Top 3 Things to Know About HTS Import Codes
Every organization whose operations include the importation of foreign goods is subject to import classification. In other words, goods coming into the country have to be properly classified for both regulatory and tax purposes. Classifications are covered under the Harmonized Tariff System. Therefore, classification codes for imports are known as HTS codes.
Here at Vigilant Global Trade Services, export and import classification is one of the things we specialize in. We work alongside our clients to improve compliance with all import classification regulations. We provide each client with a dedicated account manager and support team who work together on behalf of the client.
Is your organization new to the import game? If so, how much do you know about import classification and HTS codes? We would be happy to discuss how our services can help you maintain compliance with what is a complicated area of regulation. In the meantime, here are the top three things to know about HTS codes:
1. They Are Based on International Standards
The HTS is the U.S. counterpart to the international Harmonized Commodity Description and Coding System, often referred to more simply as the Harmonized System (HS). The HS uses a standard set of numbers to classify goods.
HTS codes are based on corresponding HS codes. And in fact, the first six digits of an HTS code are the HS number for that particular category. Our system adds digits to provide a bit more detail. That detail is important to U.S. customs and taxing authorities.
As a side note, the first six digits of the Schedule B codes applied to exports are identical to HS codes. Doing things this way gives the U.S. Census Bureau the information it needs to track exports while international authorities rely on standardized codes to track goods coming into their respective countries.
2. Importers Are Ultimately Responsible
You should also know that importers are ultimately responsible for accurate import classification. We published another blog post discussing this in more detail. You might find it helpful if you are new to imports. That said, federal regulators and taxing authorities do not accept ignorance as an excuse as they expect each importer to perform their “Due Diligence”.
Your company may rely on customs brokers and other vendors to get imported products from the point of importation to your warehouse. That is all well and good. But ultimately, they are not responsible for HTS compliance. Your company is. Therefore, your company has to make a reasonable effort to make sure import classification is done correctly.
3. HTS Codes Affect Duties
Finally, understand that HTS codes have an effect on the duties your company pays. This is important for the simple fact that getting it wrong could cost you financially. Incorrect import classification could mean that your company pays too much. And if that happens, good luck getting a refund.
On the other hand, an incorrect import classification could mean your company pays too little. In such a case, you would be liable for outstanding duties. You might even have to pay additional fees and penalties, depending on the nature of the violation.
Either way you look at it, being careless about HTS codes is not worth the risk. Assigning the wrong codes could end up costing your company time and money. It could ultimately cost customers as well. You can avoid the risks by outsourcing import classification to Vigilant Global Trade Services.
Our import classification services are offered with the backing of years of experience that make us experts in the field. Not only do we know the federal regulations inside and out, but we also make a point of staying up to date. If you would like to know more, please do not hesitate to contact us.