How to Choose the Right HS Code for Your Export Product

Accurate product classification is not only a technical necessity in global trade but also an essential requirement imposed by commercial law. All products that are transported across borders should be categorised and assigned to the HS code.. Therefore, when you want to export goods out of India, you must ensure that you put the right HS code on your product.

The duty rates, compliance, documentation, and delivery- everything depends on the correct classification of an HS code. If written incorrectly, it can lead to delays in shipment, penalties, and even bans. This blog will provide you with an insight into how to accurately select an HS code that suits your product and facilitates customs clearance.

Understanding the Role of HS Codes in Exporting

Before you learn how to assign an HS code, let’s look at its importance- 

What Is an HS Code?

An HS code (Harmonised System code) is a worldwide recognised classification number for customs purposes, ranging from 6 to 10 digits. The first six digits are accepted globally, but the following may vary by country. The customs authorities base their determination upon these codes – 

• Duty rates
• Trade statistics
• Documentation requirements
• Restrictions or controls

Assigning the correct HS code ensures that your product is handled at the border properly.

Why HS Code Accuracy Matters

An exporter choosing the wrong HS code becomes subject to duty miscalculations, non-compliance with trade policies, and denial of shipment clearance. It also impacts your eligibility for export benefits under trade agreements.

Steps to Choose the Right HS Code

Here is a simplified process for exporters to assign the correct classification to their products.

Step 1 – Understand Your Product in Detail

Describe the product with key details such as –

• What is it made of
• How is it used
• In what form is it: raw, finished, semi-finished
• Any special features or modifications

The more precise your definition of the product, the easier it will be to assign the relevant classification.

Step 2 – Refer to the Indian Tariff Schedule

Access the Indian Trade Classification or ITC-HS Code list published by the Directorate General of Foreign Trade. This is India’s official source of HS codes, which allows you to search codes by category or keyword and shortlist the matching codes.

Step 3 – Use the WCO and ICEGATE Portals

Any product for export must have an assigned HS code for exports and imports. The World Customs Organization (WCO) provides a world list of HS codes. On the other hand, Indian exporters can validate the codes and check out past entries through the ICEGATE portal (Indian Customs EDI Gateway). Both platforms provide chapter headings and notes to narrow your search.

Tools and Support for Accurate HS Code Classification

Sometimes product classification can be a little difficult, especially if your item is hybrid or multipurpose.

Consult the DGFT or Export Councils

When you are unclear about classification, the best instance is to check the Export Promotion Council or the office of the Director General of Foreign Trade. They will interpret confusing categories for you or give you clarification.

Use Online HS Code Lookup Tools

There are plenty of websites and government portals that offer HS codes lookup tools. These are great when you want to check your product in different destination markets.

Most exporters use these platforms – 

• DGFT’s ITC-HS Lookup
• Export Genius
• ImportYeti
• Customs Info Database

All these assist you in ensuring that you are applying the appropriate HS codes that align with the customs requirements of the destination country.

Common Errors to Avoid

An incorrect HS code can have huge consequences for you– financially, legally, and even worse: damage to your reputation.

Relying Solely on Similar Products

Two similar-looking products may fall under different codes depending on materials, use, or modifications. Never assume that a product’s appearance alone determines its classification.

Ignoring Product Composition

Many HS codes differentiate between products based on what they are made of—plastic, metal, textile, etc. If your description is vague, customs authorities may assign a different code, potentially leading to penalties.

Copying Old Shipment Codes Blindly

Do not reuse HS codes from past shipments without checking if regulations have changed. HS code lists are updated periodically; what worked last year may no longer be valid.

Country-Specific Considerations

Although the first six characters of an HS code are universal, the rest of the digits may be utilised to further perform item classification by the countries themselves.

Know Your Target Market’s Classification System

When exporting from India to a foreign country, ensure that the HS code chosen matches the importing country’s customs system. A product may get placed under different sub-categories in Europe, the US, or the Middle East. 

Check Tariff Rates and Import Rules

Once you have the HS code shortlisted, check the import tariff imposed by the destination country. They sometimes also apply product restrictions, licenses, or safety certifications depending on the code.

Being a step ahead would better prepare you for any international trading issues, including getting stuck at customs.

HS Codes and Export Incentives

HS classification correctly also matters when seeking governmental aid and trade benefits.

Access to Export Schemes

Export schemes like RoDTEP, MEIS (before), and Advance Authorisation are all reliant on correct classification for products. An incorrect declaration of your HS code might cause loss of eligibility for such schemes or might implicate you in compliance issues.

Better Trade Visibility and Data

Using correct codes improves your visibility in international trade databases, helping you benchmark pricing, find competitors, and reach new buyers looking for specific categories.

Accurate Classification is the Key to Compliance

Selecting the correct HS code is necessary to ensure that your export process aligns with compliance and protects your shipment from delays. With every passing year, the export rules are getting stringent, and automation is increasing, so it is best to give importance to the correct classification of products so that your products can move abroad smoothly.

Credlix gives you the freedom to move your products smoothly across international borders. We help you with trade finance so that your goods reach their destination without any delays.