Many of you have seen terminologies – HS Code, HTS Code, and Schedule B Number across trade documentation and correspondences.
What does this HS Code mean, who uses it and what is it used for..??
HS Code refers to Harmonized Commodity Description and Coding System also referred to as “Harmonized System” or simply “HS”, a multipurpose international product nomenclature developed by the World Customs Organization (WCO)..
It is a common standard worldwide for classifying the type of commodity. Every commodity that enters or crosses most international borders has to be declared to customs using an HS code. This helps in standardizing the commodity codes worldwide.
The system is used by more than 200 countries and economies as a basis for their Customs tariffs and for the collection of international trade statistics. Over 98 % of the merchandise in international trade is classified in terms of the HS.
The HS contributes to the harmonization of Customs and trade procedures, and the non-documentary trade data interchange in connection with such procedures, thus reducing the costs related to international trade.
How to read the HS/HTS Code and Schedule B Number
The more than 5,000 commodity groups are identified by a 6-digit HS Code, arranged in a legal and logical structure supported by well-defined rules to achieve uniform classification.
While the HS by WCO assigns specific 6-digit codes for varying classifications and commodities, countries are allowed to add longer codes to the first 6 digits for further classification for their internal purposes.
For example, the United States apart from terming the HS codes as HTS codes – (Harmonized Tariff Schedule of the United States), also use a 10-digit code to classify their products for export, known as a Schedule B number.
A Schedule B number is made up of the first 6 digits of the standard HS code and the balance 4 digits are additional digits for the commodity.
The HS Code follows a structure that is pretty simple to use/understand as below
6904.10.0090
69 = Chapter 69 under Section 13 which covers Ceramic products
6904 = Heading which covers Ceramic building bricks, flooring blocks, support or filler tiles, and the like
6904.10 = Sub Heading specifically referring to Ceramic Building Bricks specifically
6904.10.0090 = Additional code used in US exports where 0090 refers to “hollow bricks“
The last 4 digits could change depending on the type within the Chapter/Heading and Subheading of the commodity.
For example, 6904.10.0015 refers to “Solid Bricks“.
HS Nomenclature 2022
The HS2022 which came into force on the 1st of January 2022 is the seventh edition of the Harmonized System (HS) nomenclature accepted by all Contracting Parties to the Harmonized System Convention.
The HS2022 edition has made some major changes to the Harmonized System with a total of 351 sets of amendments covering a wide range of goods moving across borders.
