Tariff determination – common sense?

The latest case of CSARS versus Colgate-Palmolive (Pty) Ltd (528/09) [2010 ZA SCA 98] (3 September 2010) does not raise anything new regarding the principles of tariff determination. The case confirms the principles laid down in the Thomas Barlow and Sons Ltd case that classification is a three stage process: ascertaining the meaning of the words in the headings and section notes; then considering the nature and characteristics of the goods; and finally determining which heading is most appropriate. The first two processes are closely linked, since one needs to understand the nature and characteristics of the goods to be classified before one can consider which headings or notes are most appropriate. The correct order of the stages should be to first consider the nature and characteristics of the goods and only then the meaning of words in headings, section notes and the like. The case also highlights the fact that classification may turn on technical aspects. It may be necessary to obtain an expert opinion as to the correct nature of the goods. The case in question revolved around whether one of the ingredients constituted a “preparation”. Ultimately, the goods were classified on the basis that it did. Importers are therefore cautioned that, when in doubt, do not simply choose the heading with the cheapest rate of duty. Make sure of the correct tariff heading since the consequences are very serious if you get it wrong and far more costly than if you had obtained the necessary advice or opinion at the outset.