Harmonized System how to classify your products

Harmonized System: how to classify your products

The Harmonized Commodity Description and Coding System generally referred to as “Harmonized System” or simply “HS” is a multipurpose international product nomenclature developed by the World Customs Organization (WCO).

It comprises more than 5,000 commodity groups; each identified by a six-digit code, arranged in a legal and logical structure, and is supported by well-defined rules to achieve uniform classification.

Today we will be talking about what is the use of the harmonized system and how to identify your products with it.

Who administrates the Harmonized System?

The Harmonized System is administrated by the World Customs Organization (WCO) and is updated every five years. It serves as the foundation for the import and export classification systems used in the United States and by many trading partners.   

The HS assigns specific six-digit codes for varying classifications and commodities. Countries are allowed to add longer codes to the first six digits for further classification. 

Singapore uses the ASEAN Harmonized Tariff Nomenclature (AHTN) an 8-digit HS nomenclature used by all ASEAN member countries. The AHTN facilitates trade among ASEAN member countries through consistent and uniform interpretation in the classification of goods. It is based on the 6-digit Harmonized Commodity Description and Coding System Nomenclature developed by WCO.

How do these affect custom duty?

Tariffs and duties are normally imposed on imports and exports based on the classification code given to them. For your product to get a duty rate for your products being imported into a country, you need to ensure that there is a classification number assigned to your consignment that is used by the receiving country.

Without the right Harmonized System numbers, you can be sure that you aren’t missing out on preferential tariff rates under a free trade agreement.

It is also important to have the HS numbers to ensure that your business’ fulfillment team is completing their export documents.

How to classify your product?

Classification is the process of finding the most specific description in the Harmonized System. To do so, you may refer to the following steps to understand how to identify the HS in the Singapore Trade Classification, Customs & Excise Duties (STCCED).

  1. Know your product: what is it exactly? A food or beverage? A chemical? You need to have all its characteristics into consideration.
  2. Locate possible sections and chapters in the STCCED: based on your product knowledge, locate the possible Sections and Chapters that your product may be covered in.
  3. Identify 4-digit HS heading: once you have identified the Section and Chapter, read the applicable notes to ensure your product is not excluded. Identify the heading that best describes your product.
  4. Determine the 8-digit HS code: read the dashes under the heading and determine the 8-digit codes which best describes your product.

This universal language that is the harmonized system is of utmost importance, as it has contributed to improving efficiency, improving revenue management, and providing greater clarity for providers of business and related services.

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