Importance and Usage of HS codes in the Import Export Industry

 HS codes or the Harmonized system of codes are used commonly throughout the export process for goods. It is a common standard code for describing the type of commodity all across the globe. At the global level, HS code is a six-digit code system for classifying goods.

One can find out the Global Export Import Data of any country by HS code. There are thousands of HS codes and each code describes specific goods. All customs agencies are able to identify these goods easily using the codes connected with the particular commodity.

HS codes are used greatly by over 200 countries that are contracted to the convention on the harmonized commodity description and coding system. Custom authorities not only use HS codes to track what goods are being shipped but also use them to apply relevant custom duties, taxes and regulations. The government also uses HS codes to collect global trade statistics and create tariffs.

HS codes are used by private companies to monitor goods, develop and promote trade policies, collect statistics on traffic and transport as well as monitor prices.  Using HS code on commercial invoice during shipping a consignment ensures that exports make it through customs seamlessly and without any delay and hassle.

This way, importers also receive their goods faster and exporters are paid sooner. If one fails to place the HS code on the commercial invoice, this would risk the importer paying incorrect tax. One may also end up paying the incorrect tax. And one might also end up paying interest on any back-payments for incorrect classification and one’s goods might be seized by customs authorities.

Placing the right HS code on the commercial invoice will pay the correct amount of duty. HS codes are used by importers and exporters as the correct classification of goods. Also, it is legally mandatory for them to use it. If in case importer or exporter fails to use HS codes then more inspection will take place and the transportation process will get delayed. Also, they will have to pay huge penal charges and hefty fines.

HS codes are vital for importers and exporters for they help in calculating the bottom line and save both time and money.

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