HS Code or Harmonized System code is used to define an item in the import-export business. It has globally standardized names and numbers to classify each category of items. This code is also known as the tariff code as well as it is mandatory for both global and local import-export business. There are many questions revolving in your mind right now like what is HS Code? Why it is used in the import-export business? What is the structure of this code? Go further to get answers of all these queries….
Explore the Meaning and Structure of HS Code
HS code came into effect in the year 1988 and since has been maintained by WCO that is known as the World Customs Organization. Under this system, a code is given to all the items traded locally and globally. In this harmonized system, products are mentioned in 21 sections and 99 chapters. In countries like Brazil and India, HS Code is used up to 8 digits while there are a few nations like Russia and USA in which this code is used up to 10 digits for product’s classification.
If we are talking about its structure in India, primary two digits define a “Chapter”, next two digits define the “Heading”, third two digits define the “Sub-heading”, and the last two digits define “Tariff Item Level”.
How HS Code is known in Other Countries?
Harmonized system code is known with several different names in other countries, but it’s one and the only objective is to define an item in the import-export business. So, let’s explore the names of HS code in other countries:-
HSN Codes in Brazil
This coding system is known as NCM (Nomenclatura Comum Do Mercosul) in Brazil. It is used up to 8 digits for not just selling or buying products locally, but trading products internationally as well.
HS Codes in China
HS Code in China uses up to 8 digits; however, most of the products are classified up to 10 digits also. In this country, this code is also known as the Customs Tariff Code.
In India, some people use HS code while others uses the Harmonized System of Nomenclature to pronounce this coding system. It is used up to 8 digits in the import-export business.
HS Codes in Indonesia
Indonesia uses BTKI (Buku Tarif Kepabeanan Indonesia) up to 8 digits to categorize an item in the business.
HSN Code in the United States of America
USA uses HTS (Harmonized Tariff Schedule) up to 10 digits for classifying any product in the business with better specifications.
HS Codes in Vietnam
Vietnam uses CTC (Custom Tariff Code) up to 8 digits to categorize any product in the import and export business.
Why is it Important?
As earlier mentioned, HS Code is used to classify a product in both global and local business. In the import-export movements, it is significant for the government and companies. How? Let’s find out below:-
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