Leonie Ferretter and Melissa McCosker discuss the Full Federal Court decision on the customs treatment of vitamins and weight loss supplements marketed as chewable gummies.
The Full Federal Court of Australia (Federal Court) has accepted the assertion that vitamins and weight loss supplements marketed as chewable gummies are classified as medicaments under the Customs Tariff Act 1995 (Cth) and as such, are free of customs duty.
In the original matter, the Administrative Appeals Tribunal (AAT) considered an application to review the tariff classification of two products: pastilles containing vitamins (VitaGummies); and weight loss gummies that contained hydroxycitric acid (Garcinia Gummies). The Comptroller-General of Customs (Customs) argued that the goods should be classified under subheading 1704 (“sugar confectionery”) or 2106 (“food preparations not elsewhere specified or included”), while Pharm-A-Care Laboratories Pty Ltd (Pharm-A-Care) argued that the goods fell within subheading 3004 (“medicaments”). The distinction was significant given that subheadings 1704 and 2106 incur a duty rate of 5 percent and 4 percent respectively, while goods classified to subheading 3004 are duty free.
The AAT held that the VitaGummies products were medicaments on two grounds: firstly, due to the prophylactic and therapeutic properties of the product; and secondly, that vitamin preparations would not ordinarily be considered “food”. More surprisingly, the AAT also held that the Garcinia Gummies that were consumed solely for cosmetic weight loss purposes and not for any therapeutic benefit should also be classified as medicaments. The AAT found that as the Garcinia Gummies did not fit into either heading 1704 or 2106, the goods should be classified to the heading to which the goods were most akin.
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