Do we know what is HS code and how it is beneficial for international trading? Firstly we have to be known of what is HS code is?. Let us understand with an example, Let’s we have to buy a laptop from any international market. But different things have different names all around the world, so it is difficult for the people to understand about the actual requirement of the product. As a solution WTO, ICC & ITC have united and created a system, which is called HS code and fully formed as Harmonized System code. These codes have 97 chapters in the world and India has 98. Different commodities have been categorized in different codes so they can be easily searched by buyers and exporters.
In international trading, we may listen to the term named HS code. It controls exporting and importing products by using specific codes and plays the role of seamless business trade across the world. There are a variety of products that can be exporting and importing in trading, such as fresh products and industrial products. There are different specifications of industrial products and there are countless varieties of instruments based upon their specifications. One cannot easily understand the type of product only by checking the invoice or only by checking the product name on the packaging list. But by using the HS code for custom declaration, one can be easily understood or identify the product immediately without any confusion.
Let’s understand with the example –
A wheel of a passenger car is classified with six digits number code. The HS code has a clear rule on how you classify the product. Therefore, if you have the HS Code information of 8708.70 then the customs will be able to identify that it is a wheel of the car.
Rules and Standards for HS code
- Harmonized system codes have been administered by the world customs organization.
- The HS convention is contracted to more than 150 countries, hence it is a universal rule.
- The HSN code is being reviewed every five years for product classifications and deceleration of any update. It might consist of the specification added or a new product added to the list.
- This code is internationally harmonized and here the product type is shown as the six-digit number while exporting and importing.
When HS codes are utilized:
Hs code are utilized for customers’ declaration of export and import for both countries. Six digits for this system classification are universal. However, different duty rates may take place in exporting countries and importing countries depending on the understanding of the classification of the products. The duty rate may get differ as expect if import side custom specialists apply a different HS code for importing.
So, while using any export-import agency, there is always a custom specialized and qualified and will select the relevant exporting and importing goods. They will check the product name on the shipping note and then select the valid HSN code for the same.
When exporting the products to a company that has an EPA agreement, then one can receive a reduced custom tariff if you can provide a certificate of origin for the product. If one is exporting with a certificate of origin and a wrong HSN Code is applied, then the incorrect tariff rate could be applied and one may not receive the special rate. A certificate of origin should be submitted by the exporter of the Japan Chamber of Commerce and Industry. Before submitting the documentation, one should identify the 6 digits Harmonized system code and tariff rate for the importing country.
So we have completely understood the importance of the knowledge of HS Code while exporting and importing the goods. To find these harmonized system codes please visit our site https://www.seair.co.in/hs-codes.aspx to find the complete details in a manner according to the decided chapters.
We ate Seair Exim Solutions are present on the internet with solutions of many queries of different companies who are looking forward to expanding business by making the footprints in the foreign market hub. We provide the complete details of the exporting and importing companies in India who have great contacts with the international markets and can export or import your raw materials without any risk.
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