• What Is HS Code?


    What Is HS Code?
    If you is an essential elements for an importer. Because its extremely need for calculating the tax on the imported good or commodity.  
    Its known as the Harmonized System (HS) of tariff nomenclature is an internationally standardized system of names and numbers to classify traded products. It came into effect in 1988 and has since been developed and maintained by the World Customs Organization (WCO) (formerly the Customs Co-operation Council), an independent intergovernmental organization based in Brussels, Belgium, with over 200 member countries.

    Structure
    Under the HS Convention, the contracting parties are obliged to base their tariff schedules on the HS nomenclature, although parties set their own rates of duty. The HS is organized into 21 sections and 96 chapters, accompanied with general rules of interpretation and explanatory notes. First, the system assigns goods to sections, and then proceeds toassign these goods to their specific chapter, heading, and subheading, in that order, as necessary. The HS therefore assigns up to a total of 8 digits at the tariff-rate (legal) level. Two extra digits may also be assigned as statistical reporting numbers for a total of 10 digits to be listed on entries.
    To ensure harmonization, the contracting parties must employ at least 4- and 6-digit provisions, international rules and notes, but are free to adopt additional subcategories and notes. Chapter 77 is reserved for future international use only. Chapters 98 and 99 are reserved for national use. Chapter 98 comprises special classification provisions, and chapter 99 contains temporary modifications pursuant to a parties' national directive or legislation.

    Why need HS Code??

    HS code need for calculating the customs duty on a commodity. Every product have an specific HS Code. Such as COCOA BUTTER, FAT AND OIL total tax incidence is 37.07 and its HS code is 1804.00.00 . 

    How calculating tax by HS Code??

    Calculating tax by HS code is so easy work. For example COCOA BUTTER, FAT AND OIL total tax incidence is 37.07%. CD is 10% It means Customs duty is 10% on parches value. RD is 0%, it means Regulatory duty is 0% on the total value of your goods. SD is 0%, it means Supplementary duty is 0%. VAT is 15%. it means Value added tax is 15% on total value. AIT is 5% on the total value. it means Advance income tax is 5%. and the ATV is 4%. it means advance trade VAT is 4%. So the total TAX is 37.07%.

    Where you find HS code?
    There have so many website from where you can find the HS code. Just write your commodity name and search HS code. 

    Is it same all time?
    Yes its same all the time. But tax is changeable as your country. Every year it can be change. Change is depends on the country expectation, regulation and so on. 

    After all you need a good C&F agents who can be your good teacher for understanding HS code. Because customs is always a hazardous place.