What Happens If You Choose the Wrong HTS Code?

Let’s say you’re importing a batch of goods and everything seems in order, until Customs holds your shipment. 

Why? The HTS code on your documents doesn’t match what the product actually is. Suddenly, you're facing delays, fines, or even extra duties you didn’t expect.

In this blog, we’ll break down what really happens when you use the wrong HTS code, and more importantly, how a freight forwarder knows the classification game inside out.

What is HTS code ?

The HTS code, or Harmonized Tariff Schedule code, is a 10-digit number used by the U.S. Customs to classify every product being imported. 

It helps determine the applicable tariffs, duties, and import regulations for your shipment.

Each HTS code is specific to a product’s type, use, and material.

Example: A ceramic mug has a different HTS code from a stainless steel tumbler, even though both are drinkware.

A stainless steel kitchen knife = HTS 8211.91.9060.

Let’s break down the HTS Code 9503.00.0073 step by step:

• 82 → Chapter: Tools, implements, cutlery, spoons and forks, of base metal
• 11 → Heading: Knives with cutting blades, serrated or not (including pruning knives), other than those of heading 8208, and blades therefor
• 91 → Subheading: Table knives having fixed blades
• 90 → Tariff Item: Other than straight razors, hunting knives, and similar
• 60 → U.S. Subheading: Kitchen knives having fixed blades, of stainless steel

Example Products: Stainless steel kitchen knives used for food preparation, chef’s knives, paring knives, etc.

This code helps customs determine how your product should be taxed and ensures compliance with U.S. import rules.

Why Are HTS Codes Important in International Trade?

• HTS codes are crucial in international trade because they serve as a standardized system for identifying and classifying imported products. 
• This classification isn’t just for calculating customs duties—it also affects a lot of other things. 
• For example, using the correct HTS code can help you qualify for lower tariffs under trade agreements like USMCA or GSP. 
• If you use the wrong code, customs might delay your shipment or issue fines, and it can hurt your company’s reputation with programs like C-TPAT. 
• For businesses that import a lot in the USA, having the right HTS code also helps automate the process and keep things running smoothly by reducing errors and making it easier to track shipments.

Learn more

What Are the Documents That Require an HTS Code?

When you import goods into the U.S., the HTS code isn’t just for customs, it shows up on multiple critical documents. 

These documents help customs officials, freight forwarders, and brokers process your shipment accurately and quickly.

Let’s go over the main ones:

• Commercial Invoice
  • This is the main document reviewed by U.S. Customs and your freight forwarder.
  • The HTS code listed on it tells customs what the product is and helps calculate import duties.
  • Example:If you’re importing wireless earbuds, the HTS code should be listed along with the product description, quantity, value, and origin.
• Packing List
  • While not always mandatory, many shippers include the HTS code on the packing list to make product identification easier during customs inspections, especially for shipments with multiple SKUs.
• Bill of Lading (B/L) or Air Waybill (AWB)
  • The HTS code may be referenced (especially for consolidated shipments or high-risk commodities), although it’s not always required here. Some logistics providers prefer it included for internal classification and cargo tracking.
• Customs Entry (CBP Form 7501)
  • This is the official form submitted to U.S. Customs and Border Protection when your shipment arrives.
  • The HTS code is required here because it determines:
    • The applicable duty rate
    • Whether additional government agency clearance (like FDA, USDA, etc.) is needed
• Importer Security Filing (ISF)
  • Also known as the “10+2” filing, ISF must be submitted for ocean imports into the U.S. at least 24 hours before vessel departure.
  • HTS codes are required in this filing to pre-identify the cargo with CBP.
  • Note: Not having the correct HTS in your ISF can lead to penalties of up to $5,000.

Do Both Import and Export Shipments Require HTS Codes?

The short answer:

• Yes for imports
• Not exactly for exports — but something very similar is used.

Let’s break it down.

For Imports Into the U.S.: HTS Code Is Mandatory

When you’re importing goods into the United States, you must provide the correct HTS (Harmonized Tariff Schedule) code on your shipping and customs documents.

