HS code is short for Harmonized Commodity Description and Coding System. It’s a list of numbers used by customs to classify a product.
As the name implies, the Harmonized Commodity Description and Coding System or better known as the Harmonized System (HS) is an international standard for naming and numbering systems used to classify trade products and their derivatives. This HS Code is managed by the World Custom Organization (WCO).
Indonesia began to implement this HS Code through Government Regulation (PP) No. 26 of 1988 and it was realized in the form of the Indonesian Import Duty Tariff Book (BTBMI). However, Indonesia has just ratified the HS convention with Presidential Decree (Kepres) No. 35 of 1993 and in 1994 through the Decree of the Minister of Finance (KMK) No. 81/KMK.05/1994, the classification structure of goods in BTBMI/BTKI (Indonesian Customs Tariff Book) refers to the classification system of the HS Convention.
HS Code Functions or ‘Harmonized System’ Uses
This Harmonized System or HS Code serves or is used as the basis for:
1. Customs Tariff
2. Rules of Origin
3. Internal tax collection
4. Transport fares and statistics
5. International trade statistics collection
6. Excise control and procedures (including risk and compliance as well as information technology)
7. Monitoring of control of goods (such as drugs, ozone layer, sharp weapons, endangered species, waste)
8. Negotiations in trade (such as tariff concession schedule in WTO/World Trade Organization)
Specifically, this HS Code or BTKI is used for matters related to export and import, such as:
1. Import Duty
2. Export Duty
3. Anti-Dumping Duties and BMTP (Safety Act Import Duties)
4. Import Taxes (such as PPN, PPnBM and PPh Article 22)
5. Customs notification and more
