What is the Difference Between HS Code Classification and Schedule B

What is the Difference Between HS Code Classification and
Schedule B?

International trade is a place where terms like HS codes and Schedule B codes are often
used in day-to-day conversation. In simple terms, these codes represent a way to classify
products that are traded internationally.

While there’s nothing wrong with mentioning the terms interchangeably, it is essential
to know the difference between them. You’re at the right place if you are into the
shipping business and want to learn more about both codes.
What Is A Harmonized System Code?
An HS code classification makes use of a six-digit standard called a subheading. This
helps classify the internationally traded products. As some traders opt to call them, HS

What is the Difference Between HS Code Classification and
Schedule B?

codes, or HS numbers, are also used by customs officials to allot duties and taxes based
on their classification. Features of the HS code:

1. Who Governs HS Code?

World Customs Organization is the administrative body of the HS code classification.
HS codes administered by WCO find recognition 98% of the world trade.

2. What’s The Structure Of An HS Code?

HS codes comprise six digits and are easily recognized due to their universal format.
Several foreign governments add a few extra digits to these HS numbers to further
demarcate them into other distinct categories.

The additional digits may be prefixed or suffixed depending upon the choice of the
foreign government. You can always convert the HS to HTS code by using a widely
available conversion guide.

3. Can The HS Code Be Useful In Other Areas?

HS codes are not limited to classification, as the HS codes are also used in international
import-export documentation and commercial invoices, given the product falls into the
classified categories. If you are now interested in knowing what is HTS, you can start by
referring to the export guide of the World Trade Organization.

What is the Difference Between HS Code Classification and
Schedule B?

What Is The Schedule B Code?

We all have heard about HTS codes, and the Schedule B codes are nothing but their 10-
digit subset for exporters. If we go by the origin, then Schedule B codes are primarily
used by the USA government for statistical purposes. But it is also used to supervise the
country’s exports. Features of the Schedule B code:

1. Who Governs The Schedule B Code?

ITC is not the maintenance body of Schedule B codes; they are administered by the US
Census Bureau instead.

2. What’s The Structure Of The Schedule B Code?

The first six digits of a schedule B code should match their HS number for the HTS
codes, but the last four may be different from the HTS codes. This is where an HS to
HTS code guide comes in handy.

3. Where Are Schedule B Codes Used?

The export companies generally opt for the Schedule B codes for their products and not
the HTS codes while filing their paperwork. It is not because they don’t know what is
HTS. It is because they find Schedule B codes much less complicated and easy to
implement.

What is the Difference Between HS Code Classification and
Schedule B?

Where Does HTS Code Fit Into This?

Generally, it is much easier to classify products under the Schedule B codes rather than
HTS codes. On the other hand, companies that already use HTS codes to classify their
products may continue to do so as they will not need to re-classify them under Schedule
B.

However, specific HTS codes cannot be used for exporting, and the reverse is also true,
i.e., one cannot replace the HTS codes with Schedule B codes for classifying the import
products.

Why Should You Understand HS Code & Schedule B Code?

Exporters who have been in the business for a long time agree that knowing these codes
is very important. Any negligence can invite huge problems and losses, as any
misclassification amounts to fraud. In the export industry, many stakeholders are
involved, so it is essential to follow the laid down protocol to avoid fines and penalties.

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