On October 18, 2022, the ECJ received a request for preliminary ruling from Romania (Case ECJ C-657/22 (Bitulpetrolium Serv)).
Context:
Article in the EU VAT Directive
Articles 2, 250 and 273 of Directive 2006/112/EC
Article 2 (Taxable transactions)
1. The following transactions shall be subject to VAT:
(a) the supply of goods for consideration within the territory of a Member State by a taxable person acting as such;
(b) the intra-Community acquisition of goods for consideration within the territory of a Member State by:
(i) a taxable person acting as such, or a non-taxable legal person, where the vendor is a taxable person acting as such who is not eligible for the exemption for small enterprises provided for in Articles 282 to 292 and who is not covered by Articles 33 or 36;
(ii) in the case of new means of transport, a taxable person, or a non-taxable legal person, whose other acquisitions are not subject to VAT pursuant to Article 3(1), or any other non-taxable person;
(iii) in the case of products subject to excise duty, where the excise duty on the intra-Community acquisition is chargeable, pursuant to Directive 92/12/EEC, within the territory of the Member State, a taxable person, or a non-taxable legal person, whose other acquisitions are not subject to VAT pursuant to Article 3(1);
(c) the supply of services for consideration within the territory of a Member State by a taxable person acting as such;
(d) the importation of goods.
Article 250 (Returns)
1. Every taxable person shall submit a VAT return setting out all the information needed to calculate the tax that has become chargeable and the deductions to be made including, in so far as is necessary for the establishment of the basis of assessment, the total value of the transactions relating to such tax and deductions and the value of any exempt transactions.
2. Member States shall allow, and may require, the VAT return referred to in paragraph 1 to be submitted by electronic means, in accordance with conditions which they lay down.
Article 273 (Miscellaneous provisions)
Member States may impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, subject to the requirement of equal treatment as between domestic transactions and transactions carried out between Member States by taxable persons and provided that such obligations do not, in trade between Member States, give rise to formalities connected with the crossing of frontiers.
The option under the first paragraph may not be relied upon in order to impose additional invoicing obligations over and above those laid down in Chapter 3.
Facts
- SC BITULPETROLIUM SERV SRL, a company involved in the production and wholesale of solid, liquid and gaseous fuels and derived products […], brought an action before this Regional Court against the defendant ADMINISTRAȚIA JUDEȚEANĂ A FINANȚELOR PUBLICE PRAHOVA [-] DIRECȚIA GENERALĂ REGIONALĂ A FINANȚELOR PUBLICE PLOIEȘTI (‘the tax authority’), challenging the obligation to pay the amounts of 310 309 Romanian Lei (RON), by way of additional excise duty on diesel and biodiesel, and RON 65 901, by way of additional value added tax, and seeking annulment of the notification of tax liability of […] 7 August 2020.
- Following the tax audit of SC BITULPETROLIUM SERV SRL, the tax audit report […] of 28 April 2018 and the notification of tax liability of […] 7 August 2020 were drawn up and the applicant was required to pay the amounts of RON 310 309, by way of additional excise duty on diesel and biodiesel, and RON 65 901, by way of additional value added tax […].
- According to the tax audit report and the notification of tax liability, the applicant is in possession of [a] certificate of registration for the distribution and wholesale of energy products without storage […] issued by Biroul Vamal Prahova (Customs Office, Prahova) on 5 December 2016.
- Furthermore, the audited establishment serves as a warehouse for the production of energy products subject to harmonised excise duty on the basis of an authorisation to operate a tax warehouse […] dated 30 September 2013, issued by the Comisia pentru autorizarea operatorilor de produse suspuse accizelor armonizate din cadrul Ministerului Finanțelor Publice (Commission for the authorisation of dealers of products subject to harmonised excise duty at the Romanian Ministry of Finance) and valid until 1 October 2018.
- From the audit on a sample basis of the supply documents and accounting records submitted by the audited company, it emerged that SC BITULPETROLIUM SERV SRL […] had issued certificates of receipt and variation and cancellation invoices, by which it reintroduced into the tax warehouse a total of 238 382 kg of fuel for industrial chimneys and BP type liquid fuel, without sending written notification to the competent local customs authority.
