Businesses and customs officials use various classification systems to identify goods and manage tariffs, taxes, and statistics when engaging in international trade. Three of the most frequently used systems are the Harmonized System (HS) codes, the Harmonized Tariff Schedule (HTS) codes, and Schedule B numbers. Each serves a unique purpose in the logistics of global trade, and while they may appear similar, there are critical distinctions among them.
Harmonized System (HS) Codes
HS codes form the foundation of the global trade classification system. Developed and maintained by the World Customs Organization (WCO), they are used by over 200 countries worldwide for customs tariffs and international trade statistics. The HS code is a six-digit number that classifies goods in a structured way; the first two digits identify the chapter the goods belong to, the next two digits provide details about the heading within that chapter, and the last two digits signify the sub-heading under which the product is classified.
Key Features:
- Universal: Adopted globally for consistent classification.
- Structure: Six digits that break down into chapter, heading, and sub-heading.
Harmonized Tariff Schedule (HTS) Codes
The HTS codes are based on the HS system but extend the classification to ten digits, tailored by individual countries. For instance, the U.S. International Trade Commission (USITC) administers these codes in the United States. The first six digits are always the HS code, but the following four (7th to 10th) are country-specific, allowing more detailed descriptions and precise tariff applications.
Key Features:
- Country-Specific: Adapted by individual countries to meet their tariff and statistical needs.
- Detailed: Extends HS codes with additional digits for more specific classification.
Schedule B Numbers
Schedule B numbers are explicitly used for exporting goods in the United States. Administered by the U.S. Census Bureau, these codes are formatted similarly to HTS codes but serve a different purpose. Schedule B numbers are also ten-digit codes with the first six digits as the base HS code. The differences in the last four digits reflect statistical categories needed for U.S. export regulations and tracking.
Key Features:
- Export-Focused: Explicitly used for exporting goods from the U.S.
- Statistical Tool: Helps in gathering detailed export data.
Key Differences and Uses
While HS codes are used universally for identifying goods, HTS and Schedule B codes provide more specificity and are used for customs and export purposes. The primary difference lies in their application:
- HS Codes: Used globally for general product classification in international trade.
- HTS Codes: These are used to determine tariffs and detailed product classification within individual countries.
- Schedule B Numbers: Explicitly used for U.S. exports, focusing on statistical tracking and compliance with export regulations.
