Vitamins Classified as a food or medicament it's off to the High Court

 

Vitamins – Classified as a food or medicament – it's off to the High Court

In late 2018 the Full Federal Court ruled that VitaGummies should be classified as a duty free medicament and not as food.  The Full Federal Court also held that weight loss gummies that contained garcinia cambogia should also be classified as a medicament.

The decision was important as it widened the scope of goods that could be treated as a duty free medicament rather than a food.  This was particularly the case with the garcinia gummy that was classified as a medicament even though it was found to have no therapeutic benefits.

The Comptroller-General has applied to the High Court for leave to appeal the decision.  The right to have a matter heard by the High Court is not automatic and the High Court will only hear matters of public importance.

Following a hearing on 17 May 2019 the High Court has agreed to hear the matter.  Reasons for the decision to grant leave were not given.  However, the amount of customs duty at issue and the difficulties with administering the Full Federal Court decision were raised by Customs.
The appeal will review both the decision regarding the VitaGummies and the garcinia gummies.

It will take time for the hearing to be held and then further time for a judgement to be delivered.  We expect that the final outcome will be known in 6-12 months.

Of course, if Customs loses the appeal, it could push for the Customs Tariff Act to be amended so that there is no doubt as to the classification or duty treatment of vitamins.  It is highly likely that such a legislative change would only apply to future imports.

Past importers of vitamins and other edible health products should review imports in 2015 that attracted duty and consider whether refund applications should be lodged now on the basis on the Full Federal Court decision.  If those importers wait for the outcome of the High Court case, the 4 year refund time limit will have expired.

Future imports are more difficult. Customs clearly disagrees with the Full Federal Court decision and we understand that tariff advices are being issued stating that vitamins should be classified as food.  It would appear that the expectation of Customs is that importers continue to pay duty and seek refunds should the decision of the Full Federal Court be upheld.