- The tax authority also pointed out that between June 2014 and December 2017, SC BITULPETROLIUM SERV SRL […] issued certificates of receipt and variation and cancellation invoices for a total of 238 383 kg, in which it made no mention of the marking and colouring of the energy products being returned, nor their purpose. In addition, for the energy products reintroduced […] into the tax warehouse, the audited company failed to notify the Biroul Vamal de Interior Prahova (Inland Customs Office, Prahova) in writing of the decision not to accept
the energy products, as provided for in Article 206(2) of Legea nr. 571/2003 privind Codul fiscal (Law No 571/2003 establishing the Tax Code), as amended and supplemented, in force until 31 December 2015, and also in Article 400(4) of Legea nr. 571/2003 privind Codul fiscal (Law No 227/2015 establishing the Tax Code), in force since 1 January 2016. - In its application, the applicant claimed, in essence, that during its operations […] it had discovered that the products sold had not been accepted on account of product quality issues or because the energy products sold were not suitable for customers’ heating systems. Consequently, of the total quantity of energy products sold, for which excise duty was paid at the time of release for consumption, […] less than 1.5% was returned by the customers for whom the products were originally intended, to be subsequently sold to other customers.
- The energy products are usually transported to customers in sealed tankers and accompanied by proof of marking and colouring, proof of payment of excise duty, the inspection report, the declaration of conformity, the weighing receipt, and so forth. The customer would take a sample of the delivered energy product once it reached its destination and examine it to check that it could be used in its thermal power plant. If the product did not present the necessary characteristics, the customer would ask to return the product and cancel the invoice; the tanker containing the energy product for which payment had been refused would return to the warehouse, together with all the abovementioned supporting documents, and remain there until another customer could be identified to whom the goods might be delivered.
- The applicant points out that no refund of the excise duty was requested for any of the products when they were returned to the warehouse. Furthermore, it had not notified the customs authorities of the return of the energy products since none of the cases provided for by the Tax Code and the procedural rules requiring such notification applied, namely: where a refund of the excise duty had been requested
and where the products had been returned for recycling, repackaging or disposal. - The supervisory authorities equate the failure to notify the reintroduction into the warehouse of the energy products originally delivered to customers with the storage, transportation and sale of such unmarked and uncoloured products without payment of excise duty, alleging an infringement of the provisions of Article 400(4) of Law No 227/2015 establishing the Tax Code, which provides that, ‘for products subject to excise duty reintroduced into the tax warehouse, the excise duty paid may be refunded’.
- In its defence, the defendant tax authority claimed that the applicant had introduced into the tax warehouse 143 622 kg of energy products from goods returned by various customers on the basis of 10 cancellation invoices, invoices in which the returned energy products were described as liquid fuel for industrial chimneys.
- The defendant also argued that the energy products returned and introduced into the tax warehouse were subsequently sold without being marked and coloured, despite the fact that the tax legislation prohibits the sale of unmarked and uncoloured or incorrectly marked and coloured energy products, establishing the liability of the taxpayer in such cases, including non-compliance with the obligations regarding tax audit arrangements and procedures [missing text].
Questions
- 1. Are national provisions and practices such as those at issue in the present case, according to which the reintroduction into a tax warehouse of a heating fuel (heating oil) in the absence of a customs inspection [constitutes] an alleged infringement of the warehousing procedure justifying the application of excise duty at the rate fixed for gas oil – a fuel whose excise duty is more than 21 times higher than the excise duty on heating oil – contrary to the principle of proportionality and to Article 2(3), Article 5 and Article 21(1) of Directive 2003/96/EC[?]
- 2. Are national provisions and practices such as those at issue in the present case, according to which VAT is charged on additional amounts determined by the tax authority by way of excise duty on gas oil as a penalty for non-compliance with the customs supervision arrangements of the taxable person, as a result of the taxable person reintroducing into the warehouse energy products of the heating oil type, on which excise duty had already been paid, and which have been refused by customers and remain intact and [in storage] until a [new] buyer is identified, contrary to the principle of proportionality, the principle of neutrality of VAT and Articles 2, 250 and 273 of Directive 2006/112/EC?
AG Opinion
Decision
Summary
Source
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