CLA-2-94:OT:RR:NC:3:230
Ms. Michelle Jo
Central Purchasing, LLC, dba Harbor Freight Tools
26541 Agoura Road
Calabasas, CA 91302
RE: The applicability of agricultural actual use provisions on greenhouses from China
Dear Ms. Jo:
In your letter, dated August 2, 2016, you requested a tariff classification ruling. The request regards the applicability of agricultural actual use provisions on greenhouses from China. Product information and photos were submitted for our review.
This ruling covers two greenhouses of like construction: a 10’ x 12’ Greenhouse with 4 Vents (SKU 93358) and a 6’ x 8’ Greenhouse (SKU 47712). Both are constructed of aluminum frames with polycarbonate wall and roof panels, and both are sturdy and designed to be anchored to the ground. We note that the greenhouses were previously classified in subheading 9406.00.8020, Harmonized Tariff Schedule of the United States (HTSUS), in New York Ruling N255104, dated August 1, 2014. You currently request whether subheading 9817.00.5000, HTSUS, is applicable, and, if so, what documentation may be submitted in order to prove actual use.
Subheading 9817.00.5000, HTSUS, provides for Machinery, equipment and implements to be used for agricultural or horticultural purposes. The language “to be used” renders this an “actual use” provision, where actual use of the imported goods must be proven to receive the duty benefit. Additional U.S. Rule of Interpretation 1(b), HTSUS, reads:
A tariff classification controlled by the actual use to which the imported goods are put in the United States is satisfied only if such use is intended at the time of importation, the goods are so used, and proof thereof is furnished within 3 years after the date the goods are entered.
First, applicability of subheading 9817.00.5000, HTSUS, to the greenhouses must be determined. Heaquarters Ruling Letter 086211, dated March 24, 1990, originally set forth a three-part test to determine applicability of subheading 9817.00.5000, HTSUS. The following three parts must be met:
1) The articles must not be among the list of exclusions to heading 9817.00.50 or 9817.00.60 under Section XXII, Chapter 98, Subchapter XVII, U.S. Note 2;
2) The terms of heading 9817.00.50 or 9817.00.60 must be met in accordance with General Rule of Interpretation (GRI) 1; and
3) 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).
As noted, the greenhouses are classifiable under 9406.00.8020, HTSUS. This classification does not occur within the list of excluded classifications set forth in Section XXII, Chapter 98, Subchapter XVII, U.S. Note 2. Therefore, the first part of the test is met.
As noted, subheading 9817.00.5000, HTSUS, provides for Machinery, equipment and implements to be used for agricultural or horticultural purposes. The greenhouses must meet these terms in accordance with GRI 1. In the publication entitled “What Every Member of the Trade Community Should Know About: The Agricultural Acutal Use Provisions: Tariff Classification Issues of Heading 9817.00.50 and 9817.00.60 (hereinafter, “AAUP”),” Customs and Border Protection employs definitions set forth in The Merriam-Webster’s Collegiate Dictionary, Tenth Edition (1999). It defines “horticulture” as “(t)he science and art of growing fruits, vegetable, flowers, or ornamental plants.” A greenhouse, by its very nature, is used for horticultural purposes, as it is used for growing plants. The greenhouses also meet the definitions of both “equipment” and “implement”, which are “the set of articles or physical resources serving to equip a person or thing: as the implements used in an operation or activity,” and “a device used in the performance of a task,” respectively. A greenhouse is both equipment and an implement used in the cultivation of plants. Therefore, as the terms of the subheading are met, the second part of the test is met.
Last, the merchandise must meet the actual use conditions set forth in Additional U.S. Rule of Interpretation 1(b) and 19 CFR §§10.131-10.139. Both the Rule and Section 10.133 require the importer to meet the following three conditions:
1) The actual use is intended at the time of importation.
2) The article is so used.
3) Proof of use is furnished within 3 years after the date the article is entered or withdrawn from warehouse for consumption.
Section 10.134 provides that proof of intended use “shall be made by filing with the entry for consumption or for warehouse a declaration as to the intended use of the merchandise, or by entering the proper subheading of an actual use provision of the Harmonized Tariff Schedule of the United States (HTSUS) and the reduced or free rate of duty on the entry form.” This is to say that merely entering the greenhouses under the 9817.00.5000, HTSUS, provision on entry documentation demonstrates an intent of entering the merchandise for horticultural use, provided that the Port Director is satisfied that the merchandise will be so used.
Section 10.138 outlines the requirement for providing proof of actual use of the greenhouses. Generally, it requires that a certification of use be
executed by (1) the superintendent or manager of the manufacturing plant, or (2) the individual end-user or other person having knowledge of the actual use of the imported article. The certificate shall include a description of the processing in sufficient detail to show that the use contemplated by the law has actually taken place.
However, you indicate that Harbor Freight Tools sells the greenhouses to retail consumers. Customs and Border Protection recognizes the difficulty of showing actual use for retail goods and discussed this in the AAUP publication:
…importation of these articles, such as planters, could not feasibly be certified as to their actual use in accordance with the demanding statutory language. These articles are of the type which are imported in large shipments and then distributed to numerous wholesale or resale distributors. A certification by the importer which states that the article(s) may only be used for the agricultural or horticultural use for which they are intended may be accepted at the time of importation. The importer should be made aware that any knowledge of any other use should be brought to the attention of CBP.
The abovementioned certification can be submitted to Customs at time of importation. Section 10.138 provides that blanket certifications may also be accepted. The marketing materials and website reviews you reference in your request would serve as additional support for your certification. Thus, provided that certification is submitted in accordance with 19 CFR 10.138, the third part of the test will be met and 9817.00.5000, HTSUS will be applicable.
The applicable subheading for the greenhouses will be 9406.00.8020, HTSUS, which provides for Prefabricated buildings: Other: Of metal: Greenhouses: Other. The rate of duty will be 2.9 percent ad valorem.
Machinery, equipment and implements to be used for agricultural or horticultural purposes are provided for under the special classification provision of subheading 9817.00.5000, HTSUS. Upon compliance with the actual use requirements of Section 10.131-139 of the Customs Regulations, the greenhouses would be classifiable in subheading 9817.00.5000, HTSUS, and would be free of duty.
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, contact National Import Specialist Laurel Duvall at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division