Key points
- Classification is based on the Customs Import and Export Tariff of the People’s Republic of China, the General Interpretative Rules, section and chapter notes, subheading notes, and classification decisions and administrative rulings published by the General Administration of Customs.
- The HS code determines the import duty rate, import-stage taxes, regulatory documents, inspection and quarantine requirements, and the export tax refund rate.
- The Harmonized System is revised roughly every five years, and the tariff and commodity codes change with it, so companies need to keep their product master data up to date.
In practice
Classification is one of the most specialised tasks in customs work. The same product may fall under different tariff lines depending on its material, use, degree of processing or whether it is shipped as a set; an unassembled or disassembled complete machine is generally still classified as the complete article. A wrong classification risks back duties and penalties, and also affects tax refunds and licence applications.
The mature approach is a company-wide classification register: each material is mapped to one confirmed commodity code, its declaration elements and the basis for the classification, and declarations reference it directly. This stops the same material being declared under different codes on different shipments. When a new material needs classifying, a customs specialist decides according to the rules, applies for an advance ruling where necessary, and adds the outcome to the register.
How Tranexio supports it
Tranexio maintains HS codes, tariff rates and declaration elements in its material and product compliance records, and provides AI HS classification suggestions: the top three candidate codes with confidence scores and reasoning, which the customs specialist confirms or overrides, with a full audit trail. See Customs and the Single Window.