How do tariff classification numbers work for food importers?
All importers bringing goods into Canada need a 10-digit tariff classification number assigned to the products they import. Accurately classifying food products is mandatory, along with requirements such as getting a Canadian food importing license.
Canada's tariff classification system
The Canadian government uses Harmonized System (HS) codes that align with the standards of the World Customs Organization (WCO). The WCO’s Harmonized Commodity Description and Coding System ensures consistent goods classification standards across the world. Nearly all goods moved in international trade use the WCO’s standard for HS codes. Roughly 98% of all worldwide goods have an HS code from the WCO, providing a comprehensive standard for classifying imported food products.
HS codes for importing food products into Canada
The majority of nations and economies importing goods into Canada use the HS code system. In fact, more than 200 countries utilize HS codes, so Canadian food importers should invest time in learning how to classify their goods efficiently.
Standard HS codes consist of headings and subheadings, along with notes attached to the sections, chapters, and subheadings. The WCO offers general rules of interpretation that help determine the specific HS code under the HS system. They update HS codes every five years, while the 7th to 10th digit can be updated more often, so it’s important to confirm that the classification numbers you use are up to date. Canada’s 10-digit tariff classification numbers can be read in four parts:
- The first four digits show the international heading for the food product.
- The next two digits show the international sub-heading.
- The seventh and eighth digits show the Canadian tariff item.
- The last two digits show the Canadian statistical suffix.
Putting these four parts together creates the 10-digit classification number for importing your food product. In total, the WCO lists more than 9,000 numbers in the HS code, so companies need to ensure that they’re using the right one.
Why is tariff classification important for food importers?
Companies need to follow all rules and regulations outlined by the Canadian Food Inspection Agency (CFIA) and other government organizations that oversee imports. One of the steps that businesses must take to import food into Canada include the correct classification according to HS codes.
Food importers can face significant ramifications for incorrectly classifying products. Using the wrong HS code can result in penalties for non-compliance, significant delays at border entry points, and losing the privilege and license to import food. Companies can benefit from correct food product classification by potentially getting lower rates for duties and taxes.
Government organizations use tariff classification numbers to help:
- offer reduced duties for important trading partners;
- adjust tariffs in an effort to foster economic development;
- enable emergency surtaxes if importing goods harm local producers;
- enforce Canada’s rights under trade agreements;
- protect the health and safety of Canadians – for example, by facilitating food recalls;
- provide quick access to information that importers need to know.
With the correct HS code, importers can use the Automated Import Reference System (AIRS) to determine if additional requirements must be met to import the food product – such as a Safe Food for Canadians Regulations (SFCR) import licence or a phytosanitary certificate for certain types of plant products.
Do you have the right HS code for your food product?
Food importers sometimes experience challenges in finding the correct tariff classification number for their products. Multiple variables determine which HS code to use. Shipping raw orchard-grown apples will require a different HS number than shipping canned apples across the border. Accurate tariff classification is mandatory, so importers must ensure that they’re getting it right before shipping.
Canadian food importers can ensure compliance with our skilled team of customs brokers and freight forwarders. Click to connect with an experienced professional.
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