What is HS Code? Definition of HS Code Harmonized System
HS Code or The Harmonized Commodity Description and Coding System, which is also known as the Harmonized System (HS) HS code which is defined as the international standardized system of product names and numbers to classify products for trading.
HS Code Definition according to WCO:
HS Code or “The Harmonized Commodity Description and Coding System generally referred to as “Harmonized System” or simply “HS” is a multipurpose international product nomenclature developed by the World Customs Organization (WCO).
HS comprises about 5,000 commodity groups; each identified by a six digit code, arranged in a legal and logical structure and is supported by well-defined rules to achieve uniform classification.
This Harmonized system is used by more than 200 countries and economies as a basis for their Customs tariffs and for the collection of international trade statistics. Over 98 % of the merchandise in international trade is classified in terms of the HS.”
HS Code History
Due to the the lack of uniformity between the too many different classification systems around the globe that had grown up throughout the world had become a major concern for the trade business. Since that time, several attempts have been made to create an international system of classification that can be used to serve this purpose. On 1988, most of the World Customs Organization WTO members adopted the new Harmonized System HS Code. And it came into effect directly.
What are the applications of HS Codes?
HS code is being used by Countries’ Customs authorities, different statistical agencies, market research agencies and many other government bodies, to monitor and control the import and export of various commodities through:
- Transport tariffs and statistics
- Collection of internal taxes
- Monitoring of controlled goods
- Customs tariffs
- Collection of international trade statistics
- Rules of country of origin
- Trade negotiations
- Risk assessment, information technology and compliance.
- Also many companies are using HS codes to calculate the total landed cost of imported products as well as identify selling and sourcing opportunities.
HS Code Major Resources available for traders to help in classifying their goods:
There are several resources available to traders to assist in properly classifying their goods including:
- The Official Explanatory Notes to the Harmonized System, published by the World Customs Organization
- The US Census “Classify your Commodity” engine: https://uscensus.prod.3ceonline.com/
- Explanatory notes to the Combined Nomenclature of the European Union by the European Commission
- Customs Rulings Online Search System (CROSS), by U.S. Customs and Border Protection
- Binding Tariff Information (BTI), by the European Commission
- Informed compliance publications, by U.S. Customs and Border Protection
- Classification Guides, by HM Revenue & Customs