CLA-2-61:OT:RR:NC:N3:361
Laura Oliver
A.N. Deringer
173 West Service Road Champlain, NY 12919 United States
RE: The tariff classification of women’s knit T-shirts and caps from Canada and eligibility under subheading 9802.00.50, HTSUS
Dear Ms. Oliver:
In your letter dated December 13, 2022, you requested a classification and eligibility under subheading 9802.00.50, Harmonized Tariff Schedule of the United States (HTSUS), for hats and women’s knit t-shirts imported into the United States, on behalf of your client, Avid Apparel. Your samples will be returned to you, as requested.
The submitted samples are a cap and an upper body garment similar to a T-shirt. The baseball style cap is constructed of 65 percent cotton, 35 percent polyester woven fabric. You state the foreign origin caps and T-shirts are purchased by Avid Apparel from suppliers in the United States in blank design and exported to Canada where customer selected text and graphics (embellishment operations), are performed. After the operations are performed in Canada, the garments will be returned to the United States for sale and distribution.
The baseball style cap is composed of six panels of knit and woven fabric. The two front panels are constructed of 65 percent cotton and 35 percent polyester woven fabric. The remaining panels are constructed of polyester mesh, which has been observed to be of knit fabric. The cap features two eyelets on the front panels, a fabric covered button on the top of the crown, a peak and an adjustable closure on the back.
The T-shirt is constructed from 65 percent cotton, 35 percent polyester jersey knit fabric. The garment features a round rib knit neckline, a screen print logo at the left chest, long sleeves with rib knit cuffs, a large screen print design on the back panel, and a straight, hemmed bottom. You also state that the garment will be imported in a blank design (no embellishment).
The baseball style cap is prima facie classifiable under two subheadings. Neither the polyester knit fabric (6505.00.60) nor the cotton woven fabric (6505.00.20) imparts the essential character of the cap. Therefore, the cap will be classified in accordance with GRI 3(c) under the subheading that occurs last in numerical order in the, HTSUS.
The applicable subheading for the baseball style cap (blank and silk-screen printed), will be 6505.00.6090, HTSUS, which provides for “Hats and other headgear, knitted or crocheted, or made up from lace, felt or other textile fabric, in the piece (but not in strips), whether or not lined or trimmed; hair-nets of any material, whether or not lined or trimmed: Other: Other: Of man-made fibers: Knitted or crocheted or made up from knitted or crocheted fabric: Not in part of braid: Other: Other: Other.” The rate of duty will be 20 cents per kilogram plus 7 percent ad valorem.
The applicable subheading for the long-sleeved T-shirt (blank and silk-screen printed), will be 6109.10.0070, HTSUS, which provides for “T-shirts, singlets, tank tops and similar garments, knitted or crocheted: Of Cotton: Women’s or Girls’: Other: Other. The rate of duty will be 16.5 percent ad valorem.
Subheading 9802.00.50, HTSUS, provides a partial or complete duty exemption for articles exported from and returned to the United States after having been advanced in value or improved in condition by repairs or alterations, provided that the documentary requirements of Section 181.64, Customs Regulations (19 C.F.R. § 181.64), are satisfied.
19 C.F.R. § 181.64 (a) states that “repairs or alterations” means restoration, addition, renovation, redyeing, cleaning, resterilizing, or other treatment which does not destroy the essential characteristics of, or create a new and commercially different good from, the good exported from the United States. However, entitlement to this tariff treatment is precluded in circumstances where the operations performed abroad destroy the identity of the exported articles or create new or commercially different articles through a process of manufacture.
Subheading 9802.00.50, HTSUS, treatment is also precluded where the exported articles are incomplete for their intended use and the foreign processing operation is a necessary step in the preparation or manufacture of finished articles. Furthermore, the merchandise must be in compliance with the pertinent legal notes of the HTSUS. For example, Section XXII, Chapter 98, Subchapter II, U.S. Note 1(b) states that heading 9802 HTSUS shall not apply to any article exported with benefit of drawback (other than NAFTA drawback).
In this instance, the cap and T-shirt are complete for their intended use prior to being exported to Canada to undergo the stated operations. As exported from the United States, the garments are finished products in that they are suitable for use as wearing apparel. Although the operations performed in Canada alter the appearance of the garments, such operations do not otherwise
enhance the character of the garments. They are shipped to Canada solely for printing before being returned to the United States.
The merchandise in its condition as exported from the United States and as returned from Canada can be marketed and sold to consumers for the same use. The operations performed in Canada do not result in the loss of the good’s identity nor create a new article with a different commercial use. Therefore, the operations performed in Canada constitute acceptable repairs and alterations within the meaning of subheading 9802.00.50, HTSUS. The cap and T-shirt will qualify for the special tariff treatment of that provision, when returned from Canada provided that the documentary requirements of 19 C.F.R. § 181.64 are met.
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 at https://hts.usitc.gov/current
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection 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 Antoinette Peek-Williams at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division