Classifying Your Goods for Import and Getting the Rate of Duty Right
25 Oct

Classifying Your Goods for Import and Getting the Rate of Duty Right

We are back with another crucial aspect of the importing process – Merchandise Classification. In this post, we will dive into the importance of ensuring your imports are classified correctly and establishing the rate of duty.

Understanding product classification is a necessary aspect of being a successful importer. Importers may be quick to rush through classification and commit some errors, which can lead to a lot of hassle later.

This may include audits, extended delays in shipping, and substantial financial penalties. Therefore, it is best if you spend a little more time understanding the classification process since it plays a massive role in making your importing business a success.

The Harmonized System (HS) Codes are commonly used as a standardized numerical method of classifying traded products. It is used by customs authorities globally as a means to identify products when assessing duties, calculating taxes, and gathering analytics and statistics. The United States implements 10-digit product classification codes for products imported and exported out of the country.

The first 6 digits are harmonized between all the countries using the system. In the United System, the last 4 numbers are identified as either the Harmonized Tariff Schedule (HTS) or the Schedule B.

There are also 6 universal General Rules of Interpretation, and one U.S. specific rule for classification. These rules are important because they create a hierarchy of classification that is implemented globally by the World Trade Organization.

Import classification is not just important to preserve the integrity of the importing process. In fact, the right classification of the merchandise to be imported also serves as a means to determine the rate of duty for the imports.

Once the classification number or HS code is determined for your import, you can look up the corresponding duty rate. Different classification categories are assigned different rates of duty, so it is important to undergo the classification process as efficiently as possible. An error in the classification can lead to incorrect duty rates. Non-compliance can mean increased inspections, fines, and other administrative penalties.

There are definite rules and guidelines for classification, so it is crucial you are well-versed with them before classifying any product. Here are a few basics:

  1. – Know your product(s): We know you think this goes without saying, but it is VERY important you fully understand your product and its details to be able to classify it correctly.
  2. – Ensure the internal controls over classifications are written and codified.
  3. – Maintain a database of classification that is regularly updated. Keep in mind that the Harmonized System is updated every 5 years.
  4. – When in doubt, never hesitate to request rulings through the US Customers and Border Protection. The CBP offers classification assistance that can be conveniently requested through an online process. P.S. Here’s an amazing resource that might come in handy!
  5. – Consult with outside experts such as customs brokers, consultants and freight forwarding companies like IZZI Logistics.

At IZZI Logistics, we pay special attention to the classification of your goods and duty rates, thus taking care of one of the most important yet labor-intensive steps of the import process.

With a solid background in logistics and in-depth knowledge of the internal workings, we help you tick all the right boxes and make the entire importing process more than just seamless. Our experts work hand in hand with you to get your imports right.

If all this information has left you feeling frazzled, feel free to reach out at so we can effortlessly navigate through all the nitty gritty together.

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