On 30 March 2021, the South African Revenue Service (SARS) announced the publication of the judgement of Samsung Electronics SA (Pty) Ltd versus the Commissioner for the South African Revenue Service (SARS) as to whether the product should be classified in tariff subheading 8517.62.90 as contended for by the applicant or in tariff subheading 8517.12.90
According to the judgement the applicant, Samsung Electronics SA (Pty) Ltd, seeks an order, in terms of Section 47(9)(e)1 of the Customs and Excise, 1964 setting aside the decision of the respondent, the Commissioner for the SARS made on 11 April 2018, to withdraw a tariff determination in tariff subheading 8517.12.10 and its replacement by tariff determination in tariff subheading 8517.62.90; and costs.
The Judge reached the following conclusion:
The applicant’s assertion that the product is not a telephone for cellular networks but is a machine akin to a laptop or desktop is disingenuous, taking into account that the applicant has conceded that its product has telephony functions. The fact that the product has functions found in laptops and desktops does not detract from its principal function of being a telephone for cellular networks. Mr Nyandoro and Prof Cheng have clearly analysed the design, systems and functions of the product and have in my view correctly concluded that it is a telephone for cellular networks.
Further, as shown by the respondent, the product has all the features which conform with the description of tariff subheading 8517.12.90 in that its hand-handled and that its principal function is telephony. I am not convinced that the product is a machine other than a smartphone. Its usage through the internet does not change its nature and objective characteristics.
I am of the view that the applicant appears to have premised its proposition that the product is not a telephone for cellular networks on the post-usage of the device and not on the criterion as set out in the Komatsu matter (above).
I am further not convinced that the functions of the product straddle between tariff subheading 8517.1 and tariff subheading 8517.6 and that the provisions of General Interpretative Rule 3(c) should applicable.
Having read the documents filed and considered counsel’s submissions, the following order is made: “The application is dismissed with costs”.
The Judgement is available on request.
