Sars triumphs in wigs Supreme Court case

It’s been a busy few months for the Supreme Court of Appeal (SCA), with three customs cases already scheduled this year – compared to two for the whole of 2009. The first, heard in February, involved the Commissioner for South African Revenue Service (Sars ) and Fascination Wigs. It related to a dispute in terms of Section 49(9) (a)(i)(aa) of the Customs and Excise Act over whether certain synthetic hair products imported by Fascination Wigs were classifiable under tariff heading 67.03 or tariff heading 67.04 of Schedule No 1, Part 1”. This part of the Act relates to ‘ordinary customs duty’ and tariff heading 67.03 refers to ‘human hair, dressed, thinned, bleached or otherwise worked; wool or other animal hair or other textile materials, prepared for use in the making of wigs or the like’. Tariff heading 67.04 on the other hand refers to ‘wigs, false beards, eyebrows and eyelashes, switches and the like, of human or animal hair or of textile materials; articles of human hair not elsewhere specified or included ’. Earlier this month the SCA upheld an appeal by the Sars Commissioner against a decision of the North Gauteng High Court concerning the correct tariff classification for customs duty purposes of synthetic fibres, stitched as wefts, and used to adorn hair. The high court held that the particular products, imported from the People’s Republic of China, were used in the making of wigs and were therefore not dutiable, not being finished products. The SCA considered, however, that the wefts in question, which are used to create the appearance of a wig by attaching them to a person’s own hair or to the scalp, were not components of a wig, or the like, but finished articles. The fact that expertise and time was needed to attach them to hair or to a scalp did not mean that a new product was made when the final appearance of a wig was achieved. The SCA therefore upheld the Sars’ Commissioner’s contention that the particular wefts should be classified under a tariff heading that attracted customs duty.