HTS Codes and HS Codes.
An HTS code is a harmonized tariff schedule developed by the World Customs Organization and are codes which are used to define and classify imported and exported goods. The Harmonized Tariff Schedule uses the names, uses, and materials a good is produced from to classify goods after which a ten-digit classification code number is assigned to the good. Since the Harmonized Tariff Schedule codes are specific only to the United States, the United States International Trade Commission is responsible for administering them. Harmonized Tariff Schedule codes classifications is very important since commodity duties are based upon them. A Harmonized Tariff Schedule code is very similar to the HS codes for the first six digits but then the last four digits differ. Neither HS codes nor schedule B codes are similar to the HS codes.
A Harmonized System code is a six-digit standard for classifying globally traded products. The six digit standard is known as the subheading. HS codes are used all over the world by customs authorities to identify duty and tax rates for different and specific types of products. Harmonized system codes are administered by the World Customs Organisation and are recognized in the majority of world trade. Many governments recognize HS codes since they are a universal classification method. In order to further distinguish the products to different categories governments around the world may put additional numbers to the HS codes. These additional numbers are different for different countries. Harmonized System codes are used for the reference of commercial invoices and export and import documents.
The harmonized system is organized into 21 sections, subdivided into 96 chapters which are also subdivided to headings and subheadings. The section and chapter parts show broad categories while the headings and subheadings further describe the commodities to narrower categories. Technological complexity is used to categorize commodities in the sections and chapters. Natural goods are described in the early sections while technological complex goods are described in later sections. For example animal products and vegetable products are described in earlier sections while machinery is described much later. In the chapters commodities are also arranged according to their degree of manufacture.
Schedule b code is a ten digit subset of HTS codes for American exporters. The United States uses schedule B codes to monitor their exports by using statistics from schedule B codes. These codes are usually maintained by the United States Census Bureau. By using schedule b codes classification of goods is much faster and much easier as compared to using Harmonized Tariff Schedule codes.