What is the HS Tariff
“HS code” stands for “Harmonized System code”. The HS was created and is administered by the Brussels-based World Customs Organization (WCO). It is made up of a numerical coding system that allows the systematic definition and classification of all goods found in international trade.
Purpose of the HS
The purpose of the HS Tariff is to facilitate a uniform tariff classification of all goods, on a sound basis, in the tariffs of all signatory countries. The Harmonized Commodity Description and Coding System (HS System) has been adapted to 8 or 10 digits to allow member nations the free will to establish the Tariff used by their Customs Service for duty purposes.
The first 6 digits of an HS code indicate the same product description for all 190 member countries (which means that the international system uses 6 digits). For example, 1001.10 is “Durum wheat” in all member countries and 6401.10 is “Footwear”. Even with the similar codes used by member countries, the rates of customs duties differ from country to country.
Purpose of classifying goods
- Determine the rate of duty
- Determine the eligibility for exemptions
- Determine the qualification for approved manufacturer/assembler tariff provisions
- Calculation of any other additional taxes, e.g. excise duties