Machine-readable animation files qualify as information technology software, and customs exemption applies despite requiring other software to process them.

Imported motion capture animation files were treated as information technology software for customs exemption purposes because they consisted of data recorded in machine-readable form and could be manipulated by an automatic data processing machine. The SC accepted that industry practice and expert opinion supported characterising the files as software, and held that the need for additional software to process or load them did not alter their essential nature. The broadened wording of the amended exemption notification was sufficient to include such data files within the exemption, so customs duty was not payable.

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Issues: Whether imported motion capture animation files were classifiable as information technology software under the customs exemption notification and therefore eligible for exemption from customs duty.

Analysis: The exemption covered information technology software defined as representation of instructions, data, sound or image recorded in machine readable form and capable of being manipulated by an automatic data processing machine. The imported files were found to be data recorded on tapes, used in animation work, and capable of being interactively modified by software. Expert opinion supported the view that such files were treated in the industry as software and that the fact that another software was required to process or load them did not change their character. The widened wording of the amended notification was held sufficient to include such data files within the exemption.

Conclusion: The imported motion capture animation files were held to be information technology software and entitled to exemption from customs duty.

Ratio Decidendi: Data recorded in machine readable form and capable of manipulation by an automatic data processing machine falls within the exemption for information technology software, even if another software is required to process or use it.

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