An Overview of HTS Codes
HTS codes are an aspect used globally. The World Customs Organization (WCO) is responsible for the Harmonized Tariff Description and Coding system (HTS). More than 170 countries participate in the WCO’s HTS system. The previous six digits of the HTS code identifies all the products in international trade, and they apply for all countries that use the HTS. The two or four suffix digits provide the duty rate and balance of trade statistical reporting suffix for the imported goods. If you are an importer, you are in charge of establishing the right HTS classification to be used on your import entries and ISF security filings. This is the reason why it is essential to establish that right information about your goods is reported to CBP. Additionally, you shouldn’t rely on third parties to guess about your goods and provide HTS classifications on your behalf. It is your responsibility as the importer to provide sufficient detailed information of the imported goods so that the customs professional can know the right classifications for those items.
Maybe you overpaid by using the wrong HTS code. The HTS is primarily a classification tool to uniformly identify products and the other secondary function is that it is a tariff system on imported goods. When you use the incorrect HTS, it leads to a wrong payment of duties whether more or less. The consequence of this arises in the CBP during revenue collection and may cause them to issue penalties for failure to give the right information and accurate information to CBP. Maybe you have been using incorrect HTS codes, it is not too late to correct this so that you avoid expensive penalties. When you realize that you have been using incorrect HTS codes and been paying more or less, you have two choices for correcting this matter. You can file for a Post-Entry Amendment (PEA) to pay any extra owed duties or to request a refund for overpayments. If the entry was already liquidated which normally occurs 315 day after entry, you can file an administrative protest up to 180 days after liquidation of the entry.
HTS codes keep changing. Worldwide, the HTS is being updated and changed to enable creativity and technology. Moreover, governments are exploring new revenue sources and they are considering balancing their trade with other countries. In the U.S when an HTS code is developed, it is designed with an expiration day to allow any updates to be implemented. As per this, always confirm that the codes you use are the right ones. Classification of imported items is an ongoing project.