1. What is an HS Code?

a. Definition

An HS Code (Harmonized Commodity Description and Coding System), also known in Vietnamese as Mã HS, is the standardized numerical classification code used for imported and exported goods under the Harmonized System (HS).

The HS is an internationally standardized system of names and numbers developed by the World Customs Organization (WCO) to classify more than 98% of goods traded worldwide.

b. Purpose of Using HS Codes

The primary purpose of HS Codes is to classify goods according to a unified international system, allowing all countries to use the same commodity classification language. This standardization simplifies international trade and facilitates the implementation of international trade agreements and treaties.

In simple terms, an HS Code is the classification code assigned to goods listed in the import and export commodity nomenclature.

• For customs authorities, HS Codes are used to determine the appropriate import and export duties applicable to each type of product.
• For governments, HS Codes provide the basis for collecting trade statistics and preparing reports on import and export volumes by commodity category.
• For businesses, HS Codes help determine applicable import and export tariff rates, as well as other regulations relating to the goods, such as import/export policies and risk management requirements. Once the correct HS Code is identified, businesses can accurately calculate payable taxes and prepare the necessary customs documentation.

2. Information Contained in an HS Code

Each HS Code follows the classification structure established by the World Customs Organization (WCO).

The first six digits are internationally standardized. The remaining digits (typically 2–6 additional digits) are country-specific sub-classifications determined by each national customs authority.

HS Code Structure

The Harmonized System consists of three main components:

• General Rules for the Interpretation (GRI) of the Harmonized System
• Section Notes, Chapter Notes, and Subheading Notes
• A list of Headings (4-digit codes) and Subheadings (6-digit codes) presented after the explanatory notes for each Section and Chapter.

Specifically:

Section

The Harmonized System contains 22 Sections, each accompanied by its own explanatory notes.

Chapter

The first two digits represent the Chapter, which broadly identifies the category of goods.

The international HS system currently consists of 97 Chapters. Chapters 98 and 99 are reserved for national use, and each chapter contains detailed explanatory notes.

Heading

The next two digits identify the Heading, representing a more specific product category.

Subheading

The following two digits represent the Subheading, providing a more detailed classification within the Heading.

National Subheading

The remaining digits indicate country-specific subheadings established by individual customs administrations.

Example of an HS Code Structure

Example: 65061010

From this HS Code, the following information can be identified:

• 65 – Chapter: Headgear and parts thereof.
• 06 – Heading: Other headgear, whether or not lined or trimmed.
• 10 – Subheading: Safety helmets.
• 10 – National subheading specified by the importing country.

3. How to Look Up an HS Code

a. HS Code Lookup Methods

HS Codes have a significant impact on import and export duty rates as well as product pricing. Therefore, identifying the correct HS Code helps businesses complete customs procedures more efficiently and accurately.

Below are two commonly used methods for finding the correct HS Code.

Method 1: Search Through Official Websites

Vietnam Customs Official Tariff Database

http://customs.gov.vn/sitepages/Tariff.aspx

International HS Code Lookup Website

https://www.exportgenius.in/hs-code

Searching through official databases is the most reliable and accurate method. However, it is generally more suitable for users with experience and knowledge of customs classification.

Method 2: Search Using Import and Export Tariff Schedules

Businesses may also refer to import and export tariff schedules. By entering relevant product keywords, users can search for suitable HS Codes based on product descriptions and classifications.

b. Rules for Determining HS Codes

There are six General Rules for the Interpretation (GRI) used when classifying goods under the Harmonized System. These rules should be applied sequentially, from Rule 1 through Rule 6.

Rule 1: Section Notes, Chapter Notes, and Heading Titles

The titles of Sections, Chapters, and Subchapters are provided for reference only and have no legal authority in determining classification.

The legal classification of goods must be based primarily on the wording of the headings together with the relevant Section Notes and Chapter Notes.

Therefore, before assigning an HS Code, the explanatory notes of the relevant Section and Chapter should always be consulted.

Rule 2: Incomplete Products and Mixtures

Rule 2(a): Incomplete or Unfinished Goods

Incomplete or unfinished products that already possess the essential character of the finished product are classified as the finished product.

Rule 2(b): Mixtures and Combinations

This rule applies to products consisting of mixtures or combinations of materials or substances.

• Mixtures made entirely of materials classified within the same heading are classified under that heading.
• Mixtures composed of materials classified under different headings are classified according to the material or component that gives the mixture its essential character.

Rule 3: Goods Potentially Classifiable Under Multiple Headings

Rule 3(a)

Where goods appear to be classifiable under two or more headings, the heading providing the most specific description shall be preferred over a more general description.

Rule 3(b)

Goods consisting of different materials or components that could fall under multiple headings shall be classified according to the material or component that gives the goods their essential character.

Rule 3(c)

If classification cannot be determined under Rules 3(a) or 3(b), the goods shall be classified under the heading that appears last in numerical order among those equally under consideration.

Rule 4: Classification by Similarity

Goods that cannot be classified under the previous rules shall be classified under the heading appropriate to the goods to which they are most similar.

Similarity may be determined based on factors such as product description, characteristics, nature, function, and intended use.

Rule 5: Cases and Packaging

Rule 5(a): Special Containers and Cases

Cases, bags, boxes, and similar containers specially designed or shaped to contain specific goods and suitable for long-term use are classified together with the goods they contain when sold together.

However, this rule does not apply where the container gives the whole its essential character.

Rule 5(b): Packing Materials and Packing Containers

Packing materials and packing containers normally used for packing goods are classified together with the goods when imported with them.

This rule does not apply to reusable metal containers.

Rule 6: Classification at the Subheading Level

The classification of goods within subheadings must follow the wording of the relevant subheadings and any related Subheading Notes, applying the above rules where appropriate.

When comparing different headings or subheadings, only classifications at the same hierarchical level should be compared.

Conclusion

The above information provides an overview of HS Codes and their applications in international import and export activities.

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