The HS follows logical organization of products that are traded globally based on component materials or economic activities. For instance, there are distinct sections for live animals/animal products, plant products, prepared foodstuffs, mineral products, chemical products, and textiles. There are 21 sections in the HS, which include a total of 97 chapters. There are around 5,000 headings and subheadings under the different chapters.
HS codes follow a six-digit hierarchical structure. The first two digits identify the chapter. The third and digits represent the group within the chapter. The last two digits help narrow down to a more relevant category. Incidentally, an HS code does not offer information about the section to which it belongs.
In the United States, the HTSA is the primary source of classifying goods imported into the country as well as determining applicable custom duties. In some instances, it may also be used instead of Schedule B codes when exporting commodities out of the U.S.
The HTSA system classifies commodities based on their names, their intended use, as well as the material used in their making. An HTSA code comes with 10 digits, of which the first six make up for the HS code. There are more than 17,000 unique HTSA codes currently in use.
The World Customs Organization (WCO) is responsible for publishing, maintaining, and revising HS codes. The United States International Trade Commission is responsible for publishing and maintaining HTSA codes. However, Customs and Border Protection (CBP) is responsible for administration of HTSA at the country’s ports of entry. It also provides ruling and advice surrounding matters that involve import classification.
The HS system was launched in 1998. Now, it has over 200 members. The United States enacted the Harmonized Tariff Schedule (HTS) in 1988, and it came into effect in January 1989. The HTSA has undergone several revisions, and revision 14 was released in 2018.
Take these HTSA codes into consideration:
In the first six numbers that make the HS code, the first two numbers (06) identify the chapter (Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage).
The second set of two numbers (03) represents the group (Cut flowers and flower buds of a kind suitable for bouquets or for ornamental purposes, fresh, dried, dyed, bleached, impregnated, or otherwise prepared).
The third set of two numbers (11) makes room for further specification (Fresh roses).
Moving beyond the six-digit HS code, the next four digits help identify the U.S. subheading of the same code and collect trade data. The examples in question represent: