Tariff codes 101
Imported and exported goods have to be classified. The tariff code is the international system used to classify traded goods. (It can be likened to the Dewey Decimal system libraries use to classify books). Nearly every product involved in global trade has been allocated its own unique tariff code. This code is the same anywhere in the world, which enables customs departments from different countries to communicate with each other. These codes are often also referred to as harmonised system (HS) numbers.
A complete tariff code has a minimum of six digits, and a maximum of 10. A code with less than six digits is considered a partial code, and it represents a broad category of products. The more digits a code contains, the more specific the product that it identifies. In the tabular example from the customs tariff book below, you can see how the digits (on the left) increase as the product becomes more specific in its definition.
Once you have found the correct code in your country’s specific tariff book, you will also be able to see the import duty tax the product attracts next to the code. A copy of the South African tariff reference book is available here.
| Heading/Subheading | Article description |
|---|---|
| 06.03 | Cut flowers and flower buds of a kind suitable for bouquets or for ornamental purposes, fresh,dried, dyed, bleached, impregnated or otherwise prepared. |
| 06 03.1 | – Fresh: |
| 06 03.11 | – – Roses |
It is very important to use the correct tariff code, as the buyer’s duty tax is linked to this. Using the wrong code could have a big impact on the final cost of the goods. Additionally, using an incorrect code could result in clearing delays at customs, and/or hefty penalties payable to customs.
If you are an importer, the easiest way to obtain the correct code is to ask your supplier. The supplier is required to indicate the correct tariff or HS code on all their export documents, and will have made the effort to obtain the correct code.
If you are a first-time exporter, or simply want to double-check your code, you can arrange for a professional tariff classification. You can also use this Tariff Lookup guide to view a comprehensive list of codes and their corresponding product descriptions.
Be wary of assigning the code yourself, as the rules around accurate determination can be tricky. If you make a mistake, you may be fined at customs, and have to pay additional duty tax which you did not budget for. Therefore, we always advise having your tariff or HS code checked by a professional, as they can also defend their determination at customs based on the tariff rules.
Take the time to make sure your tariff or HS code is correct – as the saying goes, prevention is always better than cure.
About the author
Tracy Venter
Tracy studied at Stellenbosch University and gained her initial experience in imports and exports through working for industry. After starting her own import business, and helping some friends do the same, she realised there was a need for reliable customs registration services. As a result, in 2011, Import Export License was born. Since then thousands of importers and exporters have been helped to obtain their import export licences, permits, specialised customs registrations and connect with Import Export License consultants for advice on importing, exporting, and other customs related matters.
