Main Idea: GRI 3(b) of the HTSUS and the explanatory notes to the HTSUS control the classification of both goods put up in sets for retail sale, and individual composite goods.  

In ruling N329453 (Dec. 6, 2022), Customs and Border Protection (CBP) discussed the tariff classification of an Outdoor Gift Set and an Axe-Saw from China.  The Outdoor Gift Set, which was imported packaged for retail sale, included the following items:

  • Axe-Saw –  that consisted of a hardened stainless steel, serrated saw blade, attached to a polymer handle.  It also incorporated a stainless-steel hatchet head and a mallet.  A safety sheath was included to cover the hatchet head and saw blade.  The saw blade was noted as capable of cutting branches up to 4” in diameter.
  • Typhoon Match Kit (TMK) – that featured a water-resistant storage chamber with a lid and a strike pad cap.  It included 4” long natural wood matches that were windproof and had water-resistant coating.
  • Zippo Firefast Bellows – that were made of plastic and included an electric motor, an impeller style fan, and a vent to provide air flow for fire starting needs.
  • Tinder Shreds – that were 2” long natural shredded pine tinder shreds.  The tinder shreds had a water-resistant paraffin wax coating and ignited with a spark or flame.

CBP first determined the applicable classification for the Outdoor Gift Set.  CBP noted that the Outdoor Gift Set was imported in a single retail package containing items classifiable under different headings of the Harmonized Tariff Schedule of the United States (HTSUS). 

The General Rules of Interpretation (GRIs) of the HTS govern the classification of merchandise imported into the U.S.  GRI 3 provides, in relevant part, that when “goods are, prima facie, classifiable under two or more headings, classification shall be effected” via GRI 3(a) through GRI 3(c), in hierarchical order.  GRI 3(b) of the HTSUS, which covers goods put up in sets for retail sail, provides the following:

“Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.”

Furthermore, Explanatory Note (EN) X for GRI 3(b) provides the following definition for “goods put up in sets for retail sale:”

“(X) For the purposes of this Rule, the term “goods put up in sets for retail sale” shall be taken to mean goods which :

(a) consist of at least two different articles which are, prima facie, classifiable in different headings. Therefore, for example, six fondue forks cannot be regarded as a set within the meaning of this Rule;

(b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and

(c) are put up in a manner suitable for sale directly to end users without repacking (e.g., in boxes or cases or on boards).”

CBP determined that the Outdoor Gift Set met the criteria of a good put up in a set for retail sale, noting that all the articles in the set were used together to start a campfire. CBP also needed to determine the essential character of the good in order to determine the classification of the set.  EN VIII for GRI 3(b) provides, in relevant part, that the essential character can “be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.”  As such, CBP found that the Axe-Saw imparted the essential character of the Outdoor Gift Set due to the fact that the Axe-Saw predominated by bulk, weight, and value.

CBP also determined the classification of the Axe-Saw when imported without the rest of the above mentioned items.  As noted, the Axe-Saw was composed of different parts (i.e. a handsaw, axe, and mallet), and CBP therefore considered it a composite good, in accordance with GRI 3(b). Similar to the Outdoor Gift Set, CBP needed to determine the essential character of the Axe-Saw.  In this case, CBP determined that the essential character of the Axe-Saw was imparted by the handsaw.

Finding that the handsaw imparted the essential character of the Axe-Saw, which subsequently imparted the essential character of the Outdoor Gift Set, CBP ruled that both items were classifiable under 8202.10.0000, HTSUS, which provides for “handsaws, and metal parts thereof; blades for saws of all kinds (including slitting, slotting or toothless saw blades), and base metal parts thereof: handsaws, and parts (except blades) thereof.”  The general rate of duty was free.

Finally, CBP noted that Chinese-origin goods are typically subject to additional duties under U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, pursuant to the ongoing trade action under Section 301 of the Trade Act of 1974.  As such, unless specifically excluded, items under subheading 8202.10.0000, HTSUS, are subject to an additional 25% ad valorem duty rate.  Therefore, subheading 9903.88.03 needed to have been included in addition to subheading 8202.10.0000, HTSUS.