It is critical to use trade terms and classifications correctly to maintain compliance and pay only the correct tariffs. Many people are unsure of the difference between the Harmonized Tariff Schedule (HTS) and Schedule B numbers and why/when they are needed. Let’s address that first.
- HTS codes are used to determine duty rates (tariffs) for imported goods.
- Schedule B numbers are used to track statistics concerning U.S. exports.
In both instances, it’s important to have the correct classification. Accurate HTS codes should be included on shipping documents for every import so that U.S. Customs and Border Protection (CBP) can efficiently assess the appropriate duty rate. Otherwise, CBP may dispute the classification which could cause delays in clearing a shipment.
Schedule B numbers (and other important export information) must be filed with CBP when the value of the commodity under each individual Schedule B number is over $2,500 or if a validated export license is required to export the commodity. The failure to do so could result in civil fines and penalties.
Whether your company needs ongoing classification assistance or a one-time review of your HTS/Schedule B database, CTP can supply the experts. Here are some questions to ask your staff regarding existing HTS and Schedule B classifications:
- How were your Schedule B and HTS classifications determined? Independent experts or by the OEM? Were they reviewed and verified?
- Do you review your classifications periodically for validity? They do change fairly regularly and the revision may pose a savings (or a risk) to you.