Chapter Notes are the legal text found at the beginning of each Chapter in the Harmonized System (HS) of tariff nomenclature. They are the most ignored yet most legally powerful part of classifying machinery. If you classify your goods based only on the descriptions in the tariff table (the headings) without reading the Chapter Notes, you are likely doing it wrong.
User’s Guide to the Tariff
The HS code book is divided into Chapters.
- Chapter 84: Nuclear reactors, boilers, machinery, and mechanical appliances.
- Chapter 87: Vehicles other than railway or tramway rolling stock. This seems simple: A tractor is a vehicle, so it goes in 87? An excavator is machinery, so it goes in 84? The Chapter Notes dictate the boundary lines.
- Example: Note 2 to Chapter 87 might say, “This chapter does not cover…” and list specific types of mobile machinery that must go in Chapter 84.
- Example: A Section Note might define exactly what constitutes a part versus an accessory.
Exclusion Notes
Chapter notes function as Exclusionary Notes. They tell you what is not included. For heavy equipment, this is critical for parts. If you are shipping a rubber belt for a conveyor, you might try to classify it under Chapter 84 as a part of a conveyor.
However, a Chapter Note in Chapter 84 explicitly excludes conveyor belts of vulcanized rubber and directs you to Chapter 40 (Rubber).
Chapter 84 parts might be duty-free. Chapter 40 rubber goods might have a 5% duty. If you use the wrong code because you skipped the notes, you are liable for fines and back taxes.
Legal Precedence
In a dispute with Customs, the Chapter Notes hold legal weight. You cannot argue, “But it looks like a vehicle!” if Note 4 clearly defines it as machinery based on its function. Always read the notes at the start of the Chapter before picking a code for your yellow iron.
