Schedule B and HTS Codes. What are They?
June 28, 2021 Author: Global Wizard Team
Many details go into preparing export documentation and probably the most important number that will go on every Certificate of Origin and Commercial Invoice is the Schedule B or HTS Code.
The Schedule B or HTS Code is assigned to every product on a shipment. In the United States, Schedule B is for exporting while HTS Codes are for importing.
These numbers are government-assigned, by category, to help define and provide statistical data on goods coming in and leaving the country. Every product must have a code because it tells customs agents what is in a package moving across the border.
HTS (Harmonized Tariff Schedule)
The purpose of the HTS Code is to set out the tariff rates and statistical categories for all products and goods imported into the United States.
HTS is based on the international Harmonized System, which is the global system of codes set by the World Customs Organization that are applied to most goods and globally accepted and recognized by over 200 countries (98% of international trade).
Sample HTS Code
The first six digits of the HTS code identify all items in international trade and are the same for all countries that use the HTS.
The last two or four digits are country-specific. In the United States, these last four digits provide the duty rate and balance of trade statistical reporting suffix for the imported goods.
A Schedule B number is a 10-digit number that is used in the United States to classify physical goods being exported from the United States to another country. Schedule B is based on the international Harmonized System (HS) of 6-digit commodity classification codes.
Schedule B numbers are assigned, maintained, and used by the U.S. Commerce Department, Census Bureau, Foreign Trade Division to collect and publish U.S. export statistics. They aggregate data on ALL exporters of products. Schedule B data allows them to group products in a meaningful way.
When exporting, it's important to classify goods with the most appropriate Schedule B / HTS Code. Global Wizard maintains the Schedule B / HTS codes within the database to ensure compliance for exporting as well as a search and lookup for our customers to quickly find the proper code and data for their products within a shipment while translating that information in the way that the government wants to see it. Our customers run their manufacturing their way, the government sees the data their way. Everyone is happy.
Why Do You Need to Know Your Products’ HTS and Schedule B Codes?
Memorizing the codes for each of your products may be possible for small product lists, but with catalogs of products, it can become unwieldy to track. However, it’s important that you know how to find and identify your product’s Schedule B and HS numbers for the following reasons:
- To determine applicable import tariff rates and whether a product qualifies for a preferential tariff under a specific country’s FTA (Free Trade Agreement)
- To file the Electronic Export Information (EEI) in AES (Automated Export System)
- To complete shipping documents, such as Certificates of Origin, Commercial Invoices, etc.
What happens if my Schedule B Code has reached obsolescence?
You might have been exporting the same product for years using the same Schedule B code and then all of the sudden the system you use to complete your export documentation or your freight forwarder informs you that the Schedule B code is invalid.
There must be a mistake, right?
Well, not necessarily.
There are times when the government or World Customs Organizations find it is necessary to update and make changes to the Schedule B codes.
- Changes to product and good definitions
- Recently invented goods that may not fall into an existing category
- General advancements in technology that make category adjustments necessary
Changes to Schedule B and HTS codes typically happen once a year. The most recent updates occurred in July 1, 2020, and January 2021.
Global Wizard will inform users of an obsolete code and provide access to a search tool to find a replacement. If you need assistance from an expert, our support desk is available and ready too!
Are HTS for importing and Schedule B codes for exporting the same? Does it matter?
They are not always the same and yes, it matters! There will be times that you may find the HTS and the Schedule B code for a product to be the same. That’s okay. However, there will also be times that they will not be the same so it’s never safe to assume that they will be the same. For example:
Example Search Term: Onion
Searching the term ‘onion’ in the HTS database provides the code 0703.10.2000 and a description of ‘onion set’. That’s all the information that the description provides.
Searching the term ‘onion’ in the Schedule B database provides the code 0703.10.0010 and a slightly more detailed description of certified organic onions that can be fresh or chilled.
Notice that these HTS and the Schedule B codes are not the same and should not be used interchangeably on import and export documentation.
Example Search Term: Female Horse
HTS: 0101.21.0020 Female Purebred breeding animal, Live
Schedule B: 0101.21.0020 Female Purebred breeding animal, Live
In this example, the HTS and the Schedule B codes are the same for the search term ‘female horse’. Characteristics of the horse in terms of colors, size, or breed do not matter for the code. That information goes elsewhere. However, the gender of the horse is important in the search term as ‘male horse’ returns a different number.
Not taking the time to check and assuming they are the same could hold up your shipment at a customs facility.