HS CODE For Import and export

What's HS Code?
HS is the Harmonised Commodity Description and Coding System. Developed in 1988 by the WCO, HS Codes are 6- to 10-digit numbers all commodities need for international shipment. The Customs Tariff Act enacts the system in Australia.

Thousands of HS Codes characterize items. All customs authorities can identify these products using the item's number.

Say, potatoes. Fresh or cold potatoes are 0701.90. But frozen potatoes are code 0710.10

Every code has its own structure.

A 6-digit ID
5k commodity groups
99 chapters in these groups
21 parts divide the chapters.
The 1974 Kyoto Convention spawned the code's structure and rationale. Here's an example:

Section II of HS Codes is "Vegetable Products"
Section II, Chapter 10 is Cereals.
Heading 06 of Chapter 10 is 'Rice'
Subheading 30 of Heading 06 is ‘Semi-milled or totally milled rice, polished or glazed'.
1006.30 is this good's HS code. That digit reflects the product's chapter, heading, and subheading to generate an international unique digit. The first two numbers of the code categorize the product. The second and third groups define the classification and product.

5300 codes are in circulation. Over 98% of internationally traded items use the HS Code system.

goods in bulk
Who utilizes HS?
Convention on the Harmonized Commodity Description and Coding System (HS Convention) members utilize HS codes frequently. Customs officials utilize HS codes to identify and apply customs duties, taxes, and regulations on exported products. HS codes are used to collect trade statistics and create levies.

Companies utilize the same technology to monitor goods, formulate and support trade policies, collect traffic and transit information, and monitor prices.

When do I utilize HS codes in shipping?
When shipping freight, use HS Codes on each line of your commercial invoice (to understand what this is, please refer to our blog on Commercial Invoices).

Using an HS Code on a commercial invoice helps smooth customs clearance. So, importers get their goods faster and exporters are paid sooner. Without the HS Code on the invoice, the importer may pay the wrong tax. You may pay interest on back-payments for erroneous classification, and your items may be seized.

Because of these changes, shippers must update their HS codes. You can:

Compare your current codes to the new ones to see if any changes apply.
If codes are removed or replaced, change them.
Wait for new codes from your import country, then add them.
Share new codes with your customs broker (or, you can simply ask your customs broker to do all of the above for you).
Where can I find the proper HS Code?
Foreign Affairs and Trade's Free Trade Agreement Portal allows HS Code searches (DFAT).

Export invoice sample
You'll also learn about tariff or anti-dumping duties. Under the Japan-Australia Economic Partnership Agreement, fresh, chilled, or frozen swine exported to Japan is subject to a duty (HS code 0203.29.023). (JAEPA).

whose responsibility is it to give the consignee the HS code?
The consignee or importer chooses the HS code for the nation of import. The shipper may define the HS Code for export, but it's not applicable for the import. ICE, a good customs broker, can recommend HS Codes for your goods.

In exporting, which HS code is used?
On the export declaration, the HS Code for the export country must be listed.

Why do HS codes vary by country?
Over 200 nations utilize the HS Code system, thus there are differences. This makes using correct digits harder. To find the right code, consult customs authorities or a freight forwarder and customs broker.

The first six digits of an HS code are universal.

Different countries may add more numbers to detail commodities without changing the first six digits. The US uses ten-digit codes in the Harmonized Tariff Code Schedule (HTS). They add a 4-digit 'Schedule B number' to create a 10-digit code.

High-risk commodities are treated by law. Explosives, pyrotechnics, matches, pyrophoric alloys, combustibles, wood, wood charcoal, coal, and cork are examples.

These commodities are not subject to required treatment. It includes ores, slag, ash, salt, sulfur, mineral fuels, and inorganic compounds.

Buy high-risk goods

Goods at Risk

'Exempt goods' aren't treated, even if they come from a 'target risk country' Among exempt goods:

Fresh vegetables, live animals, human nourishment (including beverages), sowing seeds, and medications.
It's crucial to identify commodities using HS Code. Even if you export from a non-risk country, but produce in a risky one, your goods must be treated.

How is HS managed?
The WCO administers international conventions that govern the HS. It's a Belgian intergovernmental organization that promotes modern customs systems. In its Explanatory Notes, the WCO tries to interpret the HS Code uniformly.