HS Code: What is it?

Harmonized Commodity Description and Coding System (HS)

The Harmonized Commodity Description and Coding System (HS) is an internationally standardized classification system used to identify traded goods. Developed by the World Customs Organization (WCO), it is adopted worldwide to classify imported and exported products consistently.

HS codes help customs authorities determine applicable duties, taxes, and regulatory requirements, ensuring smooth and transparent global trade.

What Are Harmonized System (HS) Codes?

An HS code is a globally recognized product classification number used in international shipping. It consists of a six-digit numeric code that categorizes goods based on their nature, material, and use.

By using HS codes, customs authorities across different countries can clearly identify the same product, even when languages and regulations vary. The assigned HS code also directly impacts import duties, compliance requirements, and clearance procedures.

Some countries extend the standard HS code by adding additional digits (such as 8 or 10 digits) for more detailed national classifications.

Why Are HS Codes Important for Exporters?

For exporters, accurate HS codes are essential. Correct classification helps you:

• Avoid shipment delays and penalties

• Calculate duties and taxes accurately

• Analyze import trends and demand across countries

• Identify pricing benchmarks in target markets
  

Understanding HS codes allows exporters to make informed decisions and expand international sales more confidently.

How Many HS Codes Are There?

There are approximately 5,300 HS codes in use globally. These codes are structured into:

• 99 chapters

• 21 sections

• Multiple headings and subheadings
  

Each HS code is divided into three parts:

• First two digits (HS-2): Identify the product chapter

• Next two digits (HS-4): Define the product category

• Last two digits (HS-6): Specify the exact product
  

While most countries follow the current HS-6 structure, a few may still use older versions.

Harmonized System vs. Harmonized Tariff Schedule (HTS)

The Harmonized System (HS) forms the foundation for each country’s Harmonized Tariff Schedule (HTS). The HTS determines the actual duty rates and import regulations in the destination country.

Incorrect HS classification can result in:

• Shipment seizure

• Financial penalties

• Delays at customs
  

When multiple HS codes seem applicable, it’s always wise to verify with customs authorities or a trade expert in the importing country.

Final Thoughts

Choosing the correct HS code is a critical step in international trade. Along with proper classification, exporters should also research local regulations and market opportunities to maximize growth potential.

If you’re planning to expand globally, understanding HS codes is not just helpful—it’s essential.