Unanswered Questions About HS Code for Malaysia

Having full understanding of the HS Code for Malaysia is essential for every importer and exporter to avoid wrong custom tariff and shipping delays. If you’re an SME looking to stay ahead of the competition and explore international shipping, consider first these five important factors about the HS Code list for Malaysia:

1. What is the difference between AHTN and HS Code?

The HS Code or HS Tariff Code refers to the Harmonised System Code. It is a set of customised codes used in import and export trades between Malaysia and non-ASEAN countries. Specifically, it plays an important role as it helps the customs authorities here in Malaysia tabulate taxes and duties. On the other hand, the ASEAN Harmonised Tariff Nomenclature or, AHTN in short, is a different set of codes developed by the Royal Malaysian Customs Headquarters for custom trades between Malaysia and her ASEAN neighbours. Unlike the HS Tariff Code that comprises six digits, the AHTN has a total of eight digits.

2. At which stage does the HS Code come into the picture?

The main function of the HS Code list for businesses here in Malaysia is to help the customs authorities identify the incoming or outgoing products and assess the chargeable duties and tariffs here in Malaysia.  As such, Malaysian exporters and importers must work with their customs brokers and freight forwarders to determine the correct six-digit HS Tariff Code and incorporate them in the shipping documents, commercial invoices, packing lists, and shipping bills before sending the goods to the port to be exported or before initiating an import.

3. What happens when you submit a wrong HS Code?

Importers and exporters must always be mindful when submitting a HS Code here in Malaysia as applying the wrong ones can be costly. Essentially, using the wrong HS tariff codes can result in miscalculation of custom duties that will impact the overall shipping cost for importers and exporters. The worst thing that could happen for erroneous submission of Malaysia HS Codes is the possibility of the authorities regarding the submission as an infringement of customs regulations, in which the goods will have to be impounded and for an investigation to be launched. The local authorities here in Malaysia have the right to impose fines, seizure of goods, or even deny future import and export privileges. 

4. How to get the correct HS Codes?

Take note that ‘PDK2017’ refers to Perintah Duti Kastam (PDK) 2017, which also translates to ‘Customs Duty Order 2017’. Customs Duty Order 2017 is the replacement for the previous 2012 version and includes changes such as increasing the number of code digits from nine to 10, as well as a revised tariff structure here in Malaysia.

5. As an exporter, do I use the HS Tariff Code for country of origin or for destination?

The HS Code list here in Malaysia is a standardised classification list that is used by over 200 economies across all participating regions.  However, individual countries may choose to add extended codes after the six-digits for further classification. For example, a quick search on the JKDM website indicates that the HS Tariff Code for apples here in Malaysia is 08.0810.00.00. The first six digits, 08.0810, is a standard international HS Tariff code, but the last four digits, 00.00, is a subdivision code that is additional to the Malaysian customs’ HS Tariff Code. 

Aside from the HS Code, learning more about the HSN Code and HTS Code and how they are different from Schedule B can also help you gain insights into the shipping procedures of countries with specific processes like the United States and India.