Importance of HS codes for imports and exports

If you are a businessman  willing to expand your business overseas or aspiring to get into import export business you should have an HS Codes which stands for Harmonized codes which is an international  system of nomenclature of all the goods and products traded in the international market.  HS Code list is an internationally followed system of merchandise classification where in all the goods and products t whose trade takes place in the international market and crosses a country and enters in another are listed along with their codes. Internationally the HS Codes comprise six digit codes but in India the HS Codes are four digits, six digit and eight digit codes. It is extensively used by governments and international bodies for internal taxation, trade policies, monitoring of controlled goods, rules of origin, freight tariffs, transport statistics, price monitoring and economic research and analysis.

The HS Code is divided into 21 sections which are divided into 96 chapters which are further sub divided into headings and subheadings. Sections and chapters describe broad categories of goods, while the headings and sub headings describe products in more detail. The Indian HS Code list also better known as ITC-HS Code (Indian tariff code-harmonized code) was adopted in India for import export operations and comprises of a eight digit code The ITC-HS Codes are divide into two schedules. Schedule 1 contains rules and regulations relating to import policies while schedule 2 describes rules and regulations relating to export policies.

Every commodity that crosses or enters most international borders must be declared to customs through these codes. Like more than 200 countries and economies, India uses these codes as a basis for its customs tariffs and for collection of international trade statistics. Over 98% merchandise in the international market is classified in the terms of HS list. Importers and exporters need to have knowledge of this

HS Code list to identify the merchandise in international market and to know the customs and tariffs applicable on all these goods. With more than 98% products classified in the list the importance of HS codes for imports and exports can not be ignored and is one of the crucial elements of cross border trade.