What is HS Code ? How to read it ?
Over 200 countries and 98% of world trade use this product nomenclature system – known as “Harmonized System” – regulated by the World Customs Organization.
Harmonized System (HS) Code
The Harmonized System (HS) code is a standardized numerical method of identifying products that is used by customs authorities around the world to assess duties, taxes, and statistics. It is a six-digit to ten digits code depending on country basis that classifies traded products for customs purposes. It is created, developed, and maintained by the World Customs Organization (WCO) and gets updated every five years.
In a HS Code , It is divided in three parts to specify the right product.
- Chapter
- Heading
- Sub-Heading
The HS code for fresh or chilled salmon is 0302.12.00.
Here, The first two digits (03) represent the chapter of the HS code that covers fish and crustaceans. The next two digits (02) represent the heading for fresh or chilled fish. The next two digits (12) represent the subheading for salmon and trout. The final two digits (00) are used for country-specific modifications.
After selecting correct HS code for the required product we can calculate the exact tariff value, duty & taxes for the government. C&F agent/broker can help the company or buyer/seller to select HS code for the product.
Importance of HS Code in Proforma Invoice(PI) for Export/Import
The Harmonized System (HS) code is an internationally recognized system that categorizes merchandise based on its type, purpose, and nature. Every product you ship needs to include an HS code so that custom authorities can easily decide which taxes, tariffs, and other additional excise duties apply to every product line.
A pro forma invoice of Foreign procurement is used by a seller to communicate to a buyer the expected costs, fees, and date of delivery for an order. This transparency can help the manufacturer avoid any miscommunication about order.
