For government, a tariff classification system enables "uniform identification of imported and exported goods for purposes of duty and tax collection,
enforcement of national laws and international treaties, analysis for economic and business planning, and international trade negotiations."
For users of the tariff (importers and exporters of all types and sizes), correct classification is a legal responsibility.
Non-compliance can mean shipment delays, increased inspections, fines, and other administrative penalties.
Correct classification often saves money, both in the short and long term. When examining a company's past imports, customs consultants find that overall,
too much duty has been paid, indicating that full advantage of provisions of the tariff were not taken. Making use of these provisions requires a precise knowledge of the product to be classified,
something that the importer or exporter has, as well as knowledge of the Tariff and the principles of classification, something readily know-able.
Whether goods are eligible for any of the special provisions of the Tariff that allow for lower duty rates usually depends on the use or purpose for which they are being imported, or on the availability of certificates of origin.
Again, the importer is in the best position to know these facts.
Verifying the classification decisions of customs brokers and professional classification suppliers is a good way of protecting both compliance records and revenue outlay in the form of duties and taxes.
By understanding how the tariff classification process works, importers will be able to work together with their classification provider (usually a customs broker or consultant) to ensure that their goods are classified correctly.
An international "Harmonized System" for the description and classification of goods was created in 1988, and soon after adopted by nations around the world. The broad, core specifics and structure of Harmonized System classifications is universal,
with each participating country eligible to add and define specific detail items, and to create and assign rates of duty in any required categories for all classifications.