CLA-2-85:OT:RR:NC:N2:220
9903.88.03
Meghann Supino
Ice Miller LLP
One American Square
Suite 2900
Indianapolis, IN 46282-0200
RE: The tariff classification of timers and controllers from China
Dear Ms. Supino:
In your letter dated March 1, 2021 you requested a tariff classification ruling on behalf of your client, BFG Supply Co.
The first item under consideration is identified as the Grower Select 8-Outlet Power Strip with Mechanical Timer (8-Outlet Power Strip with Mechanical Timer), Item Number BNC-U1, which is described as a power strip with a built-in timer and surge protection. The 8-Outlet Power Strip with Mechanical Timer has four timed outlets and 4 always-on outlets, with indicator lights for each type. The timer has 15-minute increment pins, and a timer override switch is provided. A lighted power switch located on the side of the power strip also acts as circuit breaker/reset. The power strip is designed for grow rooms or green houses when multiple small devices are required, including but not limited to fans, pumps, portable A/C. It expands wall outlets while controlling hydroponic equipment with built-in timers and protecting the electronic components of the system with surge protection.
The second item under consideration is identified as the Grower Select Fan Speed Controller (Fan Speed Controller), Item Number BNQ-31, which is described as a three-position controller with a single electrical socket output. The Fan Speed Controller consists of an enclosed printed circuit board assembly PCBA and the electrical socket. Mounted onto the PCBA is a rotary potentiometer, a fuse, and various electrical components that function to adjust the speed of a fan. Based on the information provided, the Fan Speed Controller operates on 125 VAC at 4.8 A.
The third item under consideration is identified as the Grower Select Digital Temp Controller Thermostat (Thermostat), Item Number BNQ-T7B. The Thermostat has a temperature reading in Celsius or Fahrenheit displayed on a small LCD screen, three buttons (set, up and down), heating and power led lights, a power cord, a thermistor for reading temperatures and a plug receiver for the device. In operation, the user would plug in the device they are looking to regulate the temperature of, which could include heat mats, aquarium heaters, fans and lights ranging up to 1000W. The device cannot handle any item with a compressor including air conditioning units, refrigerators, or water-cooling dispensers. The device will monitor the parameters input by the user and turn the device on or off depending on those settings.
The fourth item under consideration is identified as the Grower Select 24-hour Mechanical Timer (24-hour Mechanical Timer), Item Number BND-60-U39N, which is described as a single electrical socket with a built-in motorized timer. The 24-hour Mechanical Timer has 96 non-detachable 15-minute trippers, a synchronous timer and can be configured in numerous timing schedules. You state that the timer enables the grower to run pumps, fans and other components of the hydroponic system automatically.
The fifth item under consideration is described as the Grower Select Repeat Cycle Timer (Repeat Cycle Timer), Item Number BND-60/U97, which is described as a controller having a single electrical socket output, two dial switches (each having on/off functions), and a photosensor. In operation, the Repeat Cycle Timer is plugged into an existing electrical socket and an electrical device is attached. The user would select the on/off times based on dial placement or via the photosensor, as desired. Based on the information provided, the Repeat Cycle Timer operates on 125 VAC at 15 A.
In your request, you propose the 8-Outlet Power Strip with Mechanical Timer is correctly classified under 9107.00.8000, Harmonized Tariff Schedule of the United States (HTSUS). We agree.
The applicable subheading for the 8-Outlet Power Strip with Mechanical Timer will be 9107.00.8000, HTSUS, which provides for time switches with clock or watch movement or with synchronous motor: Valued over $5 each. The rate of duty will be 45 cents each plus 6.4 percent ad valorem plus 2.5 cents per jewel.
In your request, you propose the Fan Speed Controller is correctly classified under subheading 8537.10.9170, HTSUS. We agree.
The applicable subheading for the Fan Speed Controller will be 8537.10.9170, HTSUS, which provides for “Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of 8535 or 8536, for electric control or the distribution of electricity…: For a voltage not exceeding 1,000 V: Other: Other: Other”. The general rate of duty will be 2.7 percent ad valorem.
In your request, you propose the Thermostat is considered a programmable controller and should be classified under subheading 8537.10.9160, HTSUS. We disagree.
The General Rules of Interpretation (GRIs) to the Harmonized Tariff Schedule of the United States (HTSUS) govern the classification of goods in the tariff schedule. GRI-1 states, in pertinent part, "For legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes . . . ." In addition, although not dispositive, the Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level and facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and the GRIs.
The ENs to heading 8537, HTSUS, which describe programmable controllers, state in pertinent part that “Programmable controllers are digital apparatus using a programmable memory for the storage of instructions for implementing specific functions… to control… various types of machines.” Further, we would note HQ H242032, citing HQ H008421, determined that a programmable controller’s ultimate purpose is to control output devices by reading input signals from sensors and deciding what the outputs should be based on the machine’s program logic. As the Thermostat is not a digital apparatus that uses programmable memory, subheading 8537.10.9160, HTSUS, is not appropriate.
