HS description and coding system comprises about 5,000 commodity groups; each identified by a six digit code, arranged in a legal and logical structure, which is supported by well‐defined rules/ notes1.

Customs classifications (based on HS Code) are relevant and important in a trade defence action for the reasons that investigations are conducted by using illustrative list of customs classifications under which the measures are invoked and even when measures are invoked based on a description, the customs classification is mentioned, as the customs authorities use customs classification for the purpose of collection of levies.

HS code is globally uniform at 6‐ digit, and is followed by more than 200 countries. HS Code enables following, and is therefore widely accepted. It homogenizes products; harmonizes customs and trade procedures, thereby, reducing cost in international trade; and helps in imposition and collection of taxes, trade policies, monitoring, compilation of national accounts, research and analysis

In a trade defence investigation, though HS Code/ tariff classification does not bind on the scope of product, since Govt. agencies, including Customs follow product categorization as per HS coding system, imposition and collection of duties gets facilitated, thereby saving time and cost. HS Code is referred by duty recommending and imposing authorities during and upon conclusion of any investigation. As far as trade defence actions are concerned, different HS Code does not imply that the products falling under different HS Codes are different products. A single product may fall under different tariff headings. Similarly, a tariff heading may include more than one product.

The investigating authorities globally have considered scope of product under consideration to include products which fall under a large number of different HS classifications. It is well settled principle that the scope of product under consideration alone is relevant for the purpose of trade defence actions. The HS classification is meant only for the purpose of customs convenience and to facilitate identification of the product for the purpose of collection of duties.

HS Codes are of vital significance because of their relevance in conducting a trade defence investigation and collection of levies. Even when trade defence actions are invoked based on product descriptions, the customs authorities levies taxes based on customs classification. It is therefore utmost important for the domestic industries seeking trade defence action that adequate precautions are taken in ensuring that the information provided for a trade defence action includes all imports of the product under consideration, for which exhaustive account of customs classification is highly desirable.

About Author:
Mr. Nihit Gupta
Advisor (BI & Analytics)

1 World Customs Organization