WHAT IS HS CODE?

The Harmonized Commodity Description and Coding System, HS code for short is a common standard worldwide for describing the type of commodity that is shipped.

Every commodity that enters or crosses most international borders has to be declared to customs using this code. Thus the code helps to standardize and identify the cargo in the same manner whether it is in Singapore, Rotterdam or in any country in the world.

Developed and managed by the world customs organization, the HS code consists of :

5000 commodity groups covered in 99 chapters containing 21 sections;

Is identified by six digit code 

Is arranged in a legal and logical structure and 

Is supported by well defined rules to achieve uniform classification all over the world.

HOW IS HS CODE USED?

The system is used by many economies in the world as the basis for their customs tariffs and for the collection of international trade statistics. Over 98% of the merchandise in international trade is defined in the terms of the HS CODE. 

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.

CHALLENGES IN CLASSIFICATION FOR COMPANIES: 

The acceptance and versatility of the HS code as a universal economic language and code for goods may vary between countries and customs authorities. Improper usage of HS code could result an improper tariff being applied by customs which can increase the cost of imports exponentially to the customers.

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 mis- declaration, 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 ADVISE ON THE CORRECT HS CODE TO USE