What’s an HS Code or HTS Code in Global Trade?

An HS code or HTS code plays a vital role in Global Trade. In this blog, we explain these terms which are often used in global trade and vital for the customs clearance at the supplier’s or buyer’s end.

What is an HS code and HTS code?

The Harmonized System(HS) Code or a Harmonized Tariff Schedule(HTS) Code are a part of a worldwide standardized system of accurately identifying goods in international trade. The HS codes were developed by the World Customs Organization (WCO) which defined it as a “multipurpose international product nomenclature”.

These are unique digits that are used to classify and determine different types of products being traded, globally. The HS codes generally contain a minimum of 2 digits and can be up to 10 digits long. Custom departments and governments use HS codes for determining tariffs and clearance of products at the customs, across the world.

The HS Code system is universally recognized by more than 200 countries. According to a report by World Customs Organization, over 98% of the merchandise in international trade is classified in terms of the HS. It is important to note that HS codes are used for globally traded goods only and not relevant for services.

Difference between HS Code and HTS code?

In casual conversations, importers and exporters tend to use this term interchangeably. While it is not wrong to use it interchangeably in casual conversations, it is essential to understand the difference to classify the traded product/s correctly. Read on to know the exact definitions of each term and when it is appropriate to use each of them:

HS Codes

The Harmonized System (HS) code is a code with two to six digits. It is a universal standard tool to classify products. It is used in most global trade documentation and invoices.

HTS Codes

The Harmonized Tariff Schedule (HTS) code is a code with 7–10 digits. The HTS codes are used to classify products specific to the US. It’s very essential for all US importers to know and understand HTS codes well as the duties or tariffs are based on this classification. An HTS code is similar to an HS code for the first six digits but the last four digits differ depending upon the different categorizations/classifications.

The 4 digit number that is added to the 6-digit HS code is known as the Schedule B number. It classifies the products further and is used and administered by the US Department of Commerce, Census Bureau, Foreign Trade Division.

If you are a US importer, you can view classifications for free here.

To know about the structure of an HS code, how to determine it, and its importance in global trade, click here.

This blog was originally published on Trademo.com/blog.

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We are a SaaS company, building products to help businesses globally start, grow and manage their cross-border trade seamlessly.

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Trademo

Trademo

We are a SaaS company, building products to help businesses globally start, grow and manage their cross-border trade seamlessly.

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