Understanding HS Codes: Definition, Usage & Importance

HS code is an international nomenclature developed by the World Customs Organisation for the classification of goods.

The HS code, also known as The Harmonised Commodity Description and Coding System, is a uniformed method of classification, comprised of about 5000 different commodity groups. Each group is identified by a unique six digit code arranged in a logical and legal structure.

HS Codes have additional numbers at the end of the code for further categorization at the national level. 

 HS Codes are used by more than 200 countries to aid Customs with the collections of international trade statistics. 98% of products which are traded internationally have HS Codes. Therefore, HS Codes help standardize how products are identified globally.

It is also used to monitor controlled goods, freight tariffs, quota controls and trade policies, and more, by government bodies and private organizations.

An example of a HS Code is 1704.90.10.00. To understand what product the code is referring to we have to break it down;

• 17 refers to Chapter 17 of Section IV of the code – Prepared foodstuffs; beverages, spirits and vinegar; tobacco and manufactured tobacco substitutes
• 04 refers to sugar confectionery (including white chocolate), not containing cocoa
• 90 refers to confections or sweetmeats ready for consumption:
• 10.00 refers to candied nuts

Therefore, 1704.90.10.00 is candied nuts.

Ensuring that your shipping documents or invoices have HS Codes is important especially if you are shipping your products to countries where they are legally required by the Customs and Tariffs department.

Using the wrong HS Code or failing to add a HS Code to your product documentation could result in customs identifying the shipment as non-compliant, misleading or a misdeclaration – all of which come with penalties.

TradeGecko’s fully customizable document suite lets you add details such HS Codes to your product related documents easily, ensuring that all your shipments are compliant with international trade regulations.