Federal Court Goes Crackers Over Product Classification and Warehouse Licensee Liabilities

Many importers may not be aware of how product classification is determined for taxation purposes. Further many warehouse licensees may overlook their absolute liability for customs duty for products stored within their premises. The recent Federal Court decisions of Lansell House Pty Ltd –v– Commissioner of Taxation [2010] FCA 329 and Pearce –v– Coynes Management Group Pty Ltd [2010] FCA 320 respectively provide clarification of these issues.

Lansell House Pty Ltd v Commissioner of Taxation [2010] FCA 329

Facts

This case concerned a dispute between the importers of a product known as Mini Ciabatte and the Commissioner of Taxation regarding the classification of said product for GST-purposes. In brief, Mini Ciabatte is a dry 'Italian Flat Bread' on which cheese or antipasto is placed. Under the relevant tax legislation whilst plain bread is a GST-free supply, crackers and biscuits are non-GST free supplies.