20 frequently asked questions about HS Codes

1. Is the use of HS codes international?

HS codes are used almost globally to identify goods that are imported and exported from countries. All countries that are members of the WCO use the Harmonized Commodity Description and Coding System to collect information about the products being moved across their borders. Countries usually do some level of work to adopt the WCO nomenclature for local purposes. This can be done by adding digits to the first 6 digits of the WCO nomenclature. However, the descriptions are harmonized to the first 6 digits.

2. Can HS codes be changed?

Yes they can. WCO typically releases updates to the commodity description and coding system once every 5 years. Countries then take 1 to 2 years to adopt them to the local context.

3. What does HS code stand for?

HS stands for Harmonized System.

4. How are HS codes classified?

The process of determining a HS code for a commodity is referred to as HS classification. WCO has published 6 rules that must be used when doing HS classification. The goods news is that most products can be classified using the first rule.

5. How does the HS code work?

The HS code is declared on import and export declarations that are made to Customs authorities. Based on the code declared, Customs will levy taxes and duties. Customs will also identify licensing requirements (if any).

6. What HS code should I use?

You need to follow the rules of classification in order to determine the correct HS code for a product. If you are not familiar with the classification rules, you can hire a professional to classify products for you.

7. What is the HS code in Malaysia?

Malaysia has an AHTN and non AHTN version of HS codes. The AHTN version is used for trade between ASEAN countries.

8. Why is the HS code important?

Customs will refer to the HS code to understand what you are importing and exporting from a country. Based on the HS code, import duties and taxes will be determined. Wrong HS codes can mean wrong duties paid.

9. What is a ruling?

Traders can apply to Customs for a HS classification ruling. This is a process where traders can submit information to Customs for Customs to decide the correct HS code for a product. Such a service is no available in all countries.

10. Is there a HS code look up that I can use?

None of the HS code look up tools online are 100% reliable. It is always best to classify a product using the classification rules. You can also refer to publicly available tariff rulings for some guidance.

11. What happens if Customs thinks my HS code is wrong?

Customs may choose to issue a notice of offence or they may reject the import or export permit application. If Customs does a post clearance audit and finds wrong HS codes were used for clearance, they can start proceedings to claim back unpaid duties with penalties.

12. Can HS codes be different in different countries?

In theory HS codes are supposed to be harmonized at the first 6 digits. However the rules of classification are often subjective to interpretation. Hence, differences of opinion may lie between countries.

13. What else are HS codes required or used for?

HS codes are used to determine duties and other taxes. HS codes can also be used to determine licensing requirements. They can also be used for the purpose of trade statistics collection.

14. HS, HTS, HSN, tariff code – what is the difference?

These terms refer to the same thing. HS stands for Harmonized System Code, HTS stands for Harmonized Tariff Schedule code, HSN stands for Harmonized System Nomenclature code. Tariff code refers to the same as well and this term is used because the code is used to determine the tariffs payable on import and export.

15. ECCN vs. HS code – what is the difference?

These are not referring to the same code. The ECCN stands for Export Control Classification Number. This is a number used in US Export controls to determine license requirements for exports. It is not possible to corelate the 2 numbering conventions.

16. How many digits does a HS code have?

This depends on the country’s nomenclature. A few examples are cited below:

  • Singapore has 8 digits
  • Thailand has 11 digits
  • Indonesia has 8 digits
  • Australia has 10 digits
  • Philippines has 9 digits
  • Vietnam has 8 digits
  • India has 8 digits
  • China has 13 digits

17. Are HS codes important for Free Trade Agreements?

Absolutely. HS codes play a big part in assessing whether a product is qualified for FTA benefits.

18. Are HS codes and commodity codes the same?

In most cases they are, but when it comes to the term commodity code, different industry practices in different countries may be referring to different numbering convention so it is best to clarify this point and not make assumptions.

19. Must I show the HS code on my commercial invoice?

Globally, there are no standardized regulation on where the HS code needs to be indicated on shipping documents. However, some countries have specific requirements. For example, India and US require the HS codes to be shown on invoices.

20. Are HS code lists available?

Sometimes, countries may publish alphabetical indexes listing various products and their related HS code. However, importers and exporters should always validate this data before blindly using information found online.

Leave a Reply