Fee for regulated tyres under the Waste Minimisation (Tyres) Regulations 2023

Various questions have been asked in the leadup to the implementation date and below is a list of questions that have been considered.

If you are seeking to clarify what the tariff classification is for your specific tyres, you will need to apply for a Customs ruling.

Where are ATV tyres classified?

An ATV is an all-terrain vehicle.

These types of vehicles are used to transport people but are not motorcars.

Therefore, new pneumatic tyres for these vehicles would be classified under tariff subheading 4011.90. They would then be further classified depending on the tyre tread, rim diameter etc (but they would not fall under any tariff items that relate to light commercial vehicles).

ATV tyre ruling

A Customs Ruling has been made on the classification of ATV tyres and the applicant has given consent for this ruling to be published. The ruling report has been redacted in line with the provisions covered under Section 346(2) of the Customs and Excise Act 2018 for the publication of Customs rulings.

ATV tyre ruling (PDF, 435 KB)

Where are SUV tyres classified?

An SUV is a sport utility vehicle.

These types of vehicles meet the description of being a motor car which is designed for the transport of persons.

Therefore, new pneumatic tyres for these vehicles would be classified under tariff subheading 4011.10.09. They would be further classified depending on the type of ply – radial or bias.

Where are ute tyres classified?

The Working Tariff outlines the differences between motor vehicles that are designed for the transport of goods rather than for the transport of persons.

These features include vehicles that have a gross vehicle weight rating of less than 5 tonnes, which have either a separate closed rear area or an open rear platform are normally used for the transport of goods.

Included in this category of motor vehicles are those commonly known as “multi-purpose” vehicles or pick-up trucks.

This is reinforced by the NZTA/Waka Kotahi definitions which it describes that a vehicle that is constructed for both the carriage of goods and passengers is considered to be primarily used for the carriage of goods if the number of seating positions multiplied by 68kg is less than 50% of the difference between the gross vehicle mass and the unladen mass.

Therefore, new pneumatic tyres for these vehicles would be classified under tariff subheading 4011.20. They would be further classified depending on the type of ply (radial or bias) and internal rim diameter.

Commercial (C) rated and highway /truck and bus tyre ruling

A Customs Ruling has been made on the classification of some examples of commercial (C) rated and highway /truck and bus tyres and the applicant has given consent for this ruling to be published. The ruling report has been redacted in line with the provisions covered under Section 346(2) of the Customs and Excise Act 2018 for the publication of Customs rulings.

Commercial (C) rated and highway truck and bus tyre ruling (PDF 519 KB)

Where are earthmovers, tractors and grader tyres classified?

Earthmovers, tractors and graders can be used in a variety of industry types.

The Working Tariff of New Zealand classifies these types of tyres by type of industry the tyres will be used for.

Tyres that are of a kind to be used (i.e. what they are designed for) on agricultural or forestry vehicles and machines, they would be classified under tariff item 4011.70.00 with the statistical key code that is applicable to the type of tread and rim diameter.

Tyres that are of a kind (i.e. what they are designed for) to be used on construction, mining or industrial handling vehicles and machines, they would be classified under tariff item 4011.80.00 with the statistical key code that is applicable to the type of tread and rim size.

If the tyres are designed for vehicles or machines that equally fall under 4011.70.00 and 4011.80.00, then to resolve the debate the direction given by the General Rules of Interpretation (GRIs) would need to be followed. At this point of time, the view is that when using GRI 6 to identify the correct one-dash subheading it is likely that you would arrive at a scenario where the approach of “specific description vs general description” would not resolve the debate and both 4011.70.00 and 4011.80.00 would appear to have equal merit. Then from the two descriptions that merit consideration it is expected that the one that occurs last in numerical order would be selected (i.e. looking to the approach of GRI 3(c)). This view will be updated if further information comes to light about these goods.

What about vehicle tyres with rims attached – where are these classified?

Tariff heading 87.08 is the tariff heading for the importation of road wheels (pressed steel, wire spoked etc.) whether or not fitted with tyres.

This is on the condition that:

• they must be identifiable as being suitable for use solely or principally with vehicles under tariff headings 87.01 to 87.05.
• They are imported attached to the wheels/rims.

If the imported tyres are not attached to the wheels/rims then they must be classified under the appropriate tariff item under heading 40.11.

Where are trailer tyres classified?

Trailer tyres imported on their own are classified under the type of vehicle that is the same as the tyre being imported. This does not automatically equate to being the same vehicle that you might see towing the trailer. As an example, if a trailer tyre is same as what would be used on a motorcar under 4011.10 regardless of whether that trailer is being towed by a car or a ute, it would still fall under 4011.10.

Trailer tyres with rim/wheels attached

Tariff subheading 8716.90 cover part of trailers and the list of goods covered in the Explanatory Note for this heading covers “wooden or steel wheels and parts thereof, including wheels fitted with their tyres”.

The conditions are similar to those for vehicle tyres with rims, in that:

• they must be identifiable as being suitable for use solely or principally with trailers of heading 87.16.
• They are imported attached to the wheels/rims.

If the imported tyres are not attached to the wheels/rims then they must be classified under the appropriate tariff item.

There are a number of tariff items under headings 40.11 and 40.12 that refer to their use in the assembly of motor vehicles. Can I use these tariff items?

From our understanding the industry has changed since these tariff items were introduced and there is limited assembly remaining in New Zealand (e.g. some special purpose vehicles, some buses). Unless you are able to substantiate that the tyres would fit within those specific tariff items (example: 4011.10.01, 4011.20.03 and 4011.20.07) it would not be appropriate to classify the tyres under those descriptions.

Will the Waste Minimisation (tyre) fee form part of the Customs Value (VFD)

There are too many variations to how a buyer and seller might set up their transaction or other situations that would warrant considering an alternative method of valuation to give an answer that covers every possibility.

If looking at Method 1: transaction value, the primary point that would need to be clarified is whether this fee has been included as part of what the buyer must pay to the seller to receive their goods, e.g. does it form part of the “price paid or payable”.

• If the fee forms part of the “price paid or payable” then there is no allowable deduction that covers this fee. The current view is that this fee is not covered by Clause 7(c)(ii)(C) of Schedule 4 to the Customs and Excise Act 2018 (i.e. Customs duties and other taxes). The outcome is that fee remains part of the amounts that form the Customs value of the imported goods (i.e. would be included in the VFD field).
• If the fee does not form part of the “price paid or payable” then the current view is that there is no required addition that covers this fee. The outcome is that the fee does not form part of the Customs value of the imported goods (i.e. would not be included in the VFD field).

Please refer to the Customs Valuation Guide if further guidance is needed around Customs valuation.

Will administrative penalties be issued if an erroneous classification is entered on imports for loose tyres?

Putting an incorrect tariff item on an entry is listed in the Customs and Excise Act 2018 as being materially incorrect. This has not changed.

If a penalty is issued, the correspondence will include appeal provisions.

If the importer either tells the customs broker, or advises the broker in writing, to use a certain tariff classification, but it is wrong, will the broker get an administrative penalty?

To continue to hold a declarant code, the broker must remain competent and be a fit and proper person. In this case, the broker may be committing offences under the Customs and Excise Act 2018 and be liable to pay an administrative penalty, or face prosecution. The importer may also be complicit and liable.