HSN codes (Harmonized System of Nomenclature) are six-digit identification codes used to classify goods in international trade.
HSN codes serve to classify more than 98% of goods shipped worldwide. More than 200 countries currently use this classification system.
These codes provide goods and commodities with a unique classification identification to show customs authorities precisely what is shipped. This globally recognized coding system makes it easy to identify products. Additionally, applying the appropriate tariffs and taxes in the importing country is helpful.
HSN is a universal system to improve speed and efficiency when exporting and importing goods worldwide.
The importance of HSN codes in international trade
HSN codes
It is necessary to use the correct HSN for legal and commercial documents issued by Exporters and Importers. Indeed, almost all countries require these codes in commercial documents.
The six-digit code classifies an item by category and product type. This is the structure of the code: HSN800 CODE.
Understanding commercial codes may seem complex to those unfamiliar with these terminologies. To understand it easier, you can divide the six digits into three sets of two-digit combinations.
Any combination of six-digit HSN codes indicates to the customs authority the chapter, heading, and subheading of any product.
- The first two digits represent the chapter.
- The middle two digits represent the title.
- The last two digits represent the subtitle.
It is essential for companies that must operate internationally. If your company export products or receives inputs from abroad, be clear about these regulations and systems. Companies will comply with the authorities’ requirements if they have clear HSN information.
In addition to compliance with these standards, including software and technologies that allow you to automate is essential. Automating the assignment of codes and the identification of products will make the processes in your company more efficient.
