CLA-2 OT:RR:NC:N1:102
Gary D. Colip
iAIRE, LLC
8122 Dean Road
Indianapolis, Indiana 46240
RE: The classification of incomplete air conditioning systems and outdoor units from China.
Mr. Colip:
In your letter dated April 27, 2022, you requested a ruling on the classification of incomplete air conditioning (AC) systems and outdoor units.
The AC systems are described as incomplete mini-split systems that consist of indoor and outdoor units. For the mini-split AC systems that cool non-residential environments, 0.75-, 1.0-, 1.5- and 2.0- ton outdoor units are paired with an indoor unit using refrigerant piping and insulation. The model numbers of the units are the following: ZMSB-12CVD110-US, ZMSB-09CVD-US, ZMSB-12CVD-US, ZMSB-18CVD-US, and ZMSB-24CVD-US. For mini-split systems that can cool or heat non-residential environments, 0.75-, 1.0-, 1.5-, 2.0-, 2.5-, and 3.0- ton outdoor units are paired with an indoor unit using refrigerant piping and insulation. The model numbers of the units are the following: ZMSB-09HVD110-US, ZMSB-12HVD110-US, ZMSB-09HVD-US, ZMSB-12HVD-US, ZMSB-18HVD-US, ZMSB-24HVD-US, ZMSB-30HVD-US, and ZMSB-36HVD-US.
The indoor unit of the mini-split systems is designed to be wall-mounted and primarily consists of an outer housing, an evaporator, and a fan. The outdoor unit primarily features an outer housing, a compressor, a heat exchange component, and a fan/motor assembly. The outdoor units with heat pumps are used in the AC systems that can cool or heat spaces. Once imported, a solar panel and electrical controls are installed onto the outdoor units.
Classification of merchandise under the Harmonized Tariff Schedule of the United States (HTSUS) is made in accordance with the General Rules of Interpretation (GRIs) 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 the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may be applied, taken in order.
GRI 2(a), HTSUS states, “Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled.”
The outdoor units with and without the heat pump have the essential character of complete condenser units.
Accordingly, the applicable subheading for the outdoor units that incorporate a heat pump will be 8415.90.8065, HTSUS, which provides for Air conditioning machines, comprising a motor-driven fan and elements for changing the temperature and humidity, including those machines in which the humidity cannot be separately regulated; parts thereof: Parts: Other: Other: Of heat pumps. The general rate of duty is 1.4 percent ad valorem.
The outdoor units without the heat pump have the essential character of complete condenser units. The applicable subheading for the incomplete AC condenser units without the heat pump will be 8415.90.8085, HTSUS, which provides for Air conditioning machines, comprising a motor-driven fan and elements for changing the temperature and humidity, including those machines in which the humidity cannot be separately regulated; parts thereof: Parts: Other: Other: Other. The general rate of duty is 1.4 percent ad valorem.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheadings 8415.90.8065 and 8415.90.8085, HTSUS, unless specifically excluded, are subject to an additional 7.5 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.15, in addition to subheadings 8415.90.8065 and 8415.90.8085, HTSUS, listed above. The tariff is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Notice cited above and the applicable Chapter 99 subheading.
In regard to indoor unit and incomplete mini-split systems that cool or cool and heat residences, please submit the following information: Please clarify whether you are requesting a classification for the system, the indoor unit or both. Provide part or model numbers for the systems. Will the systems be imported complete and ready for retail sale? List all the items that will be imported. Will the systems incorporate dehumidifying features? Are the indoor units complete, and ready for retail sale? If not, identify the components that will be added to the indoor unit by name. Explain how each component functions. Provide a clear cutaway drawing of the actual units. Submit clear pictures, photographs and drawings illustrating the units from all angles.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. Part 177).
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. You should also be aware that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
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 Sandra Martinez at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division