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International Trade Administration has changed tremendously over the past century. That is, in part, due to the dynamics of the import-export relations in the modern world and additions that have improved the process.
One such great addition is the inclusion of a global product classification system known as Harmonised System (HS) code. It has effectively changed the face of modern import-export as we know it. Let’s look at what HS code means.
What Are HS Codes?
In brief, Harmonize System (HS) code is a standardized numeral method of sorting and labelling traded goods. Today, custom offices too, identify certain items, their taxation amount, and miscellaneous information using the data coded using Harmonised Systems.
HS Codes are updated and administered by World Custom Organisations (WCO) over the course of five years. The system is accepted and issued by the United Nations Statistical Commission for hassle-free trading all over.
It is the central database of the entire foundation of the export and import classification system. HS code means a specifically designated six-digit code for different sets of commodities and their in-branch classification.
For a broader category, the countries have the liberty to add more numbers to the first six digits. The first two digits in the HS code for shipping are known as chapters and are also the broadest of all categories.
The other two digits then give further information on the specificity of that particular category, while the last two are the assigned numbers for products. It’s safe to say that HS codes hold a high value in the domain of import-export.
As of 2021, if you need to establish a proper name in export, you must know the difference between HS code and HTS codes. Let’s understand the HTS system to know why these codes play a significant role in custom export benefits.
What Are Harmonised Tariff System (HTS) Codes?
An HTS system, in simplest terms, is an expansion of the HS code for export. The difference between HS Code and HTS code is simple -HTS codes are additional numbers that countries add on top of the pre-existing six digits to categorize the time further.
For instance, the US’ ten-digit system of HS code includes the last four digits and the complete information of that same category to the minutest of details. Correct HS code for shipping like these can be found on the ITC’s portal.
Benefits Associated With Using HS Code
An export business gains much shortened and labelled data of the HS coded goods, but there is more to it. The classification using HS code for import and export has numerous added benefits. Let’s take a look at some of those:
- The United Nations Statistical Commission recognizes the system and hence makes the international compilation of trade statistics relatively easier.
- The system is also used across the globe for easy dissemination and analysis of trade statistics.
- The data reconciliation studies of worldwide trade are much simplified using the system.
- Its headings and subj]headings are classified to the minutest of details. Hence, the codes are a building block for similar product classification and sorting.
- Countries today have the power to come up with their statistical codes because of the existence of six-digits codes.
- Data conversion, too, is quite easy while keeping the statistics of the codes in mind.
Are HS Codes Necessary?
HS codes have helped so many trade giants to avoid challenges and errors during the multipurpose classification of international trade commodities. These codes have given them a unified and compound way of organizing their otherwise bulky business.
Platforms like Trademo give you simplified access to HS code for import and export in the international arena. Understanding HS codes truly can simplify most of your custom procedures and threshold data handling.