On 2 October 2020, the Lietuvos vyriausiasis administracinis teismas (Lithuanian court) raised a case that is mainly about customs duties and excise. However, this case also triggered the question if the obligation to pay VAT is to be extinguished where smuggled goods are seized and subsequently confiscated after they have already been unlawfully introduced (released for consumption) into the customs territory of the European Union, and the customs debt has been extinguished.
Articles in the EU VAT Directive
Article 2(1)(d) and 70 of Council Directive 2006/112/EC of 28 November 2006
Article 2
1. The following transactions shall be subject to VAT:
(d) the importation of goods.
Article 70
The chargeable event shall occur and VAT shall become chargeable when the goods are imported.
Facts
The appellant, acting in a group of accomplices, organised the unlawful importation (smuggling) of goods subject to excise duty from Belarus into the territory of Lithuania – on 22 September 2016, at a remote location, 6 000 packets of cigarettes (‘the goods at issue’) were thrown across the State border and recovered. Subsequently, the motor vehicle transporting those goods within the territory of the State was forcibly stopped by border officers, and the cigarettes found in the vehicle were seized.
Questions
1. Is Article 124(1)(e) of Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code [OMISSIS] to be interpreted as meaning that a customs debt is extinguished where, in a situation such as that in the present case, smuggled goods were seized and subsequently confiscated after they had already been unlawfully introduced (released for consumption) into the customs territory of the European Union?
2. If the first question is answered in the affirmative, are Articles 2(b) and 7(1) of Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and repealing Directive 92/12/EEC and Articles 2(1)(d) and 70 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax to be interpreted as meaning that the obligation to pay excise duty and/or VAT is not extinguished where, as in the present case, smuggled goods are seized and subsequently confiscated after they have already been unlawfully introduced (released for consumption) into the customs territory of the European Union, even if the customs debt has been extinguished on the ground provided for in Article 124(1)(e) of Regulation (EU) No 952/2013?
AG Opinion
Decision
Personal comments/VATupdate
Source: Curia
Similar ECJ cases
- Dansk Transport og Logistik, C-230/08
- Elshani, C-459/07
- SPKR, C-112/01
- Berel and Others, C-78/10
- Einberger, C-294/82,
- Harry Winston, C-273/12
- Federal Express Corporation, C-26/18
- Commission v Greece, C-590/16
- Eurogate Distribution and DHL Hub Leipzig, C-226/14 and C-228/14
- C-571/15 Wallenborn Transports
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