HS Codes V2 (Also known as Tariff Codes)

Part 2 of Harmonized System Codes.

Over here in Malaysia, there is a single document that declares the varied items in your shipment a HS code or tariff code for that matter. In this document, you will see details about your forwarding agent’s name, your own company’s name and address, and 1 big bar code in the middle. Right below the bar code, there’s a line titled: No. Kod Tarif Pertama. The numbers below are the tariff code that represent your shipment.

The numbers are split into 3 sections, the first section containing 4 digits, the second containing 2 digits, and the final section containing 4 more digits.

It looks something like this: 4602.90.9000 (this tariff code applies for rattan products).

Further below there will be a line stating the description of the items.

It should look something like this:

HS Code Form

Sometimes, you will be asked for the customs code. What’s a custom code? Actually a custom code is similar to the tariff code, the only difference is that it is applied to each individual item being shipped. That way each item is being taxed differently. (Due to some items having more duty than others).

In a Malaysian customs import declaration form such as below, the circled part will be the customs code.

Customs Import Declaration Form

Custom Form 1

Why are these codes so important? Simple, its simply because of the import duty and sales tax. Importers especially, wish to avoid huge duties imposed by the customs department so that it is cheaper to buy from abroad. Items are being taxed at an average of 20%, so if your goods is worth $10000 USD, that’s an extra $2000 USD you need to fork out. Don’t ever forget there’s a thing called Sales Tax or in some countries, VAT. This is a compulsory percentage tax charged. If you add the import duty and sales tax (usually at 10%) together, that raise the price by 30%.

If you buy from certain countries however, you don’t have to pay any single cent. Countries that have relations in duty-free groups such as ASEAN, or MALAYSIA-CHINA bilateral ties allows for 0% import duty. Though for the sales tax you probably still need to pay. How to proceed with such stuff? You need to utilize a special document called Form D or it’s general name: Certificate of Origin – with duty exemption feature. (But that’s for another post)

To check what’s the tariff code for your goods, check out this link.