HS codes were developed by the world customs organization. The HS code is an acronym for harmonized system code. It is a multipurpose international product nomenclature that describes the type of good for export and import purposes.
In addition to governments, the list of hs codes is also used by private-sector firms and international organizations. It is utilized to monitor, update, and optimize controlled goods, internal taxes, rules of origin, trade policies, transport statistics, freight tariffs, a compilation of national accounts, quota controls, price monitoring, traffic statistics, and economic research along with analysis. Thus, the list of HS codes is regarded as an indispensable tool for international trade, universal economic language, and coding for goods.
The harmonized system code is governed by the international convention on the harmonized commodity description and coding system. The WCO does the work of maintaining the search hs code online.
The six digits of the HS code can be broken down into three parts.
- First two digits (HS-2) identify the chapter the goods are classified in
- Next two digits (HS-4) identify groupings within that chapter
- Last two digits (HS-6) are even more specific
Up to the HS-6 digit level, all countries classify products in the same way but exceptions exist when some countries apply old versions of the HS code.
Importance of correct HS code
- Right usage and correct interpretation of the HS codes are of great importance for any trader as the usage of incorrect code may be considered by customs as non-compliance and misleading causing penalties for the traders.
- A wrong use of the HS code could result in an improper tariff application by customs, which can increase the cost of imports to the customer.
If you’re in doubt about the correct HS codes to use, then get in touch with the top Indian Exim Data provider- SEAIR Exim Solutions to view the updated version HS codes list revised in 2017.
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