Question 25
Domain 4: Duty Calculations, Fees, and Trade ProgramsYour client is importing a shipment of blended syrups containing sugars derived from cane sugar with added yellow color but no added flavoring. The blended syrup (sirup) is capable of further mixing and is packaged consistent with the needs of commercial carbonated beverage manufacturers in 30-gallon drums and is not packaged consistent with marketing to the ultimate consumer. The syrup was manufactured in the British Virgin Islands and imported directly from the British Virgin Islands. The merchandise will be properly classified under subheading 2106.90.4400, HTSUS. The quota is open. There are 50 drums total. The net weight of the 50 drums of syrup is 4,770 kilograms. The raw (total) sugar weight is 4,436 kilograms. How much will the estimated duty be?
Correct answer: C
Explanation
Subheading 2106.90.4400 is a sugar-containing beverage base, and the duty is based on the sugar content, not the net weight. Using the raw sugar weight of 4,436 kilograms and the applicable rate for an open-quota import from the British Virgin Islands, the estimated duty comes to $162.38.
Why each option is right or wrong
A. $0.00 because the merchandise is being imported from an insular possession of the United States.
British Virgin Islands origin does not automatically make this shipment duty-free as a U.S. insular possession product.
B. $0.00 because the merchandise is a product of a country designated as a beneficiary country under the Caribbean Basin Economic Recovery Act (CBERA) and the special program indicator of “E*” appears in the Special column of the Column 1 duty rate.
Preference-program eligibility does not override the specific duty treatment applicable to this sugar-containing syrup provision.
C. $162.38
Subheading 2106.90.4400 is dutiable as a sugar-containing beverage base, and when the quota is open the applicable duty is the in-quota rate under the HTSUS for that provision, measured on the raw sugar content rather than the 4,770 kg net syrup weight. Using the 4,436 kg raw sugar weight and the open-quota rate applicable to imports from the British Virgin Islands, the duty computes to $162.38.
D. $174.61
That amount reflects using the wrong dutiable basis or rate rather than the raw sugar weight calculation.