CLA-2-87:OT:RR:NC:N2:206
James MacNeill
MacNeill Classification Compliance, Inc.
PO Box 1214 Bristol, CT 06011
RE: The tariff classification of Power Take Off units from Germany
Dear Mr. MacNeill
In your letter dated April 9, 2024, you requested a tariff classification ruling on behalf of your client, Daimler Truck North America.
The articles under consideration are Power Take Off (PTO) units designed to be used on heavy duty trucks. The PTOs attach to a truck transmission via an aperture in the transmission casing and function to transfer the rotary power generated by the vehicle's engine to auxiliary machinery. Thus, the units are designed to take off the power generated by the engine. PTO mounting options can vary depending on the transmission and PTO models, but the function of the PTO remains the same.
In your submission you describe two PTO versions, the mechanical shift PTO (MS PTO) and the clutch shift PTO (CS PTO). Both serve the same purpose, and only differ in the internal mechanism by which the PTO output shaft is engaged and disengaged. The MS PTO relies upon internal gears that slide to mesh with each other and engage its output shaft, whereas the CS PTO relies upon an internal clutch pack of alternating friction and spacer discs to engage its output shaft. Both the MS PTO and CS PTO have a fixed internal gear ratio, which cannot be manipulated. Therefore, PTO models are manufactured with a variety of fixed internal gear ratios to meet the specific customer torque and horsepower requirements for the auxiliary device powered by the PTO.
In your request you suggest that the power take off unit can be classified under subheading 8708.99.8180 Harmonized Tariff Schedule of the United States (HTSUS), which provides for motor vehicle other parts and accessories. In addition, you also assert that the PTOs can not be classified in heading 8483, HTSUS, as transmission equipment, subheading 8708.40, HTSUS, as gear boxes for vehicles, subheading 8708.93, HTSUS, as clutches, or subheading 8708.99.68, HTSUS, as parts of powertrains. We partially agree.
Classification of merchandise under the HTSUS is made in accordance with the General Rules of Interpretation (GRI's) 1 through 6. The systematic detail of the HTSUS is such that virtually all goods are classified by application of GRI 1, that is, according to the terms of the headings of the tariff schedule and any relevant section or chapter notes. In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) may be utilized. ENs, though not dispositive or legally binding, provide commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. Customs believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
Section Note 1(l) to Section XVI excludes articles of section XVII. In addition, the ENs to heading 8483 instruct that articles described by the terms of heading 8483, but which are designed for use solely or principally with vehicles, are excluded from classification in heading 8483. Since the PTO units at issue are indeed designed for use with vehicles, we agree that classification in heading 8483 is precluded.
We also agree that the PTO units are not clutches of subheading 8708.93, HTSUS. As you state in your letter, a clutch functions to engage and disengage the transmission of power from a driving shaft to a driven shaft. Although the PTO units are capable of engaging and disengaging, this functionality is an ancillary requirement of the PTO units and the primary purpose is to transmit power.
Furthermore, the PTO units are not parts of powertrains of subheading 8708.99.68, HTSUS, as you state in your submission. CBP has defined the power train as extending from the engine through the transmission and differential through to the power axles. Similarly, the Road and Track Illustrated Automotive Dictionary defines the term power train as all the power-producing and transmitting components of an automobile: the engine, transmission, differential and driveshafts. The PTO units at issue are certainly not required in, nor do they contribute to, the process of transmitting power produced by the engine through to the power axles.
However, we disagree with your arguments about why the PTO units are not gear-boxes of subheading 8708.40, HTSUS. You rely on a definition of a gear-box, describing articles of heading 8483, which is another heading and chapter in the HTSUS. Although, we agree that gear-boxes of headings 8483 and 8708 are similar in the function of transmitting power and having a capability of changing speed, the two headings are not the same. You state that because the PTO units are fixed ratio speed changers, they are not gear-boxes. We disagree. Whether an article is a fixed or variable ratio, it's nonetheless a speed changer, and thus a gear-box for purposes of heading 8708, HTSUS.
Since we have established that the PTO units are gear-boxes, classification of the PTO units in subheading 8708.99.8180, HTSUS, as you suggested, is precluded.
The applicable subheading for the MS PTO and CS PTO units will be 8708.40.1150, HTSUS, which provides for, Parts and accessories of the motor vehicles of headings 8701 to 8705: Gear boxes and parts thereof: Gear boxes: For vehicles of subheading 8701.21, 8701.22, 8701.23, 8701.24 or 8701.29 or heading 8702, 8703 or 8704: Other. The rate of duty will be 2.5 percent.
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 at https://hts.usitc.gov/.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection 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, please contact National Import Specialist Liana Alvarez at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division