What is HS Code?

HS Code is also known by its Vietnamese name HS Code. This is a coding system used to classify goods during the import and export process.

This system, also known as the Harmonized Commodity Description and Coding System, is internationally standardized by the World Customs Organization (WCO) to uniform naming and classification codes for more than 98%. types of goods worldwide.

Simply put, HS Code (Harmonized Commodity Description and Coding System) is a type of code used to classify goods in the List of Import-Export Goods. Customs authorities use HS Code to determine and apply appropriate import and export taxes for each item.

In addition, the government also uses HS Code to collect statistics and report on import and export flows by each detailed product group and type. Businesses can also use HS Code to determine export or import tax rates as well as policies related to goods such as product policies and risk management.

By looking up the HS Code , businesses will be able to accurately calculate the tax rate payable for their shipments and carry out related procedures effectively.

Structure of HS Code

The HS Code system is made up of 3 main parts:

• General rules: Explain how to classify goods according to HS Code.
• Section, chapter, and subgroup annotations: Provide additional information about each section, chapter, group, and subgroup.
• The list of Product Groups (4-digit code) and Product Subgroups (6-digit code) is placed immediately after the legend of each corresponding section, chapter, group and subgroup.

As follows:

Parts: The HS Code system is divided into 22 parts, each part comes with its own legend.

• Chapter: Represented by the first 2 numbers in the HS Code, a general description of the type of goods. There are a total of 97 international chapters with national chapters 98 and 99, each with detailed annotations.
• Group: Includes 2 characters after the chapter and represents the product group classification.
• Grouping: Includes 2 characters after the group and represents the detailed grouping within the group.
• Subgroup: Includes the remaining characters and is regulated by each country.

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Rules when looking up HS Code

Below are 6 rules that you need to keep in mind when looking up the HS Code of goods :

Rule 1: Chapter Notes and Identifiers

The names of sections, chapters and sub-chapters in the HS Code have no legal value when classifying goods. They simply play a role in specifying the position of the commodity in the system and cannot fully cover the products included in it. Therefore, to ensure accuracy in the classification process, we need to rely on detailed information from annotation and grouping.

Each chapter’s legend is the biggest determining factor in the classification of goods within that chapter and holds value throughout all other rules. Therefore, when looking up the HS Code, checking the section and chapter legends will help identify the specific location as well as accurately determine the applicable product code.

Rule 2: Unfinished products and compounds are in the same group

• Rule 2a determines that an unfinished product, with incomplete parts, but still retaining the properties and functions of the finished product, will be classified using the corresponding finished product code.
• Rule 2b focuses on mixtures and compounds of raw materials or substances. If the product is a mixture of materials or substances belonging to the same group, it will be classified in that group. In the case of mixtures and compounds of materials or substances belonging to different groups, this rule requires that the code of the most basic substance in the mixture be applied.

Rule 3: Goods at first glance fall into many groups

• Rule 3a establishes that when a good is described in more than one heading, priority shall be given to the heading with the most specific description.
• Rule 3b refers to the case where a good is made up of many products, each product may belong to many different groups and chapters, the classification of goods will be based on the most outstanding feature of the product set. there.
• Rule 3c applies when goods cannot be classified according to rules 3a or 3b. According to this rule, goods will be classified into the group with the last order among all groups considered for classification.

Rule 4: Classify according to goods that are most similar to them

This rule will perform a comparison between the goods that need to be classified and the goods that have been previously classified. Determining similarity between products can be based on many factors such as description, nature, characteristics and intended use of the goods. After the comparison process, the goods will be classified into the group of products to which they are most similar.

Rule 5: Containers and packaging

• Rule 5a covers boxes, bags, sacks and similar packaging, specially designed to contain specified goods or sets of goods. These types of packaging can be used for a long time, often accompany the product when sold, and will be classified with the goods they contain. However, this rule does not apply to packaging that is substantially superior to the goods it contains.
• Rule 5b determines how to classify packaging commonly used to package and contain goods, when they are imported with goods (such as plastic bags, carton boxes, etc.). However, this rule does not apply to reusable metal packaging.

Rule 6: Explain how to classify and compare correctly

The process of classifying goods into subheadings of a group must be consistent with the specific content of each subheading, comply with the subheading notes and correspond to the relevant chapter notes. When making comparisons between products belonging to different groups or subgroups, the process needs to be approached from the same level to ensure uniformity.

 

Ways to look up HS Code

Below are 2 ways to look up HS Code 2023 that you can refer to:

• Use the official website of Vietnam Customs: http://customs.gov.vn/sitepages/Tariff.aspx
• Use the international website to look up HS Code: https://www.exportgenius.in/hs-code

This is the official method and guarantees 100% accuracy. However, it is only suitable for those who have extensive experience and understanding of related information.

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