Area: Poslovni SOS
Competent authority: MF
EZU URL: .nan
Initiative ID: 595
Initiative accepted and completed: '2015-06-23'
Initiative classified in EZU: .nan
Initiative forwarded in response: '2015-06-09'
Initiative published: '2015-06-09'
Initiative submitted: '2015-06-05'
Response from the competent authority: 'RESPONSE FROM THE MINISTRY OF FINANCE - FINANCIAL
  ADMINISTRATION OF THE REPUBLIC OF LITHUANIA:With regard to the proposal submitted
  (Initiative 595) to remove administrative burdens in the field of excise duties,
  we provide below a summary of the whole case. We would like to point out that the
  entire procedure was conducted in compliance with the applicable excise duty rules.
  Company X Ltd (hereinafter referred to as ''the company'') is the holder of an exempt
  user authorisation number 4230-1380/2007-5 dated 20.11.2007. Under the Exempt User
  Licence, the company is authorised to purchase denatured ethyl alcohol 96 % vol.
  (TO 2207 20) under a duty suspension arrangement and to use it as a raw material
  in its production. The exempt user licence in question also states, in point 9 of
  the operative part, that the holder of the licence is obliged to submit an application
  for the following period before the expiry of the period for which he has been authorised
  to purchase excise goods free of excise duty and that changes to the quantities
  during the period to which the licence relates and to the authorisation of the quantity
  for the following period may be made on the basis of a subsequent application. Thus,
  on 21.12.2010, the company purchased denatured ethyl alcohol 96,20 % vol. from the
  supplier Y d.d. (hereinafter referred to as the supplier) on the basis of a licence
  for an exempt user of excisable products. The company only delivered a notification
  - correction of the order form - to the supplier on 30.3.2011 (the order form of
  9.12.2010 for the purchase of denatured ethyl alcohol in the quantity of 291,38
  hL). In the corrected order, the company informed the supplier that for part of
  the quantity of denatured ethyl alcohol ordered (4 312 litres), the company had
  not yet used up the authorised quantity of excisable products that it could purchase
  in 2010 without excise duty, whereas the supplier should charge the corresponding
  amount of excise duty on the remaining quantity (24 826 litres of ethyl alcohol)
  in excess of the authorised quantity. On 1 March 2011, the supplier issued an invoice
  to the company, on which it charged excise duty in the amount of EUR 238 826,12.
  The supplier calculated and paid excise duty on the 24 826 litres of ethyl alcohol
  on the basis of the self-assessment procedure (Article 55 of the Tax Procedure Act,
  Official Gazette of the Republic of Slovenia, No. On 3 January 2012, the company
  personally submitted to the Ljubljana Customs Office (CU LJ) a request for reimbursement
  of the excise duty paid on the basis of Article 30(4)(1) of the Excise Duties Act
  (Official Gazette of the Republic of Slovenia, No. 97/10 - Official consolidated
  text, 48/12, 109/12 and 32/14) for denatured ethyl alcohol (24 826 litres) purchased
  on 21 December 2010 and consumed in 2011, namely for quantities of denatured ethyl
  alcohol exceeding the authorised quantities of excise duty-free purchases for 2010.
  In the course of the verification of the eligibility for the refund of excise duty,
  CU LJ established that the purchase (on 21.12.2010, under invoice number 29350576)
  of 24.826 litres of denatured ethyl alcohol did not include excise duty in the price.
  Therefore, the excise duty on the 24 826 litres of ethyl alcohol was not paid (paid
  to the budget) by the supplier, but only later, on 15 April 2011, on the basis of
  a self-assessment. The CU LJ thus found that the company did not fulfil the condition
  for reimbursement of excise duty (Article 30(4)(1) of the ITA), since no excise
  duty was charged on the purchase of denatured ethyl alcohol, since the excise goods
  were purchased in accordance with an order placed by the company, which ordered
  and received them as an exempt user of excise goods, i.e. under a duty suspension
  regime. Thus, on 12 April 2012, by decision No DT 42301-92/2012-10, the CU LJ rejected
  the company''s claim for reimbursement of the 2011 excise duty on 23,882.61 litres
  of denatured ethyl alcohol with an alcohol content of 100 % vol, finding, as explained
  above, that it was not well-founded. On 26.4.2012, the company, through the Law
  Firm d.o.o., lodged an appeal against the decision of the CU LJ No DT 42301-92/2012-10
  of 12.4.2012, which was rejected by the Ministry of Finance (the second instance
  authority) by Decision No DT-498-3-47/2012-2 of 10.7.2012. The appellate authority
  also held that the company, which has the status of an exempt user, was justified
  in not being granted the right to reimbursement of excise duty on the basis of Article
  30(4)(1) of the ITA, since that provision cannot, by its nature, apply to an exempt
  user of excisable products, since only such users operate under a duty suspension
  regime in accordance with the law and on the basis of a licence. The company, acting
  through the Law Firm d.o.o., filed a lawsuit with the Administrative Court of the
  Republic of Slovenia in Ljubljana against the decision of the CU LJ No. DT 42301-92/2012-10
  of 12 April 2012 in relation to the decision of the Ministry of Finance No. DT 498-3-47/2012-2
  of 10 July 2012. By judgment No I U 1245/2012-11 of 7 May 2013, the Administrative
