SUMMARY OF ALTERATIONS

CUSTOMS TARIFF PROPOSAL (No. 5) 2022

Reasons for changes: To provide a ‘Free’ rate of customs duty to new imported electric passenger motor vehicles

Date of effect: 1 July 2022

Alterations to the Customs Tariff Act 1995

The Australian Government is committed to increasing the affordability of electric cars. To implement this measure, the applicable rate of customs duty has been reduced for electric passenger motor vehicles that have a customs value that is less than the Luxury Car Tax threshold for fuel-efficient vehicles that applies at the time of working out the rate of import duty on the vehicle.

The alterations proposed insert new tariff subheadings 8703.60.12, 8703.70.12, 8703.80.12 and 8703.90.12 in Chapter 87 of Schedule 3 of the Customs Tariff Act 1995. Goods classified to these subheadings will be eligible for a ‘Free’ rate of customs duty. New Additional Note 6 has been inserted into Chapter 87 to direct the classification of goods to these tariff subheadings.

Passenger motor vehicles of the following types may be classified to the new subheadings:

· Vehicles with a spark-ignition or compression-ignition internal combustion piston engine and electric motor for propulsion, that are capable of being charged by being plugged to an external source of power

· Vehicles with only an electric motor

· Vehicles with an electric motor for propulsion and another engine other than a spark-ignition or compression-ignition internal combustion piston engine, that are capable of being charged by being plugged to an external source of power.

In addition to the reduction in the general rate of customs duty for these passenger motor vehicles, the preferential rate of customs duty for these goods, where they are Regional Comprehensive Economic Partnership originating, within the meaning of Division 1N of the Customs Act 1901, will be ‘Free’.

The ‘Free’ rate of customs duty for these goods applies starting on 1 July 2022.