CLA-2-84:OT:RR:NC:N1:104
Mr. Kurt M. Schie
WoodMaxx Power Equipment Ltd.
42 Jackson Street
Akron, NY 14001
RE: The tariff classification of various Tractor Implements from China
Dear Mr. Schie:
In your letter dated June 18, 2018 you requested a tariff classification ruling.
You requested a tariff classification on three tractor implements. The first tractor implement is referred to as a Backhoe Attachment which is constructed of steel that is powder coated or painted. The backhoe is not self-propelled. It must be attached to a tractor via a self-contained hydraulic system in order to derive its power from the tractor’s power take off (“PTO”) shaft. The backhoe attachment is used on small farms in agricultural enviroments to dig drainage and irrigation lines, remove rocks and stumps, bury deceased livestock and remove animal waste. In order to operate the attachment, the operator sits in the backhoe’s seat and uses the two handles that open or close the hydraulic valves to extend or retract the boom and dipper which allow the user to dig or move the material.
The second tractor implement is described as a Flail Mower, Mulcher and Shredder Attachment. The implement is not self-powered but rather derives its power from a tractor through a Power Take Off (PTO). It is used to mow field grass, weeds and small samplings on farmland. The cuttings are further pulverized by rotary blades. The remaining debris is then ejected and left on the field to decay and enrich the soil.
The third tractor implement is referred to as a Mulcher, Shredder and Chipper Attachment. The implement is not self-powered but rather derives its power from a tractor through a Power Take Off (PTO). It is used to reduce organic debris such as wood, plant clippings and leaves into small pieces in order to create mulch for composting. Vegetation is fed into the machine’s hopper where it is pulled into a spinning grinding head. Knives then cut and reduce the vegetation into small pieces which are ejected out through a discharge chute. The resulting compost is used to enrich soil for crop production.
The applicable subheading for the Backhoe Attachment will be 8430.69.0100, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Other moving, grading,leveling, scraping, excavating, tamping, compacting, extracting or boring machinery, for earth, inerals or ores; pile-drivers and pile-extractors; snowplows and snowblowers: Other machinery, not self-propelled: Other”. The rate of duty will be free.
The applicable subheading for the Flail Mower, Mulcher and Shredder Attachment will be 8433.20.0020, HTSUS, which provides for “Harvesting or threshing machinery, including straw or fodder balers; grass or hay mowers; machines for cleaning, sorting or grading eggs, fruit or other agricultural produce, other than machinery of heading 8437; parts thereof: Other mowers, including cutter bars for tractor mounting … Tractor drawn or for tractor mounting: Rotary cutter type”. The rate of duty will be free.
The applicable subheading for the Mulcher, Shredder and Chipper Attachment will be 8436.80.0090, HTSUS, which provides for “Other agricultural, horticultural, forestry, poultry-keeping or bee-keeping machinery, including germination plant fitted with mechanical or thermal equipment; poultry incubators and brooders; parts thereof: Other machinery. Other: Other: Other”. The rate of duty will be free.
In your submission, you inquire about the eligibility of duty-free treatment under subheading 9817.00.50, HTSUS, which applies to machinery, equipment and implements to be used for agricultural and horticultural purposes. The Flail Mower, Mulcher and Shredder Attachment and the Mulcher, Shredder and Chipper Attachment are not eligible for this subheading. The exclusionary language found in Section XXII, Chapter 98, Subchapter XVII, U.S Note 2 (t) excludes articles provided for in headings 8433 and 8436, HTSUS.
You also propose that the subject backhoe be considered for duty-free treatment as agricultural or horticultural machinery under subheading 9817.00.50, HTSUS. Subheading 9817.00.50, HTSUS, is an actual use provision. To fall within this special classification, a three-part test must be met. First, the subject merchandise must not be excluded from the heading under Section XXII, Chapter 98, Subchapter XVII, U.S. Note 2, HTSUS. Secondly, the terms of the headings must be met in accordance with GRI 1, which provides that classification is determined according to the terms of the headings and any relative section or chapter notes. Thirdly, the article must comply with the actual use regulations under Section 10.131 through 10.139, Customs Regulations (19 CFR 10.131 through 10.139).
As stated above, the merchandise is classifiable under subheading 8430.69.0100, HTSUS. This subheading is not excluded from classification in subheading 9817.00.50, HTSUS, by operation of Section XXII, chapter 98, Subchapter XVII, U.S. Note 2, HTSUS. The second part of the test calls for the unit to be included within the terms of subheading 9817.00.50, HTSUS, as required by GRI 1. The unit must be "machinery”, “equipment" or "implements" used for "agricultural or horticultural purposes". In this office’s opinion, the subject merchandise is "machinery" which fulfills the requirement of an agricultural pursuit.
The three conditions required by 19 CFR 10.133 which must be met to receive duty preference for actual use are:
(a) Such use is intended at the time of importation; (b) The article is so used; and (c) Proof of use is furnished within 3 years after the date the article is entered or withdrawn from warehouse for consumption.
The backhoe described above is classifiable in subheading 9817.00.50, HTSUS, if the actual use conditions and requirements of Sections 10.131 through and including 10.139, Customs Regulations, are met.
Effective July 6, 2018, the Office of the United States Trade Representative imposed an additional tariff on certain products of China classified in the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(b), HTSUS. For additional information see “Notice of Action and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation” (June 20, 2018, 83 F.R. 28710). Products of China that are provided for in heading 9903.88.01 and classified in one of the subheadings enumerated in U.S. note 20(b) to subchapter III shall continue to be subject to antidumping, countervailing, or other duties, fees and charges that apply to such products, as well as to those imposed by heading 9903.88.01.
Products of China classified under HTSUS subheadings 8430.69.0100; 8433.20.0020 and 8436.80.0090, unless specifically excluded, are subject to the additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 number, i.e., 9903.88.01, in addition to the 8433.20.0020 and 8436.80.0090 numbers listed above, unless specifically excluded.
With regard to the backhoe attachment classified under subheading 8430.69.0100, HTSUS, as stated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(a), HTSUS, the rates of duty imposed by heading 9903.88.01 do not apply to products for which entry is properly claimed under a heading or subheading in chapter 98.
The tariff is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Notice cited above and the applicable Chapter 99 number.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at https://hts.usitc.gov/current.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Patricia O’Donnell at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division