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How Do I Determine My Product’s HS Code?

What is an HS code?

The Harmonized System (HS) is an international classification system of 6-digit codes used by virtually every economy in the world to categorize physical goods. HS codes are used throughout the trade process and were developed by the World Customs Organization (WCO). Each country has its own tariff schedule based on HS codes, with tariff codes harmonized at the HS 6-digit level and national tariff codes with 7 or more digits.

Why do I need an HS code? 

HS codes are legally required for trade and they are used on documentation throughout the process (see guide on Trade Documents). These codes are used by national authorities to apply tariffs; determine rules of origin (see guide on Rules of Origin); generate trade statistics; and monitor controlled goods. 

Knowing your correct HS code can help you avoid non-compliance penalties, border delays, or seizure of goods and denial of import privileges. The correct HS code can also help you know if your product is eligible for a duty reduction or elimination under a preferential tariff agreement (See guide on Regional Trade Agreements and Preferential Trade Arrangements). 

What is the structure of an HS code

There are approximately 5,300 different 6-digit HS codes, each describing a specific article or group of similar articles. These HS codes are classified into 21 different sections with 99 different chapters. For example, “Oranges” are categorized in Section 2 (Vegetable products) This product belongs to Chapter 08 for “Edible fruit and nuts; peel of citrus fruit or melons.” Within each chapter are the headings. Heading 0805 is for “Citrus fruit, fresh or dried.” The most detailed level of the HS code is the subheading or the six-digit code. The subheading code for “Oranges” is 080510. Thus, the first 2 digits of each subheading code refer to the chapter, the next two digits within the chapter refer to the heading, and the last two digits within the heading refer to the subheading. The subheading is the most detailed level of uniform classification within the HS code. However, each importing economy can add more digits to the standard HS 6-digit code to further differentiate products classified within the same subheading. For example, fresh oranges can be assigned a different code from dried oranges with national codes, i.e., 08051010 and 08051090, respectively.

What are the different types of tariffs and how do I know the amount of duty for an imported product? 

Different types of tariffs you may encounter include:

  1. Ad valorem tariffs: These are the most common duties and are calculated as a percent of the price of the good. The price of the good can either be determined as CIF (Cost, Insurance, Freight), which means it includes the invoice value of the good plus all other charges paid for insurance and transportation, or FOB (Free on board), meaning only the cost of the good (typically the invoice value) without additional charges is included.
  2. Specific tariffs: These are calculated based on the quantity of an import, for example weight in kilograms of meat or pair of shoes.
  3. Mixed tariffs: These are a combination of both specific tariffs and ad valorem tariffs, with one being applied depending on whether a higher or lesser duty is preferred. 
  4. Compound tariffs: These are a combination of both specific tariffs and ad valorem tariffs and take into consideration both the value and quantity of the imported product in assessing the tariff to be paid.
  5. Tariff-rate quotas: These allow a pre-determined quantity of a product to be imported at lower import duty rates (in-quota duty). Once the quota is met, all subsequently imported goods are charged at a higher rate. 

For more details on different types of tariffs, please see the World Bank’s WITS information on Forms of Import Tariffs or the World Trade Organization’s Glossary of the Tariff Analysis Online (https://tao.wto.org).

Once the appropriate HS product code is determined, the corresponding duty can be obtained from online tariff portals of the importing economy or other web market access portals, including those published by multilateral agencies (see Tariffs and Taxes at the border).

Where can I learn more?

The Global Trade Helpdesk provides an HS product finder that can help you identify your HS code. Additionally, some customs authorities may issue advance rulings for the classification of goods designating the appropriate HS code.