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The Harmonized System – Tariff Classification

Harmonized System Structure

The HS is a structured, hierarchical system; meaning it has progressively more specific levels of detail.
  1. Sections
  2. Chapters
  3. Headings
  4. Subheadings
The Canadian Customs Tariff then adds Tariff items for additional detail and to assign rates of duty, and statistical suffixes for Statistics Canada purposes.
Sections, Chapters, Headings & Sub-Headings are each organized by:
         state of manufacture
(e.g., raw materials to finished goods) or
          technological complexity.
Domestically we follow the same principle for Tariff Items and Statistical suffixes.

 

Sections
A section is essentially a group of chapters which cover similar or related goods, for example Section 1:  Contains five chapters relating to:
Chapter 1. Live animals,
Chapter 2. Meat and Edible Offal,
Chapter 3. Fish and Crustaceans,
Chapter 4. Dairy and Produce,
Chapter 5. Products of animal origin not elsewhere specified or included

 

Chapters
         Are essentially Sub-divisions of Sections
         The first two digits of a classification number
         Some Chapters have Sub-Chapters to allow for further groupings and to assist with certain legal notes
       Chapter 77 is not used (reserved for possible future use).
There are also additional Chapters 98 & 99, which have been reserved for used by individual countries.


Chapter 98 contains provisions which are specific to Canada. Such as Canadian goods returning, returning residents, settlers effects etc.
NOTE: In order to use a CHAPTER 99 Conditional Tariff item, the goods must first be classified within Chapters 1- 98. Then you apply the first 4 digits (Heading level) of the Conditional Tariff Item.

 

Heading
The heading is comprised of 4 digits.
 
The first 2 digits of the number indicate the Chapter in which the number appears.
The next two digits indicate the positions of the heading in the chapter.
When referring to a heading, the first two digits are separated from the last two by a decimal. However, when additional digits are added, the decimal moves to after the fourth digit.
If headings have not been further subdivided, the 5th and 6th digits are zeros. An example of a heading which has not been further subdivided is heading 48.01
Newsprint – 4801.00.00.00
The headings can be easily found on the tariff page because they are in numerical sequence and are printed in bold face type.

 

Subheadings
Once the proper heading is established, the next step is locating the specific subheading. A subheading is comprised of six digits.
7204.10
The Subheading is considered International in its scope.

 

Tariff Item
The term “TARIFF ITEM” refers to any 8 digit number
e.g. 0702.00.92
In Canada, this is the level at which rates of duty are assigned.

 

Classification Number
The 9TH and 10TH digits are the statistical suffix which complete the
10 digit number referred to as the HS classification number
e.g. 7407.29.90.40

 

How the Tariff Classification Number is structured
Chapter                   8525.60.00.30
Heading                  8525.60.00.30
Subheading             8525.60.00.30  
Tariff                       8525.60.00.30
Statistical Suffix      8525.60.00.30


Breakout dash structure summary
         All you have to do is count the number of dashes starting from the decimal after the last digit of the Heading.

 

Subheading 5th and 6th digits
           
            1 dash   - First level subheading breakout
            2 dashes            - – Second level subheading breakout
            27.11  Petroleum gases and other gaseous hydrocarbons.
                                   
                                      - Liquefied
            2711.12             – - Propane

 

Tariff Item 7th and 8th digits
            3 dashes          – - – First level Tariff Item breakout
            4 dashes          – - – - Second level Tariff Item breakout
                                    - Liquefied
2711.12                       – - Propane
2711.12.10.00 – - – In containers ready for use
2711.12.19.00 – - – - Domestic

 

Statistical Suffix 9th and 10th digits
            5 dashes          – - – - – First “stats” breakout
            6 dashes          – - – - – - Second “stats” breakout
                                               
                                    - Liquefied
2711.12                       – - Propane
2711.12.10      – - – In containers ready for use
2711.12.19      – - – - Domestic
2711.12.19.10 – - – - – Made in Canada
2711.12.19.18 – - – - – - Ontario
27.11  Petroleum gases and other gaseous hydrocarbons.
           
                       - Liquefied:
2711.11.00.00- – Natural gas
2711.12          – - Propane
2711.12.10.00- – - In containers ready for use
2711.12.90.00- – - Other
2711.13.00.00- – Butanes
2711.14.00     – - Ethylene, propylene, butylene and butadiene
                   10 – - – - – Ethylene
                   20 – - – - – Propylene
                   30 – - – - – Butylene
                   40 – - – - – Butadiene
2711.19         – - Other
2711.19.10.00- – - In containers ready for use
2711.19.90.00- – - Other

 

PUNCTUATION
Comma(,) – Separates items of a list
            42.02   Trunks , suit-cases , vanity-cases , executive-cases , briefcases…
Or sets off descriptors
           
41.11   Composition leather with a basis of leather or leather fibre,
in slabs , sheets or strip , whether or not in rolls.

 

Semi-Colon (;) – Indicates a full stop and separates items within
descriptive text into independent units
49.07   Unused postage, revenue or similar stamps of current or new issue in the country to which they are destined ; stamp-impressed paper ; banknotes ; cheque forms ; stock, share or bond  certificates and similar documents of title.
This heading has five parts: (1) stamps, (2) stamp-impressed papers/forms, (3) banknotes, (4) cheques, and (5) various certificates and documents of title.

 

Colon (:) – Indicates that there is a list to follow.                              
                                     E.G.    61.03                          
                                                SUITS:
                                                            OF WOOL OR FINE
ANIMAL HAIR                                                                
                                                            OF COTTON
                                                            OF SYNTHETIC FIBRES
                                                            OF OTHER TEXTILE                                                                       MATERIALS

 

AND adds conditions or descriptors
OR indicates alternatives; it is inclusive, not exclusive
            64.03   Footwear with outer soles of rubber,
                        plastics, leather or composition leather
                        and uppers of leather.

 

OR indicates the outer soles may be of any of the materials in that list, while AND indicates that there are also requirements for the composition of the uppers of the footwear.

 

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