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U.S. Federal Circuit affirms tariff classification of LED candles

Tariff classification of LED candles

The U.S. Court of Appeals for the Federal Circuit today affirmed a decision of the U.S. Court of International Trade concerning the proper tariff classification of imported candles that generate light using battery-operated LEDs.

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The case is: Gerson Co. v. United States, 2018-1011 (Fed. Cir. August 6, 2018). Read the Federal Circuit’s decision [PDF 130 KB]

The imports at issue were decorative candles and tea light lamps made of plastic or wax, but unlike ordinary candles, use battery-operated LEDs to generate light. The importer claimed the imported candles were subject to a customs duty rate of 2% ad valorem under Harmonized Tariff Schedule of the United States (HTSUS) 8543.70.70 as “electric luminescent lamps.” CBP however, liquidated the imports under HTSUS 940540.80 as “other electric lamps and lighting fittings: other” at a customs duty rate of 3.9% ad valorem.

The trade court agreed with CBP and granting summary judgment in favor of the government.

Today, the Federal Circuit affirmed. The appeals court noted that the scope of heading 8543 must be read in context of the HTSUS as a whole, and with this reading, it becomes clear that the imported candles belong in the heading 9405 (rather than heading 8543) or otherwise, heading 8543 would be read to apply to every electric lamp because all lamps use electricity to generate light.

For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich
Partner, Global Practice Leader
T: 312-665-1022
E: dzuvich@kpmg.com

Andy Siciliano
Partner, National Practice Leader
T: 631-425-6057
E: asiciliano@kpmg.com

Irina Vaysfeld
Principal
T: 212-872-2973
E: ivaysfeld@kpmg.com

Robert Waldrop
Principal
T: 212-954-8117 
E: rwaldrop@kpmg.com

Christopher Young
Principal
T: 312-665-3229
E: christopheryoung@kpmg.com

George Zaharatos
Principal
T: 404-222-3292
E: gzaharatos@kpmg.com

John L. McLoughlin
Principal, East Coast Leader
T: 267-256-2614
E: jlmcloughlin@kpmg.com

Luis (Lou) Abad
Principal, WNT
T: 212-954-3094
E: labad@kpmg.com

Amie Ahanchian
Managing Director
T: 202-533-3247
E: aahanchian@kpmg.com

Gisele Belotto
Managing Director
T: 305-913-2779
E: gbelotto@kpmg.com

Andy Doornaert
Managing Director
T: 313-230-3080
E: adoornaert@kpmg.com

Jessica Libby
Managing Director
T: 612-305-5533
E: jlibby@kpmg.com

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