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| ## Appendix F                                                         |
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### Duty Calculation

  -----------------------------------------------------------------------
  This appendix provides an explanation of duty computation\
  formulas used to calculate line‑item duties.

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Several duty computation formulas are used by the U.S. Customs and
Border Protection (CBP) to calculate line‑item duties. The formulas and
associated computation codes are optional. They are provided here as a
service to users.

The one‑position duty computation code is the equation indicator. This
code is either alphabetic or numeric and indicates which formula is to
be used with the tariff number to compute duty.

A code represents the type of duty rate and quantity used in the
algebraic formula. They are:

> **Code** **Description**
>
> P 1 Indicates specific or primary rate
>
> P 2 Indicates ad valorem or secondary rate
>
> P 3 Indicates other rate usually minimum or other ad valorem
>
> Q 1 Indicates quantity of the 1st unit of measure
>
> Q 2 Indicates quantity of the 2nd unit of measure
>
> Q 3 Indicates quantity of the 3rd unit of measure

The algebraic formulas have been assigned a duty computation code. They
are:

+-----+----------+------------+---------------------------------------+
| # D |          |            |                                       |
| uty |          |            |                                       |
|  Ca |          |            |                                       |
| lcu |          |            |                                       |
| lat |          |            |                                       |
| ion |          |            |                                       |
+-----+----------+------------+---------------------------------------+
| **  | **Name** | **Duty     | **Computation Description**           |
| Cod |          | Equation** |                                       |
| e** |          |            |                                       |
+-----+----------+------------+---------------------------------------+
| 0   | Free     | 0.00       | No Duty.                              |
+-----+----------+------------+---------------------------------------+
| 1   | Specific | P1\*Q1     | The quantity of the first unit of     |
|     | Rate \*  |            | measure is multiplied by the specific |
|     | Q1       |            | or primary rate.                      |
+-----+----------+------------+---------------------------------------+
| 2   | Specific | P1\*Q2     | The quantity of the second unit of    |
|     | Rate \*  |            | measure is multiplied by the specific |
|     | Q2       |            | or primary rate.                      |
+-----+----------+------------+---------------------------------------+
| 3   | Multiple | (P1\       | The quantity of the first unit of     |
|     | Specific | *Q1)+(P3\* | measure is multiplied by the specific |
|     |          | Q2)        | or primary rate. The quantity of the  |
|     |          |            | second unit of measure is multiplied  |
|     |          |            | by the other rate usually minimum or  |
|     |          |            | other ad valorem. The results are     |
|     |          |            | added.                                |
+-----+----------+------------+---------------------------------------+

