CLA-2-94:OT:RR:NC:N4:433
Bo James
Lisa Ragan Customs Brokerage
1 Clay Place
Hapeville, GA 30354
RE: The classification and country of origin of Upholstery Kits.
Dear Mr. James:
In your letter dated September 16, 2019, on behalf of your client, Franklin Corporation, Inc., you requested a country of origin ruling on a cut and sewn upholstery kit for furniture. Illustrative literature and a product description were provided for review.
Item 1, identified as the “Cut and Sewn Kit,” is a leather and textile upholstery kit consisting of several leather and textile components that are cut, sewn, shaped, and specifically formed and fitted to the size and shape of furniture frames. The upholstery kit is part of a manufacturing process that, when completed, will result in a final article ready for retail sale.
You request classification of the upholstery kit in subheading 9403.90.6080, Harmonized Tariff Schedule of the United States, (HTSUS), which provides for “Other furniture and parts thereof: Parts: Of textile material, except cotton: Other.” This office disagrees.
The Explanatory Notes (ENs) to the HTSUS constitute the official interpretation of the tariff at the international level. The ENs to Chapter 94 of the HTSUS, “Parts,” state: “This Chapter only covers parts, whether or not in the rough, of goods of heading 9401 to 9403 and 9405, when identifiable by their shape or other specific features as parts designed solely or principally for an article of those headings. They are classified in this Chapter when not more specifically covered elsewhere.” See Headquarters ruling H265042 dated July 18, 2016.
The upholstery kit is a dedicated part of incomplete and unassembled furniture (seats, chairs, couches), and is not more specifically provided for elsewhere in the tariff schedule. Subheading 9401.90, HTSUS, provides for “Seats (other than those of heading 9402), whether or not convertible into beds, and parts thereof: Parts.” Subheading 9403.90, HTSUS, provides for “Other furniture and parts thereof: Parts.” The subheading for seats is more specific to the article under consideration as opposed to the subheading for other furniture and parts.
The applicable subheading for the subject merchandise will be 9401.90.5081, HTSUS, which provides for “Seats (other than those of heading 9402), whether or not convertible into beds, and parts thereof: Parts: Other: Other: Other.” The rate of duty will be free.
Country of Origin
Per your submission, leather hides are sourced from Italy. The leather hides are shipped and exported to China. In China, additional raw materials, such as polyvinyl chloride (PVC) plastic, woven polyester fabric, non-woven polypropylene fabric, zipper chains, zipper sliders, pillow fabric and additional components are locally sourced. In China, cutting of the leather hides and cutting of the additional raw materials to specific shapes and dimensions take place. In China, sewing of the leather hides and sewing of the additional raw materials into upholstery kits also take place. In China, the completed upholstery kit is inspected, packed, and then exported to the United States. Photos of these processes were provided.
Section 134.1(b), Customs Regulations (19 CFR 134.1(b)) defines “country of origin” as the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the “country of origin.” A substantial transformation occurs when articles lose their identity and become articles having a new name, character, or use.
In the instant case, the foreign Italian leather hides and the domestic Chinese raw material components lose their identity during manufacture and undergo a substantial transformation in China to become a leather upholstery kit, thereby, taking on a new name, character, and identity. The country of origin for the leather upholstery kit is conferred in China.
Trade Remedy
Products of China classified under subheading 9401.90.5081, HTSUS, 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 subheading, i.e., 9903.88.03, in addition to subheading 9401.90.5081, HTSUS, listed above. See U.S. Note 20 to Subchapter III, Chapter 99, HTSUS.
The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the Section 301 trade remedy, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively.
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 Dharmendra Lilia at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division