CLA-2-85:OT:RR:NC:N2:208
Mr. Kevin D. Williams
Carestream Health, Inc.
150 Verona Street
Rochester, NY 14608
RE: The tariff classification of software recovery “kits”
Dear Mr. Williams:
In your letter dated July 30, 2018, you requested a tariff classification ruling. The provided samples are being returned.
The merchandise under consideration is software recovery "kits," which are used to repair medical devices. There are two scenarios in question. The first scenario is a kit that includes a USB flash drive, multiple CDs/DVDs, laminated barcodes, timing labels, and manuals. The second scenario is a kit with multiple CDs/DVDs, laminated barcodes, timing labels, and manuals. The difference between the two kits is the first kit contains a USB flash drive and the second kit does not. Moreover, both kits are used to upgrade the software in the field.
Regarding the first scenario, several of the optical disks contain software and are used in case the software has to be reinstalled onto the machine. In addition, included in the kit is a blank optical disk used to backup the detector configuration and optical disks that contain information regarding the product. The detector (medical device) labels are used to help keep track of the detectors that are being used with the product. The USB flash drive, which is imported unrecorded, is used to back up the system configuration after the product software has been successfully upgraded. When all used together, all items in the sets are used to enable the already system upgrades to a new version of software.
In the second scenario, the optical disks (CDs) are used to inform the customer about the product. The software optical disks (DVDs) are used to install the software in a repair situation. When used together, this kit can repair the unit by reloading the software onto the unit and can upgrade the system to the latest version of software.
It is the opinion of this office, that when imported packaged for retail sale, both scenarios would be considered sets for tariff classification purposes. In both scenarios, the optical media containing software imparts the essential character of the sets.
In your first submission, you state that some of this merchandise is of United States origin and may be returned from unspecified countries to the United States. Please note that United States manufactured products are entitled to enter free of duty as American goods returned, upon compliance with Section 10.1, Customs Regulations (19 C.F.R. §10.1). Heading 9801, Harmonized Tariff Schedule of the United States (HTSUS), allows products of the United States when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad, to be entered free of duty. Regarding the applicability of heading 9801, HTSUS, if the importation of any of the imported items meets the criteria set forth in the cited regulation, those specific items may be eligible for duty exemption under subheading 9801.00.10, HTSUS.
The applicable subheading for the subject software kits will be will be 8523.49.4000, HTSUS, which provides for Discs, tapes, solid-state non-volatile storage devices, "smart cards" and other media for the recording of sound or of other phenomena, whether or not recorded, including matrices and masters for the production of discs, but excluding products of Chapter 37: Optical media: Other: Other: For reproducing representations of instructions, data, sound, and image, recorded in a machine readable binary form, and capable of being manipulated or providing interactivity to a user, by means of an automatic data processing machine; proprietary format recorded discs. The rate of duty will be Free.
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 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 Lisa Cariello at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division