x Your business specializes in import-export goods and wants to know what the hs code is?
x You need to clearly understand the role and how to look up HS codes in goods trading?
x Do you want to find a cheap, professional International Transport Company?
PROSHIP.VN with many years of experience in Transport and Logistics activities will quickly answer all the problems that Individuals and Businesses raise above so that they can understand more about the HS Code terminology and apply the code correctly, avoiding Unnecessary errors in the import/export process. Along with that, we also highlight the strengths and advantages of the cheap, safe International Freight Forwarding service by rail container. If you are in need of sending consumer or business goods for trade, you should consider coming here.
Shipping contact hotline:
Ms Tien: 0909 986 247
Ms Dung: 0939 999 247
Ms Duy: 0902 581 247
What is HS code? What is the structure?
What is hs code? HS Code is information used a lot in import and export documents. We can often see HS Code in customs declarations, CO/CQ certificates of origin, commercial invoices, etc. It can be said that HS Code is basic but most important data for businesses. Who is doing import and export goods? It directly affects taxes and prices of export/import goods. HS Code is an abbreviation for the phrase "Harmonized System Codes" - Roughly translated into Vietnamese, it means Harmonized System of Description and Coding of Goods (which we can hear when studying theory). This is a goods classification code regulated by the World Customs Organization to determine import and export tax rates, salary and bonus regulations, etc. applicable to all countries in the world.
The goal of using the HS Code is to classify goods into a standard system, with a list of codes for goods applied in all countries. This creates conditions for unifying a "common commodity language" that simplifies work for Individuals and Organizations when implementing International Trade Treaties and Agreements. Based on the HS Code, customs authorities will apply appropriate import and export taxes for each type of goods. In addition, the State also relies on HS Code to collect statistics and report on actual import and export flows through detailed commodity groups and types.
For example, when a business imports goods, if the wrong HS code is applied, when the goods arrive at the warehouse/port, open the declaration and pay taxes, the customs will say that the HS code is wrong and need to apply the HS code. Otherwise, it is necessary to check quality, declare conformity and pay additional taxes. Because there is no advance preparation to prepare documents, businesses will take more time to complete procedures, have to pay taxes many times and wait for taxes, incurring warehousing and delaying delivery schedules.
The main structure of an HS code includes:
- Part: HS Code has up to 22 parts, each part will have a separate legend;
- Chapter: is defined as the first 2 numbers in the code, a general description of the type of goods. In total, according to regulations, there are 97 international chapters. Chapters 98 and 99 are for countries, each with detailed explanations;
- Group: Includes 2 characters after the chapter, representing the product group classification;
- Grouping: Includes 2 characters after the group, showing detailed grouping under the group;
- Sub-grouping: the last characters represent the sub-grouping specified by each country.
Take an example of an HS Code: 65061010. When looking at the HS code, we can get the following information:
- 65: Show Chapter – Hats, other headgear and their parts;
- 06: Classification – Hats, other headgear, whether or not lined or decorated;
- 10: Showing Subgroup – Safety helmets;
- 10: Shows Country Subgroups.
What role does the HS Code play? How to look up?
PROSHIP will continue to share about the role, importance as well as the most accurate way to look up HS codes after helping you clarify the concept of what the term HS code is. As follows:
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The role of Hs code
Hs code helps buyers and sellers unify the name, properties, effects and classification of products through a series of numbers, helping to eliminate language barriers and avoid unfortunate mistakes in international trade. . Hs code is the basis for Government agencies such as customs, taxes, and chambers of commerce to clearly identify the type of item and the two parties buying and selling are trading, thereby:
- Manage and monitor the list of allowed, restricted and prohibited imports and exports;
- Import and export tax management;
- Establish import and export quotas for certain products;
- Collect data and statistics on domestic trade and import and export;
- Facilitate the negotiation, signing and implementation of commercial agreements.
The importance of classifying HS Code
* For Businesses:
- HS Code ensures Enterprise compliance with domestic and international laws;
- Reduce the risk of costly sanctions;
- Helps businesses avoid delays in delivery and difficulties in inspection work;
- Help businesses enjoy many benefits from FTAs.
* For the Government:
- Enforce domestic laws and international treaties;
- Is a tool to identify types of imported and exported goods to collect taxes and other obligations;
- Support for analysis of micro and macro strategies, international trade negotiations.
Instructions on how to look up HS Code
Because HS codes represent so much information, the lookup process needs to be accurate and in the right order. Below are some commonly used code lookup methods today:
- Based on old documents: Is the most traditional and simple way for businesses or agencies to conduct searches. Just rely on the customs declaration and compare directly. This lookup does not take too much time because companies also have to complete customs procedures and include full product code information;
- Based on the import-export tariff schedule: This method of searching is much faster and saves time. Just download the import-export tax schedule excel file, then press Ctrl F and enter the tax code on the row;
- Based on the HS code lookup website: There are currently many websites for people to look up, but one of the most used addresses is Vietnam Customs. You just access the website, go to the Tax Schedule Lookup - Classification - HS section, then enter the order code;
- Contact your predecessors: If you feel unsure about the information you have learned, you can contact relatives or experienced businesses to make things simpler and easier.
