- 1 What are the HCCS Codes in Australia?
- 2 Customs Tariff Act 1995: A Brief Summary
- 3 What is the Australian Harmonised Export Commodity Classification?
- 4 Australia’s “Working Tariff” and How It Works
- 5 Australian Border Force: Tariff Classification and Customs Clearance
- 6 FAQs
HS codes are universally applied throughout the supply chain: from product classification and identification, preparation of goods for shipment, drafting of shipping documents such as commercial invoices, up to the actual customs clearance process.
Consider calling a professional customs broker if you need assistance with HS codes. EES Shipping in Perth, Western Australia, provides comprehensive logistics services such as customs brokerage, import and export, sea freight, air freight, and warehousing.
What are the HCCS Codes in Australia?
HS codes, short for Harmonised Commodity Description and Coding System (HCCS codes), is a globally recognised system for classifying traded products. Developed by the World Customs Organisation (WCO), the HS code system comprises over 5,000 commodity groups, organised using six-digit codes. Each group is assigned a unique code based on the nature of the product, making it convenient for customs authorities to identify, classify, and process goods accurately and quickly.
In Australia, the HCCS codes are commonly referred to as HS codes. This system is widely used by Australian customs brokers and traders to determine duty rates, and customs clearance requirements, and to streamline the customs process. Under the Australian system, the six-digit HS code is further subdivided into eight-digit statistical codes for more precise classification and identification of products.
Customs Tariff Act 1995: A Brief Summary
The Customs Tariff Act 1995 is the primary legislation governing HS Codes in Australia. This Act sets out the rules of customs duties applicable to imported goods based on their HS codes classification. It provides a comprehensive list of all HS codes and corresponding duty rates, outlining specific tax requirements for various import categories.
Under the Customs Tariff Act 1995, customs brokers and traders in Australia are responsible for ensuring that their goods are accurately classified and declared to the customs authorities. Failure to comply with the Act may result in penalties, seizure of goods, and delays in customs clearance.
Customs brokers play a critical role in ensuring that the import transactions adhere to the requirements of the Customs Tariff Act 1995. They are responsible for navigating the HS code system, advising clients on the correct classification of goods, preparing commercial invoices with accurate six-digit or eight-digit code representations, and liaising with customs authorities for seamless customs clearance. Their expertise in HS classification greatly contributes to the efficiency of the overall supply chain management.
The HS code system underpins the customs clearance process by providing a robust and systematic classification framework for traded goods. A thorough understanding of the HS code system, the Customs Tariff Act 1995, and other related regulations is crucial for businesses involved in international trade in Australia.
What is the Australian Harmonised Export Commodity Classification?
The Australian Harmonised Export Commodity Classification (AHECC) is a classification system used in Australia for exporting goods. It is based on the international HS code system (or HCCS) and is also used for the HS code lookup of products being exported from Australia.
The AHECC aims to simplify the customs clearance process for Australian exporters by providing a standardised and harmonious coding system. This helps customs authorities and businesses alike to identify the correct statistical item, duty rates, and other relevant information for each product that is shipped out of the country.
In addition to simplifying customs clearance, the AHECC also plays a crucial role in supply chain management and ensuring that the right products are shipped to the right destinations with the necessary tariff code and documentation.
AHECC: Relationship with other classifications
As the AHECC is an extension of the HS codes system, it incorporates the HS codes into its classification system by using the same six-digit code to identify products. Both are organised hierarchically, with several levels of classification for export commodities. However, the AHECC goes a step further by adding an additional two-digit code to the HS codes to create a more specific classification for Australian exports. The final two digits in AHECC codes are used for collecting international trade statistics.
Moreover, the AHECC is closely related to Australia’s Working Tariff. While the AHECC focuses on export classification, the Working Tariff deals with imported goods and their duty rates. Both classification systems share similar structures and coding systems, although the AHECC is more detailed when it comes to Australian export commodities.
How to use the AHECC
Using the AHECC begins with identifying the appropriate eight-digit code for the product being exported. You can use the HS code lookup tool provided by the Australian Trade and Investment Commission to find the relevant HS code. The AHECC provides details on each chapter and section to aid in the correct classification of products.
