Are you confused about the Difference between HSN code and HTS code? Don't worry. You're not alone. Many people are unsure about the two codes and what they mean. However, it's important to know the difference between them, as they are used for different purposes. Read on to find out more about HSN code vs HTS code.
You’ll see the HTS and HSN codes on the packaging of any imported goods you might buy in your local store. But what does the HTS code mean? Likewise, what does the HSN code mean? The two acronyms help customs officials and merchants determine how to classify an item on import, so it’s important to understand them before shopping. Keep reading to learn more about these two acronyms and why understanding them can help you make better decisions when shopping at home or abroad.
HSN code and HTS code are both harmonised tariff schedules. Which one you choose to use depends on whether your item is listed in the document or not. If you find your item listed in the document, you should use the HTS code. If not, then you should use the HSN code. Keep reading to learn more about the Difference between HS and HTS code and when you should use each type of code.
What Is An HSN Code?
An HSN code is a U.S. Customs and Border Protection classification that identifies if a product is eligible for preferential treatment under NAFTA. This classification determines if the item can be shipped into Canada or Mexico without paying duty fees.
HSN codes are assigned to imported goods by inspecting their Harmonised Tariff Schedule (HTS) Code, which classifies imports based on their type, weight and value. There are different levels of HSN codes – first level, second level and third level.
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First-level code comprises four numbers, each ranging from 1-4 digits in length, with the first digit denoting whether the good falls within Chapter 1-27 of the General Rules of Interpretation. Second-level codes have five digits, with each number ranging from 0-9. Finally, third-level codes have six digits in length.
What Is An HTS Code?
An HTS Code is a Harmonised Tariff Code, a set of codes that the World Customs Organisation issues. Fourteen types of HTS Codes are used to classify goods based on their purpose or use. The first two digits in an HTS Code specify whether it is for trade, manufacturing, distribution or consumption. The last four digits indicate how the product should be classified under a particular category. For example, 850110 means the product can be classified as Yarn and Manufactured from Yarn.
When Should You Use These Codes?
The difference between these two codes is that while they both identify the country of origin of a product, they have different uses. The HS (Harmonised System) Code is used by customs authorities to determine if a product is subject to tariffs or quotas when imported into a specific country.
The HTS (Harmonised Tariff Schedule) Code identifies which chapter in the Harmonised Tariff Schedule applies to a specific product. For example, an HTS code starting with 85- stands for clothing and apparel articles. A good rule of thumb is that if you’re trying to determine what tariff rates apply to your products, you should use an HS Code and for anything else, you should use an HTS Code.
Function Of HTS Codes And HSN Codes
HSN codes and HTS codes are both used for creating barcodes. The difference is that HSN codes are used for high-speed data entry, while humans and machines can read HTS codes. Data encoded in an HSN code is sent to a machine at a speed of about 100,000 characters per second.
You can often see these on container labels at ports or shipping containers. On the other hand, humans can only read HTS codes, but they encode information into about four times as many characters as an HSN code does. As a result, they’re primarily used in retail situations where customers scan the barcode with their smartphone to purchase goods and send feedback electronically via Twitter, Facebook, etcetera.
Common Mistakes When Using These Codes
The Difference between HS codes and HTS codes is that HS Codes are used for customs duty rates while HTS Codes are used for tariff classification. Common mistakes when using these codes include:
- Not understanding the Difference between HS codes and HTS codes.
- Not knowing which code to use.
- Choosing the wrong one by mistake.
HS Codes are used for customs duty rates, while HTS Codes are used for tariff classification. It’s important to know which code you should use before proceeding with your order because if you don’t, you may end up paying more than what was needed due to unexpected duties and taxes.
Difference Between HSN Codes And HTS Codes
The terms HSN Codes and HTS Codes are often used interchangeably, but there is a difference. While HSN codes are primarily for identifying items on an online retailer’s website, HTS codes primarily identify items in a wholesale catalogue. Therefore, an item with both an HSN Code and HTS Code can be sold at different levels depending on which retailer it was assigned.
A typical example would be department stores where only certain store sections carry clothes with an HSN Code while other sections sell clothes with only an HPS Code. Other examples include books and electronics, where you may see an HSN Code rates for the eBook but not for the physical book or vice versa.
Another difference between the two codes is that when something has a price, an HSS Code typically does not have one since they are more geared towards selling in bulk or going directly to retailers who already know what they’re looking to buy. Finally, many countries use different classification systems than we do in the U.S., so if you want to sell internationally, make sure to use HTS Codes from their respective country rather than American-specific ones.
Conclusion
While it may be confusing to work out which code to use, there are some key points to remember. First, the HSN codes are for home sales, while HTS codes are for retail sales. It is important to know that one can use both codes on each other as long as they’re not sold simultaneously. So if you have a home sale and want to sell something retail, you can use an HTS code if it doesn’t come with your items in an order.
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