Shipping contact hotline:
Ms Tien: 0909 986 247
Ms Dung: 0939 999 247
Ms Duy: 0902 581 247
PROSHIP shares HS Code lookup rules in Customs Procedures
Applying HS Code to goods is a basic and important step in the customs clearance process. However, applying the HS code correctly is a quite complicated and complicated process. Therefore, Proship will share with businesses the rules for looking up this HS code as follows:
Rule 1: Chapter notes and identifiers
The names of Sections, Chapters or Subchapters are given for ease of reference. Rule 1 is only a general orientation, not enough to classify goods, it is necessary to continue with the next rules.
Rule 2: Unfinished products and compounds are in the same group
* Rule 2a: Product is not complete
To apply rule 2a, an article that is incomplete or incomplete but has the basic characteristics of a product must be considered to have a basic shape according to the structure of the design, drawing, …and whether the main components of the product are available or not.
If the goods are in unassembled or disassembled form, it must be understood that to become a complete product, the goods only need simple assembly (screws, screws, nails, etc.) without having to go through any process. Other too complicated machining processes (cutting, grinding, mounding, welding, etc.) will only apply rule 2a.
Note, for "Embryos", these are products that are not ready for use, have an appearance similar to the finished goods, and are only used for the sole purpose of finishing it into a product. its own complete product. At that time, the workpiece is coded like the finished product, rule 2a does not apply.
* Rule 2b: Mixtures and compounds of raw materials or substances
This rule only applies to products that are mixtures of materials or substances. Goods made entirely of a material or substance, or partly made of that material or substance, are classified in the same group. When in a product (mixture of substances) there is an additional substance that is outside the scope of the description of that group of goods, causing loss of basic characteristics of the goods, rule 3 must be considered.
Rule 3: Goods at first glance can be classified into many groups
* Rule 3a: Be most specific
Must consider and identify the group of goods with the most specific, characteristic and detailed description. When goods are described in more than one heading, the heading with the most specific description will have priority over the headings with a general description.
* Rule 3b: Basic characteristics
Mixed goods are made up of many materials or products, each material or product can belong to many different groups and chapters. If they cannot be classified according to Rule 3(a), we proceed to classify them. classified according to the constituent materials or products that give them their basic characteristics. At this point, rule 3b will apply. In short, rule 3b applies when:
- Goods are mixtures of many materials and substances that cannot be classified under rule 2(b).
- Goods are composed of many different materials;
- Goods are composed of many different components;
- Goods are packaged in sets for retail sale
* Rule 3c: Last order
Where Rule 3a or 3b is not applicable, the goods shall be classified according to Rule 3c. According to this Rule, goods will be classified into the group with the last order among the groups considered for classification.
Rule 4: Classify according to goods that are most similar to them
If goods cannot be classified according to the above Rules, they shall be classified in the group most appropriate to the type of goods they are most similar to.
Rule 5: Containers and packaging
Applicable to goods are packaging, boxes, bags with special structures, suitable for containing goods and accompanying goods when sold. Rule 5 is divided into 2 types:
* Rule 5a: Boxes, bags, sacks and similar containers
Rule 5a usually refers to boxes, bags, sacks and similar containers, suitable or specially shaped for containing defined goods or sets of goods that can be used over a long period of time and are included with the product when sold, such as camera cases, camcorders, musical instrument cases, gun holsters, tool cases Paintings, jewelry boxes, etc. However, this rule does not apply to boxes, bags, sacks and packaging that have fundamental properties that are more outstanding than the goods they contain.
* Rule 5b: Ordinary packaging Packaging
commonly used to package and contain goods, imported at the same time as goods (plastic bags, carton boxes, etc.) is classified into Rule 5b. Note, this rule does not apply to reusable metal packaging.
Rule 6: How to classify and compare
The classification of goods into subheadings of a group must be consistent with the content of each subheading, and consistent with the subheading notes and relevant chapter notes. When comparing a product in different groups or subgroups, the comparison must be at the same level.
>>See more: What is NVOCC?
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In short, HS code is a popular and common term in the Logistics and Import-Export Industry. Hopefully, through the above knowledge sharing article, we have helped readers know what the hs code is , the important role of the hs code as well as the most accurate way to look up and apply this code. From here, if any enterprise or business unit needs to transport goods by container on the international intermodal route and wants to save costs, time, effort, and increase efficiency and safety, they can contact us. Contact Proship Joint Stock Company at the Hotline below to get solution advice and the best quick service quote.
Shipping contact hotline:
Ms Tien: 0909 986 247
Ms Dung: 0939 999 247
Ms Duy: 0902 581 247
