International trade plays a very important role in our daily life, for example, if you walk into a supermarket and can buy South American bananas, Brazilian coffee, and a bottle of South African wine, then you are experiencing the effect of international trade. So, how to classify products that are being exported and imported from a given country?
So, here comes the HS, HTS, and Schedule B codes, that allow you to classify a specific product or product type with a numbered code. It will also provide information on the Tariff Rate of Duty.
HARMONIZED SYSTEM (HS) CODES
HS Codes are used for international trade stats and customs duties & fees. They always start with 6 digits and sometimes expand in the case of a more specific product. These numbers must be included on commercial invoices.
HS code is developed and managed by the World Customs Organization. HS codes are recognized in 98% of world trade.
The HS code consists of 5,000 commodity groups covered in 99 Chapters containing 21 sections
Is identified by a six-digit code that can be broken down into three parts: Chapter, Heading, Subheading. Many governments add additional digits to the HS number to further distinguish products in certain categories. These additional digits are typically different in every country.
Is supported by well-defined rules with a legal and logical structure to achieve uniform classification all over the world.
IT’S VERY IMPORTANT TO UNDERSTAND HS CODE BECAUSE THIS CODE IS USED BY VARIOUS ORGANIZATIONS, GOVERNMENTS FOR DIFFERENT PURPOSES:
5.Monitoring of controlled goods
6.Setting of freight and transport tariffs
7.Gathering of transport and trade statistics and economic research and analysis among other users
HARMONIZED TARIFF SCHEDULE (HTS) COD
HTS codes also called HTS numbers. Is an IMPORT classification system that ONLY for U.S. uses. It was administered by the U.S. International Trade Commission (ITC).
The first 6 digits are a universally recognized HS code, and the last 4 are exclusive to the US. These codes are updated regularly, usually annually, and sometimes semi-annually.
As a result of the HTS code system, importers are immediately able to establish the appropriate tariff and duty for any given shipment. If you’re planning on importing goods into the US, you will need to find the right HTS code to fill out related paperwork.
So where would you get an HS Tariff Code? Below click the button for your easy approaching.
Example: HTS codes
Let’s look at an example for our products: Polypropylene woven bags: 6305.33.0040 HTS Code with the additional designation “Other, of polyethylene or polypropylene strip or the like, printed with three or more colors “
Global and U.S. HS Codes have four components, which are identified by the green numerals beneath the digits:
1. Chapter: In this example, 63 is the chapter.
2. Heading: In this example, 6605 is the heading. The heading dictates the specific category within any particular chapter.
3. Sub-heading: 6605.33 is the subheading. The last two digits of the international Harmonized Code are more specific, defining subcategories of products.
4. Extra digits: 6605.33.0040 is the suffix or extra digits Countries can use an additional 2-4 digits for country-specific categorizations. For example, the United States relies on 10digits codes called HTSUS numbers.
SCHEDULE B CODES
Schedule B codes are 10-digit codes used only in the EXPORT of goods from the U.S. These codes are used to track exports to see what is leaving the United States. These codes are updated annually.
Schedule B codes are maintained by the U.S. Census Bureau instead of the ITC.
As with HTS codes, the first six digits of a Schedule B code should be the same as an HS number; however, the last four digits may be different even than the HTS code.
Companies that export will typically use the appropriate Schedule B codes for their products rather than HTS codes on their export paperwork and when filing their EEI through the Automated Export System (AES). Since the Schedule B codes are a subset of the HTS codes, it’s usually quicker and easier to classify products under Schedule B than HTS.
Companies that are already classifying their products using the HTS codes for their imports may want to use HTS classification for all their products to eliminate the need to classify their products twice—once under HTS and once under Schedule B. That is perfectly acceptable, but do keep in mind that there are certain HTS codes that can’t be used for exporting.
Also, the reverse is not true. You cannot use Schedule B codes in place of HTS codes for import classifications.
Post time: Nov-22-2022