Once you have the correct code, it should be included in the commercial invoice and other necessary export documentation. Customs brokers can help businesses navigate this process by providing expert advice on the correct HS classification and AHECC code required for each export.
Incorrectly declaring AHECC codes can lead to delays in customs clearance, increased scrutiny from customs authorities, or even penalties. Therefore, it is essential that businesses pay close attention to the AHECC codes they include in their export documentation and engage the services of a reputable customs broker where necessary.
AHECC: Structure of classification
As noted above, the AHECC system consists of eight digits. The first six digits of the AHECC code are the HS code. The last two digits form the Australian-specific part of the code, providing a more precise classification unique to Australia’s export requirements.
Each level of the AHECC classification is represented by a specific element of the 8-digit code:
|1 to 2
|Chapter: These digits indicate general information about the commodity. There are currently 99 chapters in the HS.
|3 to 4
|Item heading: These digits classify the product category.
|5 to 6
|Item subheading: This provides more detailed information about the product’s characteristics.
|7 to 8
|Export statistical item: This is unique to Australian exports and is used for international trade data collection.
Australia’s “Working Tariff” and How It Works
Australia’s Working Tariff is the complete list of tariff codes and duty rates for products imported into Australia. The Working Tariff uses the same six-digit HS code as the AHECC, making it easier for businesses and customs authorities to navigate between the two classification systems. However, unlike the AHECC, the Working Tariff does not use additional digit codes, as its primary focus is on determining duty rates for imported goods rather than providing an in-depth classification for Australian imports.
To use the Working Tariff, businesses need first to identify the appropriate HS code for the product being imported. Once the product’s HS code is determined, the corresponding duty rate can be found in the Working Tariff document. This information should then be included in the import documentation, such as the commercial invoice, and submitted to the customs authorities for clearance.
As with the AHECC, it is essential to ensure the correct HS code and duty rates are declared to avoid delays in customs clearance and potential fines.
Australian Border Force: Tariff Classification and Customs Clearance
The Australian Border Force (ABF) plays a significant role in ensuring the efficient movement of goods across international borders. One critical aspect of their work is tariff classification, which involves the correct assignment of HS codes to imported and exported goods. HS codes play a crucial role in this leg of the supply chain management process.
The ABF’s role in customs clearance is to facilitate the legal and timely movement of goods across international borders. This is a critical undertaking, as it helps to protect the domestic market and maintain an efficient supply chain management system. To achieve this, the ABF collaborates closely with customs brokers and businesses to ensure compliance with customs legislation, including the accurate assignment of HS codes and application of duty rates.
Customs clearance involves a multi-step process that begins with the submission of essential documentation, such as a commercial invoice, by the importer or customs brokers. This invoice typically contains essential information, including a description of the goods, price, and quantity to aid accurate tariff classification. This information helps ABF officers to verify the accuracy of the HS classification and other necessary aspects of the supply chain management process, such as determining compliance with import/export regulations and security requirements.
In cases where the original HS classification is challenged or replacement content is required, businesses and customs brokers must provide additional information to the ABF to support their claims. This can include product samples, technical specifications, or images that provide further clarification regarding the goods in question.
At EES Shipping in Perth, WA, we provide our clients with the best possible solutions to all of their logistics needs. We understand that every shipment is different, which is why we offer individualised solutions catered to each individual client. Contact us today for more information.
Why is tariff classification important?
Tariff classification ensures the proper application of duty rates to imported and exported goods. This process is essential for maintaining an efficient supply chain management system and protecting domestic markets from unfair competition and trade practices.
What role do customs brokers play in the process?
Customs brokers are licensed professionals who specialise in navigating customs procedures on behalf of businesses. They assist with HS code lookup, tariff classification, and ensuring compliance with customs regulations to facilitate the efficient movement of goods across international borders.
How can I find the correct HS code for my product?
HS code lookup tools are available to help you determine the appropriate code for your products. Some of these tools may be available on customs authorities’ websites, such as the Australian Border Force. In addition, beginners’ guides archives can provide further information on HS codes and their application.
What happens if incorrect HS codes are used?
Using incorrect HS codes can lead to delayed customs clearance, additional fees, non-compliance, and even penalties. Working with experienced customs brokers and providing accurate documentation, such as a commercial invoice, can help avoid these issues.