Some complementary medicines might now attract duty, as classification of vitamins and food supplements changes

In response to the High Court's decision in Comptroller-General of Customs v Pharm-A-Care Laboratories Pty Ltd [2020] HCA 2, the Government has passed legislation amending the classification of vitamins and food supplements to ensure that vitamin gummies, weight loss gummies and similar products will be classified as food preparations or food supplements rather than medicaments .

The Australian Government has enacted the Customs Tariff Amendment (Incorporation of Proposals and Other Measures) Act 2021 to amend the Customs Tariff Act 1995.

As a result additional notes will be inserted in Schedule 3 of the Act to clarify the classification of vitamins and food supplements and clearly distinguish between:

• products that contain vitamins or are dietary or other supplements; and
• products that are considered medicaments by reason of their inclusion in Schedule, 2, 3, 4 or 8 of the current Poisons Standard (as that term is defined in the Therapeutic Goods Act 1989).

The Government has stated that it considers the outcome of Comptroller-General of Customs v Pharm-A-Care Laboratories Pty Ltd (Pharm-A-Care) to be inconsistent with international tariff classification practice used by other countries and the World Customs Organisation (WCO).  The Government believes international tariff classification practice used by other countries and the WCO requires medicaments to be medicines that treat or prevent particular diseases.

The practical effect of the amendments will be to require vitamin gummies, weight loss gummies and similar products to be classified as food preparations or food supplements rather than medicaments, unless another more specific classification applies.

The changes will commence on 29 March 2021 and will apply to goods imported into Australia on or after that date and  goods imported into Australia before that date, where the time for working out the rate of import duty on the goods had not occurred before that date.

Sponsors of complementary medicines and importers of vitamin and food supplements are encouraged to review their portfolio and consider whether they might now be required to pay duty as a result of the changes.

If you have any questions about the implications of these changes or would like advice on these issues, please contact Clayton Utz.

Note: Clayton Utz acted for Pharm-A-Care Laboratories Pty Limited in Comptroller-General of Customs v Pharm-A-Care Laboratories Pty Ltd.