Re:  HTSUSA Chapter 82 - Additional U.S. Note 3

Tools, knives, and other cutlery are commonly sold in sets.  Different items
in the set carry different duty rates.  The duty on the set is determined by
the article in the set that carries the highest duty rate.  This information is
transmitted as a dual HTS number.  The primary number is the sets classification
itself, the secondary number is the HTS number of the article in the set
that produces the highest duty rate.

Sometimes this is straightforward, but often, in this section of the tariff,
HTS numbers have compound duty rates.  In this example it is not
immediately obvious which item has the higher rate:

8211.92.9045  has a rate of $0.004/each + 6.1%
8211.93.0030  has a rate of $0.03/each + 5.4%

You must determine the 'ad valorem equivalent' duty rate for each item in
the set, figure out which is the highest, then apply that rate to the entire set.

I am not making this up.

Step 1 -  Apply the specific or compound duty rate against the full value of the
merchandise and the total quantity.

For this example:

8211.92.9045 has a compound rate of $.004 each + 6.1%.

            .004 x 20000 pieces    =    $   80.00
            $24000 @ 6.1%          =    $ 1464.00
            Total                  =    $ 1544.00

8211.93.0030 has a compound rate of $.03 each + 5.4%

            .03 x 20000 pieces     =    $  600.00
            $24000 @ 5.4%          =    $ 1296.00
            Total                  =    $ 1896.00

Since 8211.930030 produces the higher rate this is the one you must use for
the entire set.

Step 2 - Take the duty arrived at in Step 1, and divide it by the full value of the
merchandise.

            1896.00 divided by $24000 =  0.079 or 7.9%

This is the ad valorem equivalent.  Now that you've figured this out, here is how
you prepare this type of entry.

Log the file as usual.

Go to the worksheet.  Enter the sets classification, total value, and total pieces.  Make
sure that the I/O field shows 'I'.  When you press enter, you will be asked if a secondary
HTS number is required.

Place the cursor on the sets classification line then press F8 to open the worksheet
line item detail screen.

Enter the HTS data for the item in the set that determines the duty.  Show 'O' in the I/O
field to omit the value from the invoice total.  Press Enter, then F1 to return to the main
worksheet screen.

Calculate the file using F7.  Go to the 7501 Master Data screen.

Place the cursor on the appropriate line then press F8 to go to the 7501 Line Item
Detail screen.

Press F8 again to open the Duty Computations screen.

Place the cursor on the duty rate line in the lower left hand portion of the screen.  Press
F8 to delete the rate that was calculated by the Worksheet calc.

Answer 'Y' to the 'OK TO DELETE RATE?' question.  Now you have to enter the ad valorem
equivalent rate.

Enter '0' in the CASE field and '000' in the TYPE field, then press F9 to expand the rate.
Enter the total value in the VAL/QTY field, the ad valorem equivalent rate in the RATE
field then press enter.  Press F1 to return to the 7501 Line Item Detail screen.

Delete the value in the secondary HTS number.  Press Enter then F1 to return to the
7501 Master Data screen.

Recalculate the totals with the F9 key.  Use Shft F4 to upload.