2. The Harmonized Commodity
Description and Coding System, also
known as the Harmonized System (HS)
of tariffs is an internationally
standardized system of names and
numbers to classify traded products.
It came into effect in 1988 and has since
been developed and maintained by the
World Customs Organization
5. HS organization
SECTIONS
CHAPTERS
HEADINGS
SUB HEADINGS
Organized in:
Comprises 21 Sections
covering 96 chapters. Each Section consists
of Section Notes, which
define the scope of the
Chapters and headings
within the Section. It is
a grouping of a number
of Chapters which
codifies a particular
class of commodities.
Each Chapter consists
of Chapter Notes, and
the codes and
descriptions of
commodities which
are generally related
to the title of the
Chapter.
The first two digits of
the HS Code indicate
the Chapter while the
latter two digits
indicate the position of
the Heading in the
Chapter.
Each Heading can be
subdivided into further
subheadings where
necessary.
Harmonized
System (HS)
Sections
Chapter (First 2 digits of the heading)
Heading (4-digit Code)
Subheading (6-digit Code)
Country-specific breakdown
(8 or 10-digit Code)
Countries often set
their customs duties at
the 8-digit level.
Statistical suffixes are
often added to the 8-
digit tariff code for a
total of 10 digits.
COUNTRY SPECIFIC
BREAKDOWN
INTERNATIONAL LEVEL DOMESTIC LEVEL
6. HS product distribution
Goods are organized according to additional value-added features. Raw materials and
unprocessed goods can be found in the earlier chapters. Finished goods can be found in
the later chapters.
The same principle applies within each of the chapters.
7. HS code structure: International vs National level
An HS code has at least 6 digits. HS codes are globally harmonized and are
accepted by country members of the World Customs Organization.
If desired, individual countries can also use additional digits
(8 or 10) to detail the classification even further. It is
important to remember this point since HS codes at the 8
or 10 digits levels can differ from country to country.
INTERNATIONAL NATIONAL
9. Definition cont..d
Tariff means;
A system of duties imposed by the
government of a country upon
goods imported or exported.
A customs tariff shows how much
duty is payable on imported or
exported goods.
10. Classification is the act of placing goods
into the correct category.
Customs Classification refers to a
particular category in the Nomenclature
in which a product is classified or
categorized.
Definition cont..d
12. Definitions cont..d
International trade;
Exchange of goods between two or
more countries.
The Harmonised Commodity
Description and Coding System
(HS):International system for
classifying goods for trade purposes
13. HISTORICAL BACKGROUND
The Harmonized System took more
than 100 years to be designed.
Aim was to facilitate international
trade
Classification according to their
alphabetical order
14. Historical background
cont..d
In 1853-1922, an International
Statistical Nomenclature (ISN)
Approved by an International
Convention and signed by 29
countries
15. Historical background
cont..d
It consisted of 186 items, arranged in
five groups;
Live animals
Food and beverages
Raw and simply prepared materials
Manufactured goods
Gold and Silver
16. Historical background
cont..d
League of Nations Conference 1927
Draft Nomenclature produced
1931(Geneva Nomenclature)
The Nomenclature had 991
headings grouped in 86 Chapters
18. Brussels Tariff
Nomenclature
1948 - European customs study
group continued to work on Geneva
nomenclature.
1950- Draft named Brussels Tariff
Nomenclature (BTN)
1974- (BTN) renamed ‘The Customs
Cooperation Council Nomenclature’
(CCCN).
19. CCCN
CCCN had 1241 Headings
Grouped into 99 Chapters
Arranged in 21 Sections
20. CCCN
CCCN is supported by:
I. Explanatory Notes for official
interpretation
II. Alphabetical index listing
III. A compendium of classification
opinion
21. CCCN
1983 CCCN was replaced by the
Harmonized Commodity Description
and Coding System.
1988 The Harmonized System
entered into force.
22. Uses of HS
22
A common Nomenclature is used to
classify goods in the course of
International trade for
Customs duties
Statistics
23. Uses of HS cont..d
Origin of goods
Controlled goods
Trade barriers
23
24. Advantages of Harmonised
System
Uniform and Consistent
No re-classification
Standardised Customs terminology
Facilitate statistical analysis
24
31. The Harmonized Commodity
Description and Coding System, also
known as the Harmonized System (HS)
of tariffs is an internationally
standardized system of names and
numbers to classify traded products.
It came into effect in 1988 and has since
been developed and maintained by the
World Customs Organization
32. For example:
1. HS code 0205.00 means : the fifth heading
of Chapter 2, which has not been subdivided;
2. HS code 0103.10 means : the third
heading of Chapter 1, first subheading which
has not been further subdivided;
33. Countries following HS
o The system is used by more than 200 countries.
Over 98 % of the merchandise in international trade
is classified in terms of the HS.
o It comprises about 5,000 commodity groups; each
identified by a six digit code
o Afghanistan
o India
o Argentina +
o Australia +
o Austria +
34. HS coding for products
0104 Live sheep and goats.
010410 Sheep
010420 Goats
070951 Mushrooms, fresh or chilled
070952 Truffles, fresh or chilled
o 070960 Fruits of genus Capiscum or Pimenta
o 070970 Spinach, fresh or chilled
070990 Other vegetables, fresh or chilled,
o 0710 Vegetables, frozen
o 071010 Potatoes, frozen
35. Indian custom duty on HS code
01041010 description - sheep including lamb
for breeding purpose : live sheep and goats;
sheep:: sheep including lamb for breeding
purpose
01041090: description- other: live sheep and
goats
01042000: description goats live sheep and
goats
Basic duty 30%
36. Chapters and sections in HS
SECTION I: LIVE ANIMALS; ANIMAL PRODUCTS (chap
1-5)
SECTION II: VEGETABLE PRODUCTS(6-14)
SECTION III: ANIMAL OR VEGETABLE FATS AND OILS
AND THEIR CLEAVAGE PRODUCTS; PREPARED
EDIBLE FATS; ANIMAL OR VEGETABLE WAXES
SECTION IV: PREPARED FOODSTUFFS; BEVERAGES,
SPIRITS, AND VINEGAR; TOBACCO AND
MANUFACTURED TOBACCO SUBSTITUTES
37. uses
Customs tariffs
Collection of international trade statistics
Rules of origin
Collection of internal taxes
Trade negotiations
Transport tariffs and statistics
Monitoring of controlled goods (e.g.,
wastes, narcotics, chemical weapons, ozone
layer depleting substance ,endangered species
Areas of Customs controls and procedures, including
risk assessment, information technology and compliance.
38. Conclusion
HS is used by Over 200 countries
and economic blocks or Customs
unions
The Harmonised System Convention
currently has 200 contracting
parties as at 30th
March 2023.
38
