The Harmonized Commodity Description and Coding System (Harmonized Commodity Description and Coding System) was created by the World Customs Organization (WCO) with the following main tasks:
- Create a “common language” in classifying and reading the names of imported and exported goods around the world
- Create tools for the management of import and export data by product category
- Standardize the description of goods in Customs declarations around the world
- Look up import – export tax rates according to each country’s rental policy
- The structure of Hs code is a sequence of numbers with the following characteristics
To look up the HS code for an item, the searcher must comply with the General Interpretative Rules of World Customs under the Kyoto Convention (GIR – General Interpretative Rules) including 6 specific rules.
The HS code is a commodity classification system used worldwide to identify and describe goods. HS code consists of 10 digits, divided into 21 sections, 97 chapters and 2,252 subheadings. Each HS code corresponds to a specific type of goods.
HS codes are used in many areas, including:
- International commerce
- Custom
- Tax
- Accountant
- Audit
- Statistical
HS code has an important role in:
- Facilitating international trade
- Tax collection support
- Help businesses manage goods
- Commodity statistics
In Vietnam, the HS code is specified in the Circular No. 65/2017/TT-BTC dated June 27, 2017 of the Ministry of Finance. This Circular stipulates the list of exported and imported goods of Vietnam and the corresponding HS code.
Enterprises can look up the HS code of goods at the website of the General Department of Vietnam Customs.
Who will need to look up the HS code table and how to look up the HS code effectively?
For importers and exporters, business owners with import-export activities: look up HS code to know product policies, import and export tax rates and special preferential tax rates. HS code is especially important for employees doing Customs declaration, because if looking up and applying the wrong code, it will lead to tax deviations and be sanctioned for administrative violations in the Customs field and many other troubles.
To look up HS code correctly, it is necessary to have the following basic skills:
- Understand and apply correctly, fully and accurately 6 lookup rules (GIR – General Interpretative Rules)
- Understand the nature, features, structure, effects, constitutive materials, … of the product you are looking for.
- Flexible use of tools to look up and consult information from experienced people: import and export tax schedules, detailed HS glossary, HS description websites, ..
