I’ve been told if I change the description of my goods I can lower my duty cost. Is that okay?
It depends. You certainly should not simply change the description of your goods on the invoice from your supplier just to get a lower duty rate. However, if you truly feel the new or ‘changed’ description accurately represents your product, then you certainly have a justified case to make the change. Customs is not interested in having you pay the highest duty rate possible. They are interested, and very serious, that you use the correct HTS and pay the correct duty rate for your imported product. Your Customs broker (CHB) can help you determine that.
There are ways to find out in advance if your new or ‘changed’ description is accurate according to Customs, for example, as described in the Harmonized Tariff Schedule of the United States (HTSUS). To help you understand the classification process, Customs has provided an Informed Compliance Publication: What Every Member of the Trade Community Should Know About: Tariff Classification.
Page 37 of that publication, under the heading of “PRE-IMPORTATION (ADVANCE) CLASSIFICATION RULINGS,” explains the process for obtaining this advance, binding ruling based on your detailed description and often a sample of the item in question. Sometimes there are gray areas in determining the correct classification but other times it is very precise where items are very specifically provided for in the HTSUS. That binding classification ‘binds’ Customs – and you – to use it in all U.S. ports of entry.
Because Customs can interpret classifications differently in different ports of entry, C J definitely recommends that you obtain binding rulings for all your imported products. With a binding ruling, you will know in advance what your duty cost will be before you import.
Once again, it’s time to contact your CHB. A quality CHB will help advise you on what to do and how to do it; they can (if they have your power of attorney) prepare and submit the request for a binding ruling on your behalf. If you are C J’s client (or even if you’re not), contact Samya (Sam) Murray at C J. Sam is C J’s Compliance Officer and a founding partner in C J; she has been recognized often for her expertise in the import (and export) process. We implore you to take advantage of her expertise; it can only benefit you.