HS codes: Your ultimate guide to HS tariff codes

Whether you're a seasoned retailer or just dipping your toes into the world of international shipping, understanding the Harmonised System (HS) and its associated HS codes is a crucial piece of the puzzle.

In this blog post, we'll give you an introduction to this system, explaining how HS codes work, which countries use them, and why they matter. Plus, we'll share some tips for automating the HS code process.

Note: If you'd like to learn about the EU HS code changes, check out our guide here.

Ready to get started? Let’s dive in.

In this article

• The Harmonised System and HS codes
• How HS codes are structured
• HS codes in practice: Coffee example
• Why are HS codes important?
• Which countries use HS codes?
• Where other types of code fit in
• What happens if I use the wrong HS code?
• How to automate the HS code process
• Getting started: Using Starshipit for HS codes

The Harmonised System and HS codes

The Harmonised System (HS) is an internationally standardised system for classifying and coding products for international trade. It was developed by the World Customs Organization (WCO) and is used by customs authorities and trade organisations worldwide to facilitate the smooth flow of goods across borders.

This system uses different HS codes to classify products based on their different characteristics. Each product is assigned a unique HS code, often consisting of six digits, that provides information about the product's category, subcategory, and any specific characteristics. The first two digits represent the chapter, which broadly defines the product category, and additional digits provide more detailed information about the product.

Later on in this article, we’ll explore how different countries build on this system with their own country-specific additions. Another note: HS codes are also called HS tariff codes, or even simply “tariff codes”.

HS codes in practice: Coffee example

Let’s take a look at the HS code for coffee:

The first two digits of the HS code for coffee represent the chapter code, which is 09. This chapter covers "Coffee, tea, mate and spices." In this case, it specifically relates to coffee.

The middle two digits are known as the heading number, and for coffee, it is typically 09 as well. This indicates the specific heading within Chapter 09. In this context, it signifies "Coffee, whether or not roasted or decaffeinated."

The final two digits of the HS code provide even more detailed information. For coffee, these numbers can vary depending on factors like the form of the coffee (whether it’s roasted, decaffeinated etc.) and other specifics. For instance, 0901 might represent "Coffee, not roasted, not decaffeinated," while 0902 could correspond to "Coffee, roasted." Further variations can pinpoint factors like the type of coffee (e.g., Arabica or Robusta) or processing methods.

Why are HS codes important?

HS codes are an essential tool for international trade as they offer a standard classification system for all products, ensuring uniform categorisation, regardless of country. This simplifies customs procedures and ensures goods can flow smoothly across borders.

What's more, HS codes help businesses navigate different regulatory landscapes in different markets, optimise their logistics and inventory management, and reduce compliance risks.

Where other types of code fit in

HS codes are universal 6-digit codes which remain consistent across all countries. Countries have the flexibility to expand these with additional digits where they require more specific tariff policies, such as...

A commodity code (also called a tariff code) is a similar system used by EU and UK customs to describe goods being imported. Commodity codes “build” off HS codes, as the first six digits are the item’s HS code. The final four digits are different.

This same system applies to TARIC codes, HTS codes and others.

What happens if I use the wrong HS code?

Using the wrong HS code can have consequences, depending on several factors, including the severity of the error and the regulations in your country.

One of the most immediate consequences is that you may end up paying incorrect import duties, taxes, and fees. If the HS code you use results in a lower duty rate than what should apply, you may be underpaying customs duties, which can lead to fines and penalties.

You could also see delays in the customs clearance process. Customs authorities may question the classification, request additional documentation, or even perform inspections, all of which can lead to delays in the release of your goods.

How to automate the HS code process

If you’re shipping products overseas, you’ll need to ensure that every order includes the right HS codes for the products you’re shipping (along with all the other relevant customs information).

This is where a shipping automation platform like Starshipit comes into play. This automation not only ensures accurate and compliant customs declarations but also streamlines the shipping workflow, saving time and reducing the risk of errors. Ultimately, this makes for a smoother cross-border shipping experience for both retailers and their customers.

Here’s how it works:

• In your Starshipit account, go to Settings.
• Select Product Catalogue from the left menu.
• Download the CSV template.
• Add your products and their HS codes to the CSV template.
• Click Import CSV.
• Click Select and choose the CSV file from your computer.
• Click Upload.

Check out the guide on the Starshipit Knowledge Base to learn more about the Product Catalogue.

Wrap up

And that’s it for our guide on HS codes! As you can see, they’re an indispensable tool for shipping cross-border, helping businesses and customs agencies to ensure orders get to their destination efficiently. While they can seem somewhat complicated at first, using a shipping automation platform like Starshipit ensures any complexity is handled in the background – allowing you to focus on growing your business.