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The Importance Of Knowing And Using Harmonized Tariff Codes.

htscoderesourcesonlineguideApr 30, 2018, 1:47:58 PM
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For every goods that come in and out of a country, there needs to be some regulation and overseeing by state agencies that are involved in the customs field. This is to the advantage of the country as it stops the importation of illegal goods like contrabands and others that are not supposed to be in the country. On exports, the country ensures that every legal process is followed and that all good that leave the country are legitimate. Custom duties are also very important because they allow for the country to earn revenue.

For most countries, especially those that have a port custom duties is one of the biggest revenue generators for a company given the tax that is collected. In the collection of revenue and customs on imports and exports, the government follows a given process depending on the laws of the country. The custom authority first have to examine the cargo that is being imported or exported in order to determine the quantity, quality and actual description of the goods. All this is done in order to assign a value to the goods and determine the kind of tax that will be paid because good even of the same quantity but different descriptions and even quality cannot be taxed the same.

This process and system of identification of goods for tax imposing purposes, legality and analysis is known as tariff classification. It follows a code known as the hts code which is created by the USA body that deals in international trade. This specific system is a 10-digit code placed in every commodity. This code is very important and all importers are needed to be aware with it in their trade for them not to be in disputes with the government and custom authorities.

A different kind of system is the Schedule B code which most people use interchangeably with the harmonized tariff code but this should not be the case. While HTS is for imports, Schedule B is used for exports in order for the USA government to monitor the goods that leave the country and also calculate the amount of revenue to be received.

There is great importance in understanding the above terms if one wants to do international trade involving the United States of America because of the consequences that can arise in wrong classification of products in accordance to their right code which can even lead to one being locked out of business. Check this video about tariff code: https://www.youtube.com/watch?v=L8Rufrz-aO4.