A Refresher On HS Codes |

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A Refresher On HS Codes

As an importer, it is ideal that you accustom yourself to the Harmonized System (HS), so you can classify your commercial goods with ease. The Harmonized System is a system of codes that pertain to names and numbers that are commonly referred to in international trade. Canada has abided by this coding system, virtually since its inception – in the same ranks as 199 other countries and 98% of world trade. 

HS codes are defined by CBSA as follows: 

“The Customs Tariff is based on the World Customs Organization’s (WCO) Harmonized Commodity Description and Coding System (HS).”

As such, you may see why it is a good idea to familiarize yourself with the HS code system, so you can engage in global trade with ease. In essence, the term “HS compliance” is in reference to leveraging the Harmonized System correctly, i.e. classifying and declaring your goods accurately upon import or export. It is your responsibility, as an importer, to classify and declare your goods properly.

What are the codes for? 

An HS code can be interchangeably referenced to as the Customs Tariff. Essentially, the codes will correspond to what tariff you will owe upon the goods entering into Canada. You can consult CBSA’s Customs Tariff 2021 document here. In addition to helping you identify what tariff would correspond to your goods, the Harmonized System also streamlines global trade at large, as they are used nearly worldwide!

harmonized system code book

In the past, we released an article on how to actually read HS codes: 

Let’s take for example: a leather sofa

HS code: 9401.61.10.90

We highly recommend that you consult that piece here if you wish to learn how to decipher the code!

How do you classify HS codes? 

CBSA released a helpful accompanying document called “General Rules for the Interpretation of the Harmonized System”. In it, they actually give the readers tips on how to read the Customs Tariff document properly. For example: 

“Classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions.” 

Beyond that, you can also use resources created for importers, such as Canada Post’s HS Code Finder as well as the Industry Canada website: Canadian Importer Database to look up goods by keyword or HS code. The Industry Canada page is also interesting for importers for other reasons. As described by them: 

“The Canadian Importers Database provides lists of companies importing goods into Canada, by product, by city, and by country of origin.

  • Find major Canadian importers based on the products being imported.
  • Find major Canadian importers based on the city
  • Find major Canadian importers based on the country from which they are importing.” 

If you are planning to import products into Canada at all, it is critical that you get a handle on the HS coding framework. Improper classification of goods can result in penalties, fees, delay, seizures — all things that businesses are averse to! Making a misstep here can negatively impact your bottom line.

It is recommended that you team up with a customs broker or customs consultant that is well-accustomed to working with HS codes. Any customs professional in Canada that is worth partnering with is! If you’d like to ask us a question about classifying your goods or smoothing out your goods’ entry into Canada, you can contact us here.