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Understanding HTS Codes

HTS codes are an aspect used globally. The World Customs Organization (WCO) preserves the Harmonized Tariff Description and Coding system (HTS). More than 170 countries participate in the WCO’s HTS system. The initial six digits of the HTS code identifies all the items in international trade and they are similar for every country that uses the HTS. The two or four suffix digits provide the duty rate and balance of trade statistical reporting suffix for the imported goods. If you are an importer, you are in charge of establishing the right HTS classification to be used on your import entries and ISF security filings. Due to this, it is critical to determine that accurate information about your products is reported to CBP. Additionally, you shouldn’t rely on third parties to guess about your goods and provide HTS classifications on your behalf. It is your responsibility as the importer to provide sufficient detailed information of the imported goods so that the customs professional can know the right classifications for those items.

You may have paid more by using an incorrect HTS code. The HTS is primarily a classification tool to uniformly identify products and the other secondary function is that it is a tariff system on imported goods. When you use the wrong HTS, it results in an incorrect payment of duties whether a little or a lot. Such an error arises in the CBP during revenue collection, and it can lead to issuing of penalties for not providing the correct and accurate information to CBP. The HTS codes you were utilizing might not be the right ones, you still have time to amend this so that you eliminate extravagant penalties. If you realize that you have been using inappropriate HTS codes and been paying high or low, you have two ways to rectify it. You can file for a Post-Entry Amendment (PEA) to pay any extra owed duties or to request a refund for overpayments. If the entry has been liquidated which usually happens 315 day after entry, you can file an administrative protest up to 180 days after liquidation of the entry.

HTS codes are not static. Universally, the HTS is always updated and changed to allow for innovation and technology. Moreover, governments are exploring new revenue sources and they are considering balancing their trade with other countries. In the U.S when an HTS code is created, it has a date when it will expire to enable any updates to be implemented. Accordingly, constantly ensure that the codes you are using are still valid and correct. Classification of imported goods is continuous.

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