CLA-2 CO:R:C:M 953648 LTO
Ms. Elizabeth Brault
Fingerhut Corporation
4400 Baker Road
Minnetonka, Minnesota 55343
RE: 143-piece tool kit; GRI 1 set; heading 8204; heading 8205;
subheading 8204.20.00; EN 82.06; GRI 3(b)
Dear Ms. Brault:
This is in response to your letter of February 16, 1993,
requesting the classification of and Generalized System of
Preferences (GSP) eligibility for a 143-piece tool kit under the
Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The article in question is a 143-piece tool kit. The kit
contains the following items, in addition to the blow molded
plastic case (fitted):
(a) 60 - sockets including both inch and metric sizes
(b) 15 - accessories including 2 quick release ratchet
handles and 5 extension handles
(c) 29 - drive bit sockets
(d) 18 - hex key wrenches
(e) 1 - 16 oz. ball peen hammer
(f) 3 - flare nut wrenches
(g) 4 - piece punch set
(h) 10 - combination wrenches
(i) 1 - D.C. tester
(j) 2 - tire gauges
All of the items are produced in Malaysia except for one of
the quick release ratchet handles (Taiwan), the hammer (Taiwan),
the flare nut wrenches (India), the combination wrenches (India),
the D.C. tester (Taiwan) and the tire gauges (Taiwan). - 2 -
ISSUE:
1. Whether the 143-piece tool kit is classifiable as a tool set
under subheading 8206.00.00, HTSUS.
2. Whether the tool kit is eligible for duty-free treatment
under the GSP.
LAW AND ANALYSIS:
The General Rules of Interpretation (GRI's) to the HTSUS
govern the classification of goods in the tariff schedule. GRI 1
states in pertinent part that "for legal purposes, classification
shall be determined according to the terms of the headings and
any relative section or chapter notes . . . ." Subheading
8206.00.00, HTSUS, covers "[t]ools of two or more of headings
8202 to 8205, put up in sets for retail sale."
The Harmonized Commodity Description and Coding System
Explanatory Notes (EN) constitute the Customs Co-operation
Council's official interpretation of the Harmonized System.
While not legally binding, the ENs provide a commentary on the
scope of each heading of the Harmonized System, and are generally
indicative of the proper interpretation of these headings.
EN 82.06, pg. 1109, states that subheading 8206.00.00,
HTSUS, "covers sets of tools falling at least in two or more of
the headings 82.02 to 82.05 provided they are put up in sets for
retail sale (e.g., in a plastic case or in a metallic tool box)
[emphasis in original]."
If imported separately, the hex key wrenches, flare nut
wrenches, combination wrenches and sockets (in both inch and
metric sizes), would be classified under heading 8204, HTSUS,
which provides for hand-operated spanners and wrenches, socket
wrenches and base metal parts thereof. The punch set and ball
peen hammer would be classified under heading 8205, HTSUS, which
provides for hand tools, not elsewhere specified or included.
While the kits include tools of at least two of the headings
8202 to 8205, HTSUS, they also include articles which are not
covered by these headings, for example, the drive bit sockets,
D.C. tester and tire gauges. However, EN 82.06, pg. 1109, states
that "[s]ets including tools of minor importance from other
headings or Chapters of the Nomenclature remain classified in
this heading, provided that such minority items do not change
their [sic] essential character of sets of tools of two or more
of the headings Nos. 82.02 to 82.05 [emphasis in original]."
It is our opinion that the additional tools are "of minor - 3 -
importance" to the entire kit, and do not change the essential
character of the kit in question. Thus, the tool kits can be
classified under subheading 8206.00.00, HTSUS, if they are "put
up in sets for retail sale."
While the term "goods put up in sets for retail sale" is
defined in the Explanatory Notes to GRI 3(b), pg. 4, the notes
stress that this definition applies only to the classification of
sets under GRI 3(b) ("For the purposes of this Rule . . . ").
Moreover, unlike GRI 3(b) sets, it is unnecessary to perform an
essential character analysis with the sets of subheading
8206.00.00, HTSUS, when determining the rate of duty applicable
to that set. The GRI 1 sets of subheading 8206.00.00, HTSUS, are
not subject to the rate of duty applicable to the subheading of
the material or component which gives the set its essential
character. Rather, the corresponding rate of duty for articles
of subheading 8206.00.00, HTSUS, is the rate applicable to the
article in the set subject to the highest rate of duty.
Based on the terms of heading 8206, HTSUS, as well as a
reading of EN 82.06, it appears that the requirements for a
subheading 8206.00.00, HTSUS, tool set are as follows:
(1) that the set consists of tools of two or more of
headings 8202 to 8205, HTSUS (and, may include
tools of minor importance from other headings if
those tools do not change the essential character
of the set); and
(2) that the tools are put up in a plastic case or in
a metallic tool box for retail sale.
The tool kit in question consists of tools of headings 8204
and 8205, HTSUS, and the tools of other headings do not change
the essential character of the entire set. Further, the tools
are put up in a plastic case for retail sale. Thus, the tool kit
in question is covered by subheading 8206.00.00, HTSUS, which is
not a GSP eligible provision.
HOLDING:
The tool kit is classifiable, according to GRI 1, under
subheading 8206.00.00, HTSUS, which provides for "[t]ools of two
or more of headings 8202 to 8205, put up in sets for retail
sale." The corresponding rate of duty for articles of this
subheading is the duty rate applicable to the article in the set
subject to the highest rate of duty. The articles in the tool
kit subject to the highest rate of duty are the sockets, which
are classifiable under subheading 8204.20.00, HTSUS. The - 4 -
corresponding rate of duty for articles of this subheading, and
therefore, the tool kit, is 9% ad valorem.
The tool kit is not eligible for duty-free treatment under
the Generalized System of Preferences.
Sincerely,
John Durant, Director