Croatia: Excise duty chargeable on basis of fictitious supply of excise goods incompatible with EU law (CJEU General Court judgment)
First preliminary ruling issued by General Court
The General Court of the Court of Justice of the European Union (CJEU) today held (case T-534/24) that Croatian legislation under which excise duty is chargeable on the basis of a fictitious supply of excise goods appearing on falsified invoices is incompatible with EU law.
Summary
As explained in a CJEU release:
- Following a tax inspection, the Croatian authorities found that a trader had erred in deducting value added tax (VAT) on the basis of falsified invoices relating to supplies of petroleum products which had, in fact, never taken place. In accordance with national legislation, the customs authorities required the excise duty to be paid on the grounds that the trader had committed an abuse of rights in moving excise goods.
- The trader brought an action before a Croatian court, which referred the question to the General Court of whether the imposition of excise duty was compatible with EU law.
- The General Court held that the imposition of excise duty in this case was incompatible with EU law because excise duty becomes chargeable when goods are released for consumption, and the EU Excise Duty Directive lays down an exhaustive list of those release situations. In this case, excise duty was imposed on account of an abuse of rights, involving the use of falsified invoices even though the petroleum products were not supplied, which does not fall within those situations.
Background on jurisdiction of General Court
Jurisdiction to give preliminary rulings was transferred to the General Court on October 1, 2024, in six specific areas—(1) the common system of value added tax (VAT), (2) excise duties, (3) the Customs Code, (4) the tariff classification of goods under the combined nomenclature, (5) compensation and assistance to passengers in the event of denied boarding or delay or cancellation of transport services, and (6) the system for greenhouse gas emission allowance trading. Since that date, 55 preliminary ruling cases have been transmitted to the General Court. This is the first preliminary ruling issued by the General Court.