?

HS codes are significant. A business must specify its business scope, which combines the HS codes of the goods it intends to import, export, and trade, as part of the registration procedure. This list will ultimately determine whether the company needs additional licenses and what steps are required to be taken. The HS Code list also assists exporters and importers in avoiding frequent foreign exchange issues such as exchange halts at the border, denial of access to import privileges, and additional fines EximPedia is a platform where you can obtain your product-specific HS code. They will help to find out the HS code for your products. They also provide Import Export data, Global trade data, and Custom Data and provide you updated HS codes to grow your business greatly.


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