The HS and HTS codes are standardized codes used by customs agencies worldwide to classify commodities for the purpose of charging customs duties, taxes, and other trade-related fees for import and export purposes.
Importers will need to assign a code that is appropriate for their products and, because there are so many options, it may be possible to reduce the duties, taxes, and fees, you need to pay by selecting one over another.
The HS codes (Harmonized System) are an international system of nomenclature for commodities and products, devised by the World Customs Organization (WCO), that provides a consistent classification system for items between countries. The HS system consists of 21 sections, which are further subdivided into 99 chapters, and each chapter contains multiple HS codes for various sorts of commodities.
For example, the HS code for roasted coffee with caffeine is 0901210000 and it has duty to pay of 6%.
HS codes can be looked up on this site (this is a UK site, but the HS codes are typically valid globally aside from in the USA).
The HTS (Harmonized Tariff Schedule), on the other hand, is a country’s application of the HS system and is utilized by its customs authority to collect customs duties and other trade-related expenses. The HTS system is primarily used in the USA and has produced its own HTS codes based on the HS codes. The HTS codes give an exhaustive list of all items that are subject to customs duties and taxes, including the HS code, product description, and applicable duty rate.
Another example is organic black tea to be imported into the USA would have the HTS code 0902.30.0015 (and you can also see that it is duty-free).
HTS codes can be found on the official government website here.
Using HS and HTS codes correctly
Importers and exporters must categorize their items appropriately according to the HS and HTS codes in order to pay the correct amount of customs duties, taxes, and other expenses. If an improper HS or HTS code is applied, the products may be detained at the border, and the importer or exporter may incur penalties, fines, or additional taxes.
In conclusion, HS and HTS codes are crucial for international trade because they provide a consistent method for classifying commodities for customs purposes and are used to evaluate import and export customs duties, taxes, and other trade-related expenses. It is essential for importers and exporters to utilize the correct HS and HTS codes to prevent trade-related complications and penalties.
For a more comprehensive explanation of the difference between the codes and how to select yours, please read this blog post: HS vs HTS Codes: How to Find the Right Code for your Product? (incl. Links to Official Sources)
We are not lawyers. What we discussed above is based only on our understanding of legal requirements and regulations. Sofeast does not present this information as a basis for you to make decisions, and we do not accept any liability if you do so.