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    Harmonized System

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    Ajin lal
    The Harmonized System (HS) is an internationally standardized system for classifying traded products that was introduced in 1988. It is maintained by the World Customs Organization, which has over 200 member countries that have agreed to use the HS system. The HS code is a six-digit number that classifies over 5000 commodity groups within 99 chapters and 21 sections to facilitate international trade and customs procedures. It provides a common language for countries to communicate about traded goods in a standardized way.

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    Harmonized System

    Uploaded by

    Ajin lal
    68 views4 pages
    The Harmonized System (HS) is an internationally standardized system for classifying traded products that was introduced in 1988. It is maintained by the World Customs Organization, which has over 200 member countries that have agreed to use the HS system. The HS code is a six-digit number that classifies over 5000 commodity groups within 99 chapters and 21 sections to facilitate international trade and customs procedures. It provides a common language for countries to communicate about traded goods in a standardized way.

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    HS system or Harmonized system .It is used for classification of goods by giving 6 digit number

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    The Harmonized System (HS) is an internationally standardized system for classifying traded products that was introduced in 1988. It is maintained by the World Customs Organization, which has over 200 member countries that have agreed to use the HS system. The HS code is a six-digit number that classifies over 5000 commodity groups within 99 chapters and 21 sections to facilitate international trade and customs procedures. It provides a common language for countries to communicate about traded goods in a standardized way.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    68 views4 pages

    Harmonized System

    Uploaded by

    Ajin lal
    The Harmonized System (HS) is an internationally standardized system for classifying traded products that was introduced in 1988. It is maintained by the World Customs Organization, which has over 200 member countries that have agreed to use the HS system. The HS code is a six-digit number that classifies over 5000 commodity groups within 99 chapters and 21 sections to facilitate international trade and customs procedures. It provides a common language for countries to communicate about traded goods in a standardized way.

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    © All Rights Reserved
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    Harmonized System (HS)

    The Harmonized Commodity Description and Coding System, also known as the Harmonized
    System (HS) of tariff nomenclature is an internationally standardized system of names and
    numbers to classify traded products. It came into effect in 1988 and has since been developed
    and maintained by the World Customs Organization (WCO) (formerly the Customs Co-operation
    Council), an independent intergovernmental organization based in Brussels, Belgium, with over
    200 member countries.

    The system was first implemented in 1988 and is currently maintained by the World Customs
    Organization. The HS Convention, signed in 1983, has over 205 member countries. As
    signatories, each country agrees to classify its HS tariff code and duty structure according to the
    HS Code categories.

    HS Code Structure

    The HS code can be described as follows:

     It is a six-digit identification code.


     It has 5000 commodity groups.
     Those groups have 99 chapters.
     Those chapters have 21 sections.
     It’s arranged in a legal and logical structure.
     Well-defined rules support it to realize uniform classification worldwide.

    How is the HS Code Used?

    The system is used by many economies around the world 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.

    Through its contribution to the harmonization of customs and trade procedures, the HS code
    reduces the costs related to international trade as there is no “translator” required for people to
    read and understand this code.

    As of this article, the HS code has 99 Chapters covering 21 Sections. To understand what the
    code means, we can take 1704.90.10.00 as an example:
    17 relates to Chapter 17 of Section IV – Prepared foodstuffs; beverages, spirits, and vinegar;
    tobacco and manufactured tobacco substitutes

    04 relates to sugar confectionery (including white chocolate), not containing cocoa

    90 relates to confections or sweetmeats ready for consumption:

    10.00 relates to candied nuts

    So in essence 1704.90.10.00 = candied nuts.

    Why is HS Code important?

    Because it’s widely used in:

    Customs tariffs (aka HTS, Harmonized Tariff Schedule)

    Collection of international trade statistics

    Rules of origin

    Collection of internal taxes

    Trade negotiations (e.g., the World Trade Organization schedules of tariff concessions)

    Transport tariffs and statistics

    Monitoring of controlled goods (e.g., wastes, narcotics, chemical weapons, ozone layer depleting
    substances, endangered species)

    Areas of Customs controls and procedures, including risk assessment, information technology
    and compliance

    Advantages

    This code is used by various international organizations, governments for the purposes of taxes,
    trade policies, monitoring, the setting of freight and transport tariffs, gathering of transport and
    trade statistics and economic research and analysis among other uses. It does not matter what
    mode of transportation you are using.

    Challenges in Classification for Companies

    The acceptance and versatility of the HS code as a universal economic language and code for
    goods has made it an indispensable tool for international trade which is incorporated into many
    of the customs clearance systems around the world.
    Using the correct HS code can be quite tricky in certain instances as an interpretation of the
    codes may vary between countries and customs authorities. Improper usage of the HS code could
    result in an improper tariff being applied by customs which can increase the cost of imports
    exponentially to the customer.

    Using the correct HS code and the right interpretation is of utmost importance for an importer as
    usage of incorrect code may be considered by customs as non-compliance, misleading or
    misdeclaration – all of which comes with its associated penalties.

    When in doubt, it would always be prudent to consult customs directly or experts in the customs
    clearance companies for advice on the correct HS codes to use.

    EXAMPLE

    HS Code Lookup: Categories and Sections

    There are 21 Harmonized System Sections – the highest level of customs tariff code
    categorization. This HS code list is used to unify broad categories, like different types of
    vegetables (Section II, chapters 6-14). These sections are dictated by the WCO and are unified
    across every member country. The 21 HS Code sections include the following:

    SECTION CATEGORY CHAPTERS

    Section 1 Animal & Animal Products Chapter 1-5

    Section 2 Vegetable Products Chapters 6-14

    Section 3 Animal or Vegetable Fats and Oils Chapter 15

    Section 4 Prepared Foodstuffs Chapter 16-24


    Section 5 Mineral Products Chapter 25-27

    Section 6 Chemicals & Allied Industries Chapter 28-38

    Section 7 Plastics / Rubbers Chapters 39 and 40

    Section 8 Raw Hides, Skins, Leather, & Furs Chapter 41-43

    Section 9 Wood & Wood Products Chapters 44-46

    Section 10 Pulp of Wood or of Other Fibrous Material Chapters 47-49

    Section 11 Textiles Chapters 50-63

    Section 12 Footwear / Headgear Chapters 64-67

    Section 13 Stone / Glass Chapters 68-70

    Section 14 Natural or Cultured Pearls Chapter 71

    Section 15 Base Metals Chapters 72-83

    Section 16 Machinery / Electrical Chapters 84-85

    Section 17 Transportation Chapters 86-89

    Section 18 Precision Instruments Chapters 90-92

    Section 19 Arms and Ammunition Chapters 93

    Section 20 Miscellaneous Manufactured Articles Chapters 94-96

    Section 21 Works of Art Chapter 97

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