U.S. Customs and Border Protection (CBP) uses it to:

• Identify what the product is
• Apply the correct import duty
• Ensure compliance with regulations

If you skip it or use the wrong code, your shipment could be delayed, reclassified, or fined.

For Exports From the U.S.: Use Schedule B Code Instead

When exporting from the U.S., you don’t use the HTS code, you use something called the Schedule B code.

👉 What is Schedule B?

It’s a 10-digit export classification code maintained by the U.S. Census Bureau, and it’s based on the same international HS system as HTS.

Key point:

• The first 6 digits of Schedule B and HTS are usually the same
• The last 4 digits are tailored for export statistics instead of duty rates

Example:

• A laptop might have:
  • HTS Code (import): 8471.30.0100
  • Schedule B Code (export): 8471.30.0100 (often the same, but depends on the product)

Why Exporters Should Still Care About HTS Codes

Even though Schedule B is required for U.S. exports, many exporters still refer to HTS codes when:

• Filling out a commercial invoice
• Helping overseas buyers with import classification
• Verifying if their goods qualify for duty-free treatment under trade agreements

What Is the Difference Between HTS Code and Schedule B?

If you’ve ever dealt with U.S. imports or exports, you’ve probably come across both HTS codes and Schedule B codes and wondered if they’re the same thing.

They’re closely related, but used for different purposes. Let’s break it down:

What happens if you choose the wrong HTS code 

Choosing the wrong HTS code might seem like a small mistake, but in the world of international shipping, it can lead to costly delays, penalties, and compliance issues.

Here’s what can go wrong if your HTS code is incorrect:

You Might Overpay or Underpay Duties

• The HTS code directly determines the duty rate.
• If you classify a product under a higher-duty category, you might overpay taxes unnecessarily.
• Example:
  • HTS Code for plastic containers: 3923.10.0000 (duty: 3%)
  • HTS Code for metal containers: 7310.10.0050 (duty: 0%)
• Using the wrong one could cost you money, or raise a red flag with customs.

Your Shipment Could Be Delayed or Held at Customs

• U.S. Customs and Border Protection (CBP) uses the HTS code to check if your product needs:
  • Partner government agency clearance (like FDA, USDA, etc.)
  • Anti-dumping or countervailing duties
  • Import licenses or special certificates

If you use the wrong code, CBP might hold or inspect your cargo, leading to costly demurrage or storage fees.

You Risk Fines and Penalties

• CBP considers incorrect classification a compliance violation.
• If they determine the misclassification was due to negligence or fraud, you could face:
  • Fines up to twice the amount of lost duties
  • Penalties for ISF upto $5000
  • Revoked import privileges for serious repeat offenses

You Could Miss Out on Duty-Free Benefits

• Some trade agreements (like USMCA or GSP) offer reduced or zero duty for eligible products, but only if you use the correct HTS code.
• Wrong code = no duty relief.

It Affects All Related Documentation

• If the HTS code is wrong on one document (like the commercial invoice), it will likely be wrong on:
  • ISF filings
  • CBP Form 7501
  • Certificate of Origin
• That mismatch causes errors across your entire customs process.

Incorrect Regulatory Agency Triggering (FDA, USDA, EPA, etc.)

• HTS codes determine which government agencies get notified of your shipment.
• An incorrect code can:
  • Trigger unnecessary inspections (e.g., FDA review for non-food items)
  • Bypass required screening, leading to compliance violations
  • Delay entry clearance from agencies like the Fish & Wildlife Service, CPSC, or DOT
• Example: Misclassifying supplements as general food could cause problems with the FDA

Problems with Post-Entry Corrections or Refunds

• If your entry is filed with the wrong HTS and you later try to:
  • File a Post-Entry Amendment (PEA)
  • Request a duty refund (e.g., under a duty drawback claim)
• CBP may deny it due to inconsistent classification history. This becomes even trickier when:
  • You’re doing volume imports
  • You rely on reconciliation programs or customs brokers for compliance

Negative Audit Findings (Focused Assessments by CBP)

• If you’re a frequent importer, CBP may conduct Focused Assessments or audits.
• Wrong HTS codes, especially on high-volume items, can lead to:
  • Penalties
  • Required compliance improvement plans
  • Loss of C-TPAT or trusted trader status, which affects customs clearance times

How to find the right HTS code

Many importers think they can just search their product name online and pick a matching HTS code, but that’s not how it works. 

