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Five Critical Things You Should Know about HTS Codes

HTS codes are an aspect used globally. The World Customs Organization (WCO) is responsible for the Harmonized Tariff Description and Coding system (HTS). At least 170 countries are involved in the WCO’s HTS system. The previous six digits of the HTS code identifies all the products in international trade, and they apply for all countries that use the HTS. The last two or four digits give the duty rate and balance of trade statistical reporting suffix for the imported merchandise. 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. This is the reason why it is essential to establish that right information about your goods is reported to CBP. Moreover, do not leave it up to third parties to guess about your products and give HTS classifications for you. It is your duty as the importer to give sufficient details of the imported goods so that the customs expert can establish the suitable classifications for those goods.

You may be overpaying by using an incorrect HTS code and that is why a lot of attention is needed. 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 incorrect HTS, it leads to a wrong payment of duties whether more or less. The effect of this is seen in the CBP during revenue collection, and it may lead to them to giving fines for lack of giving the recommended and right information to CBP. It could be that you have been using wrong HTS codes, it’s never late to rectify this so that you avoid costly fines. 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. When the entry is already liquidated which tends to happens 315 day after entry, you can seek for an administrative protest up to 180 days after liquidation of the entry.

HTS codes keep changing. Worldwide, the HTS is being updated and changed to enable creativity 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 developed, it is designed with an expiration day to allow any updates to be implemented. Accordingly, constantly ensure that the codes you are using are still valid and correct. Classification of imported items is an ongoing project.

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