Last updated on October 2nd, 2022 at 01:38 am
The Top HS Code has a major impact on international imports and exports. Customs agents often allocate a 6–10-digit code to specific commodities.
These codes are verified as genuine all over the globe, and therefore assist in individually identifying each cargo while also ensuring a seamless and effective shipping process.
This page is for you if you’re interested in knowing about What is Top HS Code, its purpose, structure, and usage, as well as how to discover Harmonized systems code. You will learn all you need to know in this post. The following topics will be explored in this article:
- What is HS Code
- The role of the top HS code
- Who uses Harmonized System Code?
- When should we use Harmonized System code
- How to find the HS Code for your shipment.
- We’ll also discuss how the HS Codes differ in each country, and these codes are managed internationally.
What is Top HS Code?
“Harmonized System” is abbreviated as “HS,” and the full title is “Harmonized Commodity Description and Coding System.” The World Customs Organization (WCO) created the Harmonized System code in 1988.
The top HS code is a six- to ten-digit code that customs officials use to identify all items for import and export. The Custom Traffic Act establishes the system in Australian law for the first time.
HS Codes are used to individually identify each product and there are millions of them. The Harmonized System Code is used by all customs officials to identify each merchandise.
For Example:
- Let’s suppose, you buy a different kind of shirt from a supplier in China. The top HS Code China for the T-Shirts can be “5501.99” and the HS Code China for formal shirts is “5501.91” to uniquely identify the shirts.
- Take potatoes as a new example. Let’s suppose you buy different types of potatoes. The Harmonized System Code for fresh potatoes is “0901.99” and top HS Code for frozen potatoes is “0901.01” to uniquely identify the potatoes.
Structure of top HS Code:
Each top HS Code has a different struct as given below,
- Each Harmonized System Code has six digits
- Five thousand commodity groups
- Those groups further feature 99 chapters
- These chapters further have 21 sections.
Every top HS Code is designed according to the above structure. It was first published in 1974 at the Kyoto Convention.
Example
The best example to consider is as follows:
- Section 5 of the Harmonized System Codes is ‘Clothing Products”
- Chapter 6 of Section 5 is named ‘Shirts’
- Heading 02 of Chapter 6 is then named ‘T-Shirts’
- Subheading 20 of Heading 02 is then very precisely called ‘Formal Shirts”.
The top HS Code of these products is 1008.40. These digits show the product’s chapter, heading, and subheading to form a unique code that is used by customs officials to uniquely identify the goods.
This code is further divided into three groups of two numbers: The first group of two numbers identifies the product. The second group shows the classification and the third and final group of two numbers identify the actual product.
According to the recent report of custom authorities, more than 53,000 top HS Codes are in circulation and more than 97% of international trading depends on the Harmonized System Code to uniquely identify the goods.
Who uses Harmonized System Code?
The Harmonized System Code is used in over 200 countries around the world. Customs agents use these identifiers to uniquely identify merchandise that is being exported.
Not only is it used to individually identify commodities, but it is also utilized to apply applicable taxes, custom charges, and laws.
Governments also utilize the top HS Code to collect statistics on global commerce, and these codes aid in the creation of tariffs. Furthermore, private companies use the same Harmonized System Codes to track items, manage inventory, and develop trade strategies.
When to use Top HS Codes in shipping?
When you are shipping products from China to the USA, it’s very important to use the relevant top HS Code on your commercial invoice to uniquely identify the goods.
The benefit of using HS Code on your invoice is that the shipping process faces no problem with customs clearance and shipping the products without delay. Resultantly, the buyer receives their products quicker and sellers are paid sooner.
How to find Top HS Code for your shipment?
You can find relevant Harmonized System codes for your shipment using the Free Trade Agreement Portal directed by the Department of Foreign Affairs and Trade (DFAT).
If you are placing the relevant top HS Code on your goods, it means you are paying the reasonable cost of duty. You’ll be well aware of the suspension of duty on your goods and if any preferential duties charges may be implemented on the products.
China has a free trade agreement with different countries, and using the relevant Harmonized System Code will help to reach specific preferential duties according to these agreements.
Who provides the Harmonized System code to the consignee?
The consignee has the responsibility of finding the relevant top HS Code for the country of the buyer or importer. In some cases, the shipper also determines.
The Harmonized System Code for export, but this is not considered relevant for the custom entry on importing the goods. A trustworthy custom broker such as ICE will be able to advise you about the relevant HS Code for your shipment.
While exporting, Top HS code from which country shall be considered?
While exporting the goods, the HS Code of the country of export shall be used on the export declaration.
How do Top HS Codes differ from Country to Country?
As we discussed earlier, Harmonized System Codes are used in more than 200 countries all over the world. So, changing is compulsory in top HS Code in each country to manage the products properly.
It’s a better way to consult with expert freight forwarders or customs brokers for relevant HS codes.
The first six digits of the top HS Code are usually the same in all the countries. Many countries add additional digits for making it unique.
For Example, In the USA, Harmonized Traffic Code Schedule (HTS) has ten digits code. They add four digits show the “Schedule B number”, by creating a 10-digit code.
Which Top HS Codes are exaggerated during stink bug season?
Due to the 2020 stink bug season, there are more restrictions on the shipping process especially from China to the USA.
Stink bug season affected many Harmonized System Codes. The reason is that the rules for this season are implemented to target high-risk shipments. Products affected during stink bug season are organized into three sections:
High-Risk Goods – These goods are treated very strictly during this season. These goods include:
- chemicals
- gases
- explosives
- woods
- gravity fed smokers
‘Target risk goods’ – these goods are treated normally during stink bug season. These goods include
- minerals
- fuels
- salt
- slag
- inorganic
‘Exempt goods’ – These goods are not treated, even if they belong to the ‘target risk country. These goods include:
- fresh produce
- food products
- live animals
- food for human consumption
- seeds for sowing
- registered pharmaceuticals
Top HS Codes are used to uniquely identify the products. Even if your products come from a non-risky country will not be treated. But if the manufacturing country is on the list of affected countries.
Then your goods will be thoroughly treated by the customs authorities at the port of origin and port of destination as well.
