What are HS Codes? (Also known as Tariff Codes or Harmonized System Codes)
HS Codes are very important unique numbers that are used to identify different types of products all around the world. They are used to correctly identify and customs clear products in import/export shipments all over the world. 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.
The HS Code is also known as a Tariff Code or a Harmonized System Code. The HS Code has a minimum of 6 digits and can be up to 10 digits long. It’s important to give your customs clearance agent as much detail as possible about the products to import so that they can correctly clear it through customs. 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. If the wrong HS code is used to clear goods you can be liable for penalties and fines even after goods have been customs cleared.
How do you find out the correct HS Code or Tariff 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 discrepencies between the HS Code your supplier will use and the correct HS Code in the country of import. If you need more help regarding classifying your products you can contact your freight forwarder or customs broker. Import duty rates vary for every country so it’s important that you consult with a professional before you import. You can search this great link to find your HS Code:
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.
How do you Calculate the import duties and taxes and the landed cost of imported goods?
1 – Find out the correct HS Code of all of the products you are wanting to import
2 – Contact your freight forwarder or customs broker to confirm what import duty rate applies to your products in the country of import.
3 – You must completely understand your product costs + shipping costs + local port & handling charges + import duty fees + import taxes.