The Procurement Glossary » Harmonized System (HS) Code

Harmonized System (HS) Code

Compliance & Risk

Also known as: HS Code, Tariff Code

Definition

A standardised international numbering system for classifying traded products, used to determine customs duties.

Explanation

The HS code assigns each product a globally recognised classification that drives duty rates, trade statistics and regulatory treatment. Correct classification is a compliance requirement and a legitimate lever to manage duty cost.

Example

Assigning the correct HS code ensures the right duty is paid and avoids customs penalties.

Related terms

• Customs Duty — A tax levied by a government on goods imported across its borders.
• Landed Cost — The total cost of a product delivered to the buyer's door, including price, freight, insurance, duties and handling.
• Import — Bringing goods into a country from abroad, subject to customs, duties and regulatory requirements.
• Regulatory Compliance — Adherence to the laws and regulations that apply to buying, importing and operating in a given market.

Frequently Asked Questions

What is Harmonized System (HS) Code?

A standardised international numbering system for classifying traded products, used to determine customs duties. The HS code assigns each product a globally recognised classification that drives duty rates, trade statistics and regulatory treatment. Correct classification is a compliance requirement and a legitimate lever to manage duty cost.

Can you give an example of Harmonized System (HS) Code?

Assigning the correct HS code ensures the right duty is paid and avoids customs penalties.

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