Choosing the wrong HTS code can result in serious hiccups. The classification of HTS Code is not based on product names, it's based on legal definitions, materials, uses, and compliance criteria.

In order to get the right HTS Code, importers turn to experienced freight forwarders.

A knowledgeable freight forwarder is more than just a shipping partner, they’re a compliance and classification ally. Here’s how they make a difference:

Product Analysis Based on Customs Criteria

We review your product’s:

• Material composition
• Function and primary use
• Country of origin
• Level of processing (raw, semi-finished, or finished)
• This helps us identify the most accurate classification, even when your product fits into more than one possible category.

Matching Your Product to Legal HTS Descriptions

• HTS codes are based on legal definitions, not marketing terms.
• For example, a “steel pipe” could fall under different codes based on:
  • Wall thickness
  • End use (construction vs. oil drilling)
  • Alloy content
• We interpret the correct legal tariff language to make sure your code holds up to customs scrutiny.

Cross-Referencing with Compliance Requirements

• Many HTS codes are tied to Partner Government Agencies (PGA) like:
  • FDA
  • USDA
  • CPSC
  • DOT
  • EPA
• We flag these in advance so you're not caught off guard by additional documentation or inspections.

Avoiding High-Duty or Restricted Classifications

• Sometimes, the wrong code can subject your product to:
  • Anti-Dumping or Countervailing Duties (ADD/CVD)
  • Quotas or import restrictions
  • Extra licensing or registration steps
• We help you steer clear of red-flag codes when a more accurate and favorable one exists.

Consistency Across Documentation

• We ensure the HTS code used is:
  • Consistent on commercial invoices, packing lists, and ISF filings
  • Aligned with the product description
  • Accurately reflected in CBP filings and customs entries
• This reduces the risk of entry rejections or post-entry audits.

Save Time, Avoid Stress

• Instead of spending hours trying to interpret legal jargon, you can:
  • Share your product info with us
  • Let us handle classification
  • Focus on your business while we handle compliance

Learn more

Final say 

Choosing the correct HTS code isn’t just a technical step, it’s a crucial part of ensuring your shipments move smoothly, cost-effectively, and without regulatory trouble. One small mistake can snowball into delays, penalties, or even lost business opportunities.

That’s why it’s worth investing in proper classification from the very beginning.

At Air7Seas, we don’t just move freight, we help you navigate the complex world of customs compliance. 

From analyzing your product to selecting the right HTS code and aligning your paperwork, we make sure your cargo clears faster, cleaner, and without surprises.

Ship faster and penalty free with us

1. Does the HTS code affect duty rates and fees?

HTS codes directly determine how much import duty you owe. Even a small misclassification (like choosing plastic instead of metal) could cost or save you thousands depending on duty percentages or exemptions.

2. Why do freight forwarders help with HTS codes?

Because they understand how customs classify goods—not just by name, but by use, material, and structure. They cross-reference your product against legal tariff definitions, agency flags (like FDA or USDA), and can help you avoid high-risk classifications that trigger duties or restrictions.

3. What’s the difference between Schedule B and HTS if they look the same?

Schedule B is used for U.S. exports and tracks trade statistics; HTS is used for imports and determines duties. They often share the same first 6–10 digits but have different regulatory roles.

4. Can I fix an HTS code error after filing?

Yes, but it’s complicated. You’d need to submit a Post-Entry Amendment or file a protest. If CBP sees a pattern of misclassification, it could hurt your future filings or trigger an audit.

5. What if my product fits more than one HTS code?

That’s where expert classification matters. A freight forwarder or broker evaluates factors like main function, composition, and end-use to apply the most appropriate (and defensible) code under U.S. Customs rules.