HS Code, also known as Harmonized System Codes or Tariff Codes, are significant unique numbers that are used to determine different types of products all around the world. The HS Code has a minimum of 6 digits and can be up to 10 digits long. They are used to correctly identify and customs clear products in import and export shipments around the globe.
Why do you need to know the correct HS Code?
The clearance agent or person arranging the customs clearance will use this number to submit to customs in the country of import to confirm the rate of import duty or import tariff that is payable when importing into the country. If the wrong HS Code is used then, importers can pay a lot more in import duty, or in some cases, not pay import duty at all. Or, if the wrong HS code is used to clear goods, you can be liable for penalties and fines even after products have been customs cleared. Therefore, always give your customs clearance agent as much detail as possible about the products to import so that they can correctly clear it through customs.
How do you find out the correct HS Code for imported products?
The supplier (shipper) of goods will need to include the product HS code on their shipping documents. Note that in some cases there may be slight discrepancies between the HS Code your supplier will use and the correct HS Code in the country of import. In case you need more help classifying your products you can contact your freight forwarder or customs broker. Import duty rates vary for every country, so it is vital that you consult with a professional before you import.
Free Trade Agreements may allow you to reduce the import duties payable.
Note that if the country of export and country of import have a current Free Trade Agreement in place, the exporter can supply the importer with a Certificate of Origin that can reduce or eliminate import duty fees. Read more details in our article here..
How do you Calculate the import duties and taxes and the landed cost of imported goods?
- Find out the correct HS Code of all of the products you are wanting to import.
- Contact your freight forwarder or customs broker to confirm what import duty rate applies to your products in the country of import.
- You must completely understand your product costs + shipping costs + local port & handling charges + import duty fees + import taxes.
Need more details on how you can apply these costs, duties and taxes to understand the landed cost of your goods? Click here to learn more.