The applicable subheading for the Thermostat will be 9032.10.0090, HTSUS, which provides for “Automatic regulating or controlling instruments and apparatus; parts and accessories thereof: Thermostats: Other.” The general rate of duty will be 1.7%.
In your request, you suggest the 24-hour Mechanical Timer is correctly classified under subheading 9107.00.4080, HTSUS. We agree.
The applicable subheading for the 24-hour Mechanical Timer will be 9107.00.4080, HTSUS, which provides for time switches with clock or watch movement or with synchronous motor: Valued not over $5 each...Other. The rate of duty will be 15 cents each plus 4 percent ad valorem plus 2.5 cents per jewel.
In your request, you suggest the Repeat Cycle Timer is considered a programmable controller and should be classified under subheading 8537.10.9160, HTSUS. We disagree.
As stated previously, programmable controllers of subheading 8537.10.9160, HTSUS, require programmable memory for the storage of instructions. They are recognized as digital apparatus that receive input signals and control output devices based on the machine’s program logic. Based on the information provided, the Repeat Cycle Timer does not incorporate programmable memory and is not considered digital apparatus. As a result, classification under subheading 8537.10.9160, HTSUS, is not appropriate.
The applicable subheading for the Repeat Cycle Timer will be 8537.10.9170, HTSUS, which provides for “Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of 8535 or 8536, for electric control or the distribution of electricity…: For a voltage not exceeding 1,000 V: Other: Other: Other”. The general rate of duty will be 2.7 percent ad valorem.
In your request, you suggest that the subject merchandise is also eligible for classification under subheading 9817.00.50, HTSUS, which provides for “Machinery, equipment and implements to be used for agricultural or horticultural purposes.” CBP has consistently held that an article must meet the following three-part test to qualify for the duty exemption in subheading 9817.00.50, HTSUS:
The articles must not be among the long list of exclusions to heading 9817.00.50 or 9817.00.60 under Section XXII, Chapter 98, Subchapter XVII, U.S. Note 2;
The terms of heading 9817.00.50 or 9817.00.60 must be met in accordance with GRI 1; and
The merchandise must meet the actual use conditions required in accordance with sections 10.131-10.139 of the Customs Regulations (19 CFR §§10.131-10.139).
See, e.g., HQ H186956, dated June 27, 2014. “If a good fails any part of the test it is treated according to its primary classification.” See id.
With respect to the first criterion, as discussed above, the Fan Speed Controller and the Repeat Cycle Timer are both provided for under subheading 8537.10.9170, HTSUS. This subheading is excluded from classification in subheading 9817.00.50, HTSUS, by Section XXII, Chapter 98, Subchapter XVII, U.S. Note 2 (u). The balance of the merchandise under consideration here are prima facie classified in subheadings 9032.10.0090, 9107.00.8000, and 9107.00.4080, HTSUS and are not precluded from classification in subheading 9817.00.50, HTSUS, by Section XXII, Chapter 98, Subchapter XVII, U.S. Note 2 (z) or (aa).
The second criterion requires that the subject merchandise satisfy the terms of subheading 9817.00.50, HTSUS, in accordance with the General Rules of Interpretation. Therefore, the subject article must be “machinery,” “equipment,” or “implements” with a sufficient nexus to an “agricultural” or “horticultural” activity. See Informed Compliance Publication (ICP), What Every Member of the Trade Community Should Know About: The Agricultural Actual Use Provisions, CBP Publication # 0494-0316, September 2015. For this part of the test, the initial determination to be made is to identify what agricultural or horticultural pursuit is being performed. It is the importer's position that the thermostat and the two timers are used for indoor gardening and hydroponic system control. However, we would note that the timers and the thermostat are likely employed for numerous uses that are not agricultural or horticultural in nature, and none of the information provided establishes their use beyond to whom the products may be sold.
Lastly, when considering the third criterion, the merchandise must meet the actual-use provisions set forth in 19 CFR 10.131-10.139. Under these provisions, when the tariff classification of an article is controlled by its actual use in the United States, three conditions must be met to qualify for free entry or a lower rate of duty:
such use is intended at the time of importation;
the article is so used, and;
proof of use is furnished within 3 years after the date the article is entered or withdrawn from warehouse.
See 19 C.F.R. § 10.133. It is the decision of this office that at the time of importation, the subject electrical articles do not satisfy the actual use prerequisites. The importer does not articulate the actual use of the products as horticultural or agricultural, which is the legislative intent for this duty exemption. Based on the foregoing, the 8-Outlet Power Strip with Mechanical Timer, the Thermostat, and the 24-hour Mechanical Timer, are not eligible for duty exemption under subheading 9817.00.50, HTSUS.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8537.10.9170, 9107.00.8000 and 9107.00.4080, 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., 9903.88.03, in addition to subheading 8537.10.9170, 9107.00.8000 and 9107.00.4080, HTSUS, listed above.
Products of China classified under subheading 9032.10.0090, 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 9032.10.0090, 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 https://www.cbp.gov/trade/remedies/301-certain-products-china
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 Karl Moosbrugger at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division