  Court of the Republic of Slovenia in Ljubljana dismissed the action against the
  decision of the CU LJ No DT 42301-92/2012-10 of 12 April 2012. In the view of the
  Administrative Court of the Republic of Slovenia, the reasons given by the second-instance
  authority for the contested decision are correct. The Supreme Court of the Republic
  of Slovenia, by judgment No X Ips 234/2013 of 19 December 2013, dismissed the company''s
  appeal against the judgment of the Administrative Court of the Republic of Slovenia
  in Ljubljana No I U 1245/2012-11 of 7 May 2013. The Court of Review (the Supreme
  Court of the Republic of Slovenia) also held that the substantive law was correctly
  applied in the present case. Since the company had the status of an exempt user
  for the purchase of such excise goods at the time of purchase of the excise goods
  on the basis of a licence issued by the customs authority, according to the Supreme
  Court of the Republic of Slovenia, the company was also obliged to act only in that
  capacity for the purchase of such excise goods. It further explains that the fact
  that the exempted user exceeded the quantities authorised in the exempted user''s
  licence did not terminate his status as an exempted user, since his licence had
  not been terminated (Article 28 of the ITA), but he could not be exempted from payment
  of excise duty in respect of those quantities pursuant to Article 12(3)(2) of the
  ITA. Since the company had the status of an exempt user, the Supreme Court of the
  Republic of Slovenia concludes that the company cannot be granted the right to reimbursement
  of excise duty on the basis of Article 30(4)(1) of the ITA, since that provision
  cannot, by its very nature, apply to an exempt user of excisable products, since
  only such users operate under a duty suspension regime in accordance with the law
  and on the basis of a licence. Therefore, the Court of First Instance also held
  that the company was not entitled to the reimbursement of excise duty under Article
  30(4)(1) of the Customs Tariff Act. In the light of the foregoing, no unlawfulness
  of the specific administrative act has been established in the present case, and
  the Financial Administration of the Republic of Slovenia is therefore not in a position
  to change its position with regard to the decision taken, which has also been confirmed
  by the judgment of the Administrative Court. We would point out that, as a body
  of the State administration, we are bound by the legal provisions in force and are
  therefore bound by the principle of legality. However, we are aware that the current
  regime of the Excise Duty Act with regard to the status of exempt user has often
  proved to be unviable or rigid in practice, given the specificities of the exempt
  user''s business and the unpredictable economic situation. It is for this reason
  that we have proposed an amendment in this area, which would allow an exempt user,
  who is primarily engaged in the business of excisable products under a duty suspension
  arrangement, to purchase these products outside the duty suspension arrangement,
  i.e. with excise duty charged, under the conditions to be laid down in the Excise
  Duties Act. The proposed amendment to the Law is currently under consideration by
  the Ministry of Finance.NOTE from the Ministry of Public Administration:The publication
  of the proposed amendment can be followed at: http://www.mf.gov.si/si/delovna_podrocja/davki_in_carine/predlogi_predpisov/ODZIV
  MINISTRY OF FINANCE:The company raises an example regarding the treatment of a request
  for reimbursement of excise duty under the Excise Duties Act (Official Gazette of
  the Republic of Slovenia, No. 97/10 - Officially consolidated text, 48/12, 109/12
  and 32/14; hereinafter referred to as the Excise Duties Act), in connection with
  a decision issued by the then Customs Administration of the Republic of Slovenia
  in 2012. The company, which had been granted an exempt user licence by the customs
  authority allowing the holder of the licence to purchase excise goods without excise
  duty, purchased excise goods with excise duty paid, for which the customs authority
  did not grant an excise duty drawback. With regard to the above case, we would like
  to point out that the Ministry of Finance is not competent to intervene in the legal
  proceedings that have been conducted in respect of the case. The amendment of the
  legislation, as we state in the following paragraph, will not provide retroactivity
  that would solve the above-mentioned problem of the company.In our reply to the
  Chamber of Commerce and Industry of Slovenia in 2013, which represented the company
  in question, we explained that the institution of an exempt user of excisable products
  is adequately regulated in the legislation in such a way as to allow for proper
  supervision of the correct implementation of the excise legislation, the institute
  of an exempt user is of an optional nature, and for the holder of the licence it
  means the fulfilment of the rights and obligations arising from the content of the
  licence issued. As we note inconsistencies in the implementation of the legislation
  as regards the issues raised, we have already drafted an amendment to this effect,
  which will be proposed in the framework of the new Excise Act to be submitted for
  consideration later this year.'
Text file: 595.txt
Title: Excise duty and exempt user
URL: https://www.stopbirokraciji.gov.si/pobuda/?st=595