+-----+----------+------------+---------------------------------------+
| # D |          |            |                                       |
| uty |          |            |                                       |
|  Ca |          |            |                                       |
| lcu |          |            |                                       |
| lat |          |            |                                       |
| ion |          |            |                                       |
+-----+----------+------------+---------------------------------------+
| **  | **Name** | **Duty     | **Computation Description**           |
| Cod |          | Equation** |                                       |
| e** |          |            |                                       |
+-----+----------+------------+---------------------------------------+
| 4   | Compound | (P1\       | The quantity of the first unit of     |
|     | (        | *Q1)+(P2\* | measure is multiplied by the specific |
|     | Specific | Value)     | or primary rate. The value is         |
|     | & Ad     |            | multiplied by the ad valorem or       |
|     | Valorem) |            | secondary rate. The results are       |
|     |          |            | added.                                |
+-----+----------+------------+---------------------------------------+
| 5   | Compound | (P1\       | The quantity of the second unit of    |
|     | (        | *Q2)+(P2\* | measure is multiplied by the specific |
|     | Specific | Value)     | or primary rate. The value is         |
|     | & Ad     |            | multiplied by the ad valorem or       |
|     | Valorem) |            | secondary rate. The results are       |
|     |          |            | added.                                |
+-----+----------+------------+---------------------------------------+
| 6   | Sp       | (P1\*Q1)+  | The quantity of the first unit of     |
|     | ecific + | (P3\*Q2) + | measure is multiplied by the specific |
|     | Compound | (          | or primary rate. The quantity of the  |
|     |          | P2\*Value) | second unit of measure is multiplied  |
|     |          |            | by the other rate usually minimum or  |
|     |          |            | other ad valorem and the value is     |
|     |          |            | multiplied by the ad valorem or       |
|     |          |            | secondary rate. The results are       |
|     |          |            | added.                                |
+-----+----------+------------+---------------------------------------+
| 7   | Ad       | P2\*Value  | The value is multiplied by the ad     |
|     | Valorem  |            | valorem or secondary rate.            |
+-----+----------+------------+---------------------------------------+
| 9   | Derived  | P          | The duty is obtained from a           |
|     |          | 2\*Derived | computation on another tariff number. |
|     |          | Duty       | The other tariff rate is multiplied   |
|     |          |            | by the ad valorem or secondary rate   |
|     |          |            | to obtain the derived duty.           |
+-----+----------+------------+---------------------------------------+
| A   | Fu       | (P2        | The quantity of the third unit of     |
|     | nctional | +P3\*Q3)\* | measure is multiplied by the other    |
|     | Ad       | Value      | rate usually minimum or other ad      |
|     | Valorem  |            | valorem. The result is added to the   |
|     |          |            | ad valorem or secondary rate. The     |
|     |          |            | value is multiplied by the results of |
|     |          |            | the above computation.                |
+-----+----------+------------+---------------------------------------+
| B   | Specific | (P1\*Q2    | The quantity of the second unit of    |
|     | Fu       | )+(P2+P3\* | measure is multiplied by the specific |
|     | nctional | Q3)\*Value | or primary rate. The quantity of the  |
|     | Ad       |            | third unit of measure is multi­plied   |
|     | Valorem  |            | by the other rate usually minimum or  |
|     |          |            | other ad valorem and added to the ad  |
|     |          |            | valorem or secondary rate. The value  |
|     |          |            | is multiplied by the results of the   |
|     |          |            | above computation.                    |
+-----+----------+------------+---------------------------------------+
| C   | S        | (P1\*Q1)   | The quantity of the first unit of     |
|     | pecific/ | or         | measure is multiplied by the primary  |
|     | Specific | (P2\*Q1)   | rate or the secondary rate. The user  |
|     |          |            | must determine which of the two rates |
|     |          |            | is correct.                           |
+-----+----------+------------+---------------------------------------+
| D   | Compound | (P1\*      | The quantity of the third unit of     |
|     | (Sp      | Q3)+(P2\*\ | measure is multiplied by the specific |
|     | ecific + | Value)     | or primary rate. The value is         |
|     | Ad       |            | multiplied by the ad valorem or       |
|     | Valorem) |            | secondary rate. The results are       |
|     |          |            | added.                                |
+-----+----------+------------+---------------------------------------+

