The tariff classification of aluminum solar panel rails and rail kits from China

N305694 August 30, 2019 CLA-2-76:OT:RR:NC:N1:113 CATEGORY: Classification TARIFF NO.: 7616.99.5190; 9903.88.03 Mr. Juan C. MorenoZisser Customs Law Group, PC9355 Airway Road, Suite 1San Diego, CA 92154 RE: The tariff classification of aluminum solar panel rails and rail kits from China Dear Mr. Moreno: In your letter dated May 1, 2019, on behalf of your client IronRidge Inc., you requested a tariff classification ruling on aluminum solar panel rails and rail kits. In response to our requests for additional information, this office received answers to our questions in your letters dated June 18, 2019 and August 7, 2019. Descriptive literature and photographs were provided for our review. You stated in your letter that the products under consideration are identified as aluminum solar panel rails and rail kits that are “designed and used exclusively to securely attach and support solar panels in accordance with regulatory building codes applicable to solar power systems on roofs under two different import scenarios.” In scenario #1, IronRidge plans to import bundles of four aluminum rails. In their condition as imported, the aluminum rails are extruded and anodized, and cut to size in 11, 14 and 17 foot lengths. They are shipped in bundles of four that are ready for immediate use and installation. The rails provide the structural background to resist lift, protect against buckling and safely transfer loads into the building structure. The curved shape of the rail increases strength in both directions while resisting twisting. The channels at the top and base of each rail provide the attachment points (via the use of t-bolts placed in the channel) between the rooftop attachments, the panel attachments, and the rail itself. In scenario #2, IronRidge plans to import rail kits that consist of four aluminum rails that are extruded and anodized, and cut to size in 11, 14 and 17 foot lengths together with the addition of eight stainless steel fastening bolts. The purpose of the bolts is to fasten the rail to a splice in order to extend the rails length so that it can accommodate additional solar panels. In your letter, you proposed classifying the aluminum solar panel rails and rail kits under heading 7610, Harmonized Tariff Schedule of the United States (HTSUS), which provides for aluminum structures (excluding prefabricated buildings of heading 9406) and parts of structures (for example, bridges and bridge-sections, towers, lattice masts, roofs, roofing frameworks, doors and windows and their frames and thresholds for doors, balustrades, pillars and columns); aluminum plates, rods, profiles, tubes and the like, prepared for use in structures. This office disagrees. There are several rulings that have set precedent for the classification of solar panel structures. In rulings N163076 and N275032, the solar panel racks were designed to be mounted in the ground and were classified as structures (7308 and 7610, HTSUS). However, in rulings N117635 and N234405, the aluminum or steel solar panel channels, racks and supports that were designed to be mounted on the roof were classified as other articles of aluminum in heading 7616, HTSUS, or other articles of iron or steel in heading 7326, HTSUS. Since the aluminum solar panel rails under consideration are designed to be mounted on a roof, classification in 7610 would not be appropriate. Alternately, you proposed classifying the aluminum solar panel rails and rail kits under heading 8541, HTSUS, which provides for diodes, transistors and similar semiconductor devices; photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light emitting diodes; mounted piezoelectric crystals; parts thereof. However, the aluminum rails and kits are not parts of a solar panel because the panel is complete and finished without these rails. Although the rails and rail kits may be an accessory, heading 8541 does not have an accessory provision. As the aluminum solar panel rails are not parts of a solar panel, classification in 8541 would not be appropriate. Each rail kit contains four aluminum rails and eight stainless steel bolts. The aluminum and stainless steel components are classified in different headings. Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRIs), taken in order. GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. Since no one heading in the tariff schedules covers the aluminum and stainless steel components of the rail kit in combination, GRI 1 cannot be used as a basis for classification. GRI 3(b) provides that mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale shall be classified as if they consisted of the material or component which gives them their essential character. Each rail kit is a set which consists of at least two different articles that are, prima facie, classifiable in different headings. It consists of articles put up together to carry out a specific activity (i.e., to attach and support solar panels on roofs). Also, the articles are put up in a manner suitable for sale directly to users without repacking. Therefore, the rail kits are within the term "goods put up in sets for retail sale”. GRI 3(b) states in part that goods put up in sets for retail sale, which cannot be classified by reference to GRI 3(a), are to be classified as if they consisted of the component which gives them their essential character. EN VIII to GRI 3(b) explains that “the factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or the use of the goods.” We must determine whether the aluminum or stainless steel component imparts the essential character to the kits under consideration. It is the role of the constituent material or component in relation to the use of the good that imparts the essential character. In this case, the aluminum rail is necessary for supporting the solar panel on the roof. For this reason, among two components that merit equal consideration, it is the opinion of this office that the aluminum rails impart the essential character to the set. In accordance with GRI 3(b), the rail kits will be classified in heading 7616, HTSUS, which provides for other articles of aluminum. The applicable subheading for the aluminum solar panel rails and the rail kits will be 7616.99.5190, HTSUS, which provides for other articles of aluminum, other, other…other.  The rate of duty will be 2.5 percent ad valorem. 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. Effective July 6, 2018, the Office of the United States Trade Representative (USTR) imposed an additional tariff on certain products of China classified in the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(b), HTSUS. The USTR imposed additional tariffs, effective August 23, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(d), HTSUS. Subsequently, the USTR imposed further tariffs, effective September 24, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(f) and U.S. Note 20(g), HTSUS. For additional information, please see the relevant Federal Register notices dated June 20, 2018 (83 F.R. 28710), August 16, 2018 (83 F.R. 40823), and September 21, 2018 (83 F.R. 47974). See also “Notice of Action and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation” (June 20, 2018, 83 F.R. 28710). Products of China that are provided for in subheading 9903.88.01, 9903.88.02, 9903.88.03, or 9903.88.04 and classified in one of the subheadings enumerated in U.S. Note 20(b), U.S. Note 20(d), U.S. Note 20(f) or U.S. Note 20(g) to subchapter III shall continue to be subject to antidumping, countervailing, or other duties, fees and charges that apply to such products, as well as to those imposed by the aforementioned Chapter 99 subheadings. Products of China classified under subheading 7616.99.5190, HTSUS, unless specifically excluded, are subject to the 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 7616.99.5190, 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. 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 Ann Taub at ann.taub@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division