CLA-2-84:OT:RR:NC:N2:206
Randy Rucker
Faegre Drinker Biddle & Reath, LLP
191 N. Wacker Drive, Suite 3700
Chicago, Illinois 60606
RE: The tariff classification of a hydraulic motor from China
Dear Mr. Rucker:
In your letter dated June 26, 2020, you requested a tariff classification ruling and application of duty-free provision in subheading 9817.00.50, Harmonized Tariff Schedule of the United States (HTSUS) on behalf of your client, Danfoss LLC.
The product under consideration is a Bent Axis Hydraulic Motor (Item Number H1B), which is an 80 cubic centimeters (cc) motor designed to be used in a self-propelled agricultural sprayer. The self-propelled agricultural sprayers are used to apply water and chemical solutions to crops, such as fertilizers, pesticides, and etc. The sprayers feature wide spraying booms, narrow wheels/tires, high under-axle clearance, and high travel speeds, which make them a staple for row crops like corn and soybeans.
You state that the hydraulic motor is the critical power to ground element of the self-propelled system used in the agricultural sprayers. The motor is paired with a hydrostatic pump to create an infinitely variable transmission that enables advanced performance ranging from high torque to high-speed propulsion, which have become the staple of modern, efficient farming. The motor converts hydrostatic pressure/flow from the variable pump into rotating speed/torque to turn the sprayer’s wheels. This action provides basic propel functions (forward/reverse travel, start/stop, etc.) for the sprayer.
The applicable subheading for the Bent Axis Hydraulic Motor (Item Number H1B) will be 8412.29.8045, HTSUS, which provides for “Other engines and motors, and parts thereof: Hydraulic power engines and motors: Other: Other: Unlimited rotary acting: Axial piston type.” The rate of duty will be Free.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8412.29.8045, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.01, in addition to subheading 8412.29.8045, HTSUS, listed above.
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 trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, 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.
In your submission, you also request that the hydraulic motor be considered for duty-free treatment as an agricultural or horticultural machinery under subheading 9817.00.50, HTSUS, which provides for “Machinery, equipment and implements to be used for agricultural or horticultural purposes.”
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).
Heading 8412, HTSUS is not among the excluded headings described in Section XXII, Chapter 98, Subchapter XVII, U.S. Note 2. Thus, the first part is met.
The second part of the test is better described in the Informed Compliance Publication (ICP) of 2015 on Agricultural Use Provision. In Part 2-Heading Text, it states, “For [sub]heading 9817.00.50, HTSUS, this means that the good must be ‘machinery’, ‘equipment’ or ‘implements used for ‘agricultural or horticultural purposes’.” Further, the ICP offers definitions by which CBP applies the 9817.00.50 provision. We define agriculture as “the science, art, and practice of cultivating the soil, producing crops, and raising livestock,” and horticulture as “the science and art of growing fruits, vegetables, flowers, or ornamental plants.”
The hydraulic motor under consideration by itself does not directly perform any of the above activities. Only when installed into the sprayer, the hydraulic motor enables the sprayer to operate in an agricultural or horticultural pursuit; however, it is the sprayer that is a machinery used for agricultural or horticultural purposes, while the hydraulic motor is merely a component part of the sprayer. Accordingly, the hydraulic motor is not a machinery used for “agricultural or horticultural purposes,” and does not qualify for the duty-free provision under subheading 9817.00.50, because this subheading does not provide for component parts of such machinery.
Such parts may be eligible for the duty free provision under subheading 9817.00.60, HTSUS, but only if these parts are used in the machinery of headings 8432, 8433, 8434 or 8436 HTSUS. Please note, this subheading includes goods “whether or not such parts are principally used as parts of such articles” and “whether or not covered by a special provision within the meaning of additional U.S. Rule of Interpretation 1(c).”
However, the agricultural sprayers, which the hydraulic motor is used with, are not classified within any of the headings described by terms of subheading 9817.00.60. As a result, the hydraulic motor is not eligible for the duty-free provision under subheading 9817.00.60 either.
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, please contact National Import Specialist Liana Alvarez at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division