+-----+----------+------------+---------------------------------------+
| # D |          |            |                                       |
| uty |          |            |                                       |
|  Ca |          |            |                                       |
| lcu |          |            |                                       |
| lat |          |            |                                       |
| ion |          |            |                                       |
+-----+----------+------------+---------------------------------------+
| **  | **Name** | **Duty     | **Computation Description**           |
| Cod |          | Equation** |                                       |
| e** |          |            |                                       |
+-----+----------+------------+---------------------------------------+
| E   | Sp       | (P1\*Q2)   | The quantity of the second unit of    |
|     | ecific + | +(P3\*Q3)+ | measure is multiplied by the specific |
|     | Compound | (          | or primary rate. The quantity of the  |
|     |          | P2\*Value) | third unit of measure is multiplied   |
|     |          |            | by the other rate usually minimum or  |
|     |          |            | other ad valorem. The value is        |
|     |          |            | multiplied by the ad valorem or       |
|     |          |            | secondary rate. The results are       |
|     |          |            | added.                                |
+-----+----------+------------+---------------------------------------+
| F   | S        | Q1\*(      | The quantity of the second unit of    |
|     | pecific/ | P1+P3\*Q2) | measure is multiplied by the other    |
|     | Pyro     |            | rate usually minimum or other ad      |
|     | technics |            | valorem and added to the specific or  |
|     |          |            | primary rate. The result is           |
|     |          |            | multiplied by the first unit of       |
|     |          |            | measure.                              |
+-----+----------+------------+---------------------------------------+
| J   | S        | Greater of | The greater of two separate           |
|     | pecific/ | Q          | computations is used:                 |
|     | Sugar    | 2\*(P1‑P2\ |                                       |
|     |          | *(100‑Q3)) | 1\) The difference of 100 minus the   |
|     |          | or P3\*Q2  | quantity of the third unit of measure |
|     |          |            | multiplied by the ad valorem or       |
|     |          |            | secondary rate and the result is      |
|     |          |            | subtracted from the primary or        |
|     |          |            | specific rate and this result is      |
|     |          |            | multiplied by the quantity of the     |
|     |          |            | second unit of measure.               |
|     |          |            |                                       |
|     |          |            | 2\) The quantity of the second unit   |
|     |          |            | of measure is multiplied by the other |
|     |          |            | rate usually minimum or other ad      |
|     |          |            | valorem.                              |
+-----+----------+------------+---------------------------------------+
| K   | S        | Greater of | The greater of two separate           |
|     | pecific/ | Q          | computations is used:                 |
|     | Sugar    | 1\*(P1‑P2\ |                                       |
|     |          | *(100‑Q2)) | 1\) R1) The difference of 100 minus   |
|     |          | or P3\*Q1  | the quantity of the second unit of    |
|     |          |            | measure multiplied by the ad valorem  |
|     |          |            | or secondary rate and the result is   |
|     |          |            | subtracted from the primary or        |
|     |          |            | specific rate and this result is      |
|     |          |            | multiplied by the quantity of the     |
|     |          |            | first unit of measure.                |
|     |          |            |                                       |
|     |          |            | 2\) The quantity of the first unit of |
|     |          |            | measure is multiplied by the other    |
|     |          |            | rate usually minimum or other ad      |
|     |          |            | valorem.                              |
+-----+----------+------------+---------------------------------------+
| X   |          | No         | Refer to the Tariff Schedule for duty |
|     |          | c          | computation procedures.               |
|     |          | omputation |                                       |
|     |          | formula    |                                       |
|     |          | available  |                                       |
+-----+----------+------------+---------------------------------------+

#### Classification of Imported Goods

This section describes the separation into component parts of certain
classifications of goods for the purpose of calculating duties. The
calculation of duties on various watches, clocks, watch movements and
clock movements requires that these articles be constructively separated
into their component parts and separately valued by component. The
individual components shall be separately reported under the statistical
suffixes as indicated in chapter 91, U.S. Statistical Note 1,
*Harmonized Tariff Schedule of the United States Annotated* (HTS). In
each instance, the sum of the values of the individual components shall
be equal to the total value of the article.

In those instances where the components of an article are to be
separately reported, the entry should include all the individually named
components even if not included in the shipment. In such instances, the
entered quantity and the value would be zero. For example, entry of a
battery powered watch, imported without a battery, classifiable under
subheading 9101.11.40 would include a line for the statistical reporting
number for the battery (9101.11.4040) with the quantity and value shown
as zero. To determine the proper statistical reporting number(s),
combine the applicable 8‑digit subheading number with the applicable
statistical suffix found in U.S. Statistical Note 1.

Users must transmit the data in proper sequence or their entry should be
rejected. The first statistical reporting number, quantity, and value
should be transmitted on Record Identifiers 40 and 50. The second
statistical reporting number, quantity and value should be transmitted
on Record Identifier 70. The third statistical reporting number,
quantity and value should be transmitted on Record Identifier 80. Record
Identifier 81 is for reporting any numbers beyond three and should be
repeated as necessary. For additional information on Record Identifiers
40, 50, 70, 80, and 81, refer to the Entry Summary chapter of this
document.