HS Code and Its Importance In Customs Clearing

HS Code stands for the Harmonized System Code. It is an international standardized system of tariff nomenclature that contains the names along with a number to classify traded products. In much simpler terms, HS Code is the number and words system used to classify internationally traded products to determine the tariff of each of these products.

Importance of HS code

It is the legal responsibility of the shipper (importers & exporters) to provide the HS code when shipping goods from origin to destination. Below are 3 key reasons to provide the right HS codes when shipping items:

1. Product Documentation and Definition: Using the right HS code helps to determine the exact product that you’re importing or exporting. That way it is easier to process the correct documents to allow for a smooth shipment in and out of any country.
2. Customs Duty Payment and Other Taxes: With the right HS code, you can easily calculate your customs duty payable. That way you have enough information for projection, budgeting and planning. 
3. Regulation: It is used for regulation of internal taxes, trade policies, monitoring of controlled goods, rules of origin, freight tariffs by governments, international organizations and the private sector.

Implications Of A Wrong HS Code

Using a wrong HS code is perceived to be a wrong declaration of goods. As the importer or exporter, it is your responsibility to correctly classify and rightly declare your good. When in doubt, it is best to contact a customs brokerage professional. Some of the consequences that come with the wrong classification of goods include:

• Non-Compliance Penalties: There are usually monetary penalties that can run into millions as a result of the wrong declaration.
• Risk of Delays and Storage Charges: When goods are not cleared out because of discrepancies in the HS code, you are risking incurring storage costs till the issues are resolved.
• Seizure of Goods: Goods may be seized until customs officials can properly identify and classify your goods with the right HS codes.
• Regulatory Risks: Classifying your goods with the wrong HS codes may attract regulatory agencies intervention and can lead to an importer paying higher duties or a fine for inaccuracy.

When in doubt about your HS codes and customs clearing processes, contact Valuehandlers International. We engage in professional customs brokerage and clearing.

 Valuehandlers has efficiently cleared a large number of consignments and cargo out of the seaport and airport over the years. We understand the Customs clearing processes and will advise our clients on HS code, import duty payments and other levies to ensure compliance and save money where possible. 

Let me know your thoughts on this. Add other uses of the Harmonized System Code in the comment section.