TaxTMI 
TaxTMI 
TaxTMI 
The Harmonized Commodity Description and Coding System, also known as the Harmonized System (HS) of tariff nomenclature 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 (WCO) (formerly the Customs Co-operation Council), an independent intergovernmental organization based in Brussels, Belgium, with over 200 member countries.
Indian Trade Clarification based on Harmonized System (ITC-HS)
ITC-HS Codes was adopted in India for import-export operations. Indian custom uses an eight digit ITC-HS Codes to suit the national trade requirements.
ITC-HS Codes Schedules
ITC-HS codes are divided into two schedules.
- ITC (HS) Import Schedule I describe the rules and guidelines related to import policies whereas Schedule II describe the rules and regulation related to export policies. Schedule I of the ITC-HS code is divided into 21 sections and each section is further divided into chapters. The total number of chapters in the schedule I is 98. The chapters are further divided into sub-heading under which different HS codes are mentioned.
- Export Policy Schedule II of the ITC-HS code contains 97 chapters giving all the details about the guidelines related to the export policies.
Governing Body of ITC (HS) Code:
DGFT is the Governing Body of ITC (HS) Code. Any changes or formulation or addition of new codes in ITC-HS Codes are carried out by DGFT (Directorate General of Foreign Trade). Commodity description, weeding out of defunct codes, addition of new codes, change of product description etc., are taken up periodically as a part of the ongoing process towards perfection.
ITC Hs Code Major 21 Sections
- Animals & Animal Products.
- Vegetable Products.
- Animal or Vegetable Fats.
- Prepared Foodstuffs.
- Mineral Products.
- Chemical Products.
- Plastics & Rubber.
- Hides & Skins.
- Wood & Wood Products.
- Wood Pulp Products.
- Textiles & Textile Articles.
- Footwear, Headgear.
- Articles of Stone, Plaster, Cement, Asbestos.
- Pearls, Precious or Semi-Precious Stones, Metals.
- Base Metals & Articles Thereof.
- Machinery & Mechanical Appliances.
- Transportation Equipment.
- Instruments – Measuring, Musical.
- Arms & Ammunition.
- Miscellaneous.
- Works of Art.
When you need a HS Code for import and export?
You’ll need it for international import and export shipping tasks such as:
- Completing shipping documents such as a shipper’s letter of instructions, a commercial invoice or a certificate of origin.
- Determining duty rates and Goods & Service Tax (GST).
- Identifying customs duty relief and exemptions.
- Qualifying for manufacturer/assembler tariff provisions.
- Qualifying for Free Trade Agreement (FTA).
- Conducting market research and trade statistics.
Why is a HS Code important?
For You | For Customs |
To correctly calculate taxes and duties on your international shipments. | To easily identify what you are shipping and apply any necessary restrictions. |
What happens if I use the incorrect HS Code?
Is the code missing or incorrect on your shipping documents? Your receiver or customer might end up paying the wrong tax, causing shipment to delay and put you at risk of:
- Excessive fines and penalties.
- Goods confiscation and potential anti-dumping/countervailing duties without prior notice.
- Missing out on free trade agreement benefits.
- An audit if customs agents identify potential warning signs in your entry filings.