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Quick Guide to HS Codes

HS codes stand for Harmonization System (fully called “Harmonized Commodity Description and Coding System”) codes used by customs authorities worldwide to identify and levy duties on products crossing international borders. The HS system was first introduced in 1983 by the World Customs Organization (WCO) and is now used by more than 200 countries worldwide to classify over 98% of the merchandise in international trade. The WCO HS Committee updates the HS every 5 - 6 years to account for developments in technology and changes in trade patterns.



So what are HS codes?


Simply put, HS codes are a numerical way of referring to the goods in foreign trade. They are primarily used to collect duties and taxes on goods moving across borders. HS codes, along with invoice value, dictate the ultimate price you pay for clearing your goods through import customs. HS codes are also useful for a number of other purposes, including regulating external trade, collecting trade statistics, controlling the flow of goods, economic policy making (such as free trade agreements), etc.


Structure of HS codes


HS code consists of a 6-digit number representing the product’s main category, which is harmonized worldwide. The numbers following the first 6 digits are for subcategories and may vary from country to country.

  • Section 11: Textiles and textile articles

  • Chapter: 50 - Silk

  • Heading: 5004 - Silk yarn

  • Subheading: 500400 - Silk yarn (excl. that spun from silk waste and that put up for retail sale)

  • National subheading: 50040010 - Silk yarn, unbleached, scoured or bleached (excl. that spun from silk waste and that put up for retail sale)


Why HS codes are important


Customs authorities in import countries rely on HS codes and invoice value to determine duties and taxes on your goods or apply duty exemptions. HS codes also often determine if certain categories of goods can be legally imported or exported, required permits and documentation procedures. Before moving the goods, it is important that you carefully check the applicable HS codes for your product in the import country’s customs database (remember that codes may vary from country to country). Misidentifying HS codes for your products can have negative duty / tax implications at destination - consignees may end up paying fines or higher levels of duties.


What happens if you ship without HS codes and/or invoice value


If you are importing or exporting goods, you must use HS codes on commercial invoices. When you export without identifying HS codes or invoice value for your goods in the shipping documents, you basically leave it to the import country’s customs authorities to determine the HS code and/or value of your products. Remember that this may not always work out well since mislabeling your product with a wrong code may lead to higher duties or outright rejection of entry for your shipment. Accurate classification of HS codes for your products is critical to the success of your import or export business.


HS codes in Uzbekistan


If you are exporting to Uzbekistan on DDP terms, you may use the Integrated Tariff Interactive Service of the Customs Committee of Uzbekistan to assess your duties and taxes payable in Uzbekistan. Through this government database of HS codes, you can find out about duty and tax rates as well as the procedures and documentation applicable to your shipment. However, our best advice is to employ the services of a professional customs broker, especially if you are dealing with special products that require application for permits from government authorities in Uzbekistan. This will help you take the guesswork out of the customs clearance process and avoid unintended costs and delays.


How we can help


Our foreign trade experts at Delta Global Solutions have a wealth of knowledge and local experience dealing with customs clearance in the countries within our network. When you are not sure which code to assign to your goods, consulting Delta Global Solutions customs specialists is a good idea. Working with customs brokers well versed in foreign trade practices will ensure that you will not have to worry about customs compliance and can avoid costly penalties and time lost trying to navigate all the red tape.


 

About Delta Global Solutions

At Delta Global Solutions, we connect Central Asia to the rest of the world through our freight forwarding and logistics solutions. We combine our global presence, industry expertise and world-class service to help businesses reach international markets with speed and efficiency. We offer a complete range of services in international shipping, logistics and customs clearance to meet your supply chain needs, regardless of your industry, business size or location. Being the only IATA-accredited freight forwarding company headquartered in Tashkent, Uzbekistan, we also maintain a certified quality management system that conforms to the requirements of ISO 9001:2015. Contact Us if you require assistance with shipping and/or are experiencing any logistical issues that need to be addressed.

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