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Supreme Court upheld position of the State Tax Service in case of the PJSC “Philip Morris Ukraine”

, published 26 April 2021 at 16:33

Conclusion of the courts of first and appellate instance on the cancellation of additionally accrued tax liabilities for the PJSC “Philip Morris Ukraine” was found premature by the Supreme Court.

The PJSC “Philip Morris Ukraine” appealed to the court to cancel additionally accrued tax liabilities from the excise tax totaling 13.6 million UAH, substantiating claim by the fact that tobacco products with excise stamps were damaged as a result of a fire with 100% loss of their quality.

Courts of the first and appellate instance satisfied claims of the PJSC “Philip Morris Ukraine” in case № 2a-9900/12/2070, noting that cigarettes damaged during a fire were not subject to sale or any other use with absent object of the excise duty taxation.

The Supreme Court ruled that the courts’ decision was premature, cancelled decisions of courts of previous instances and remanded the case for retrial, noting that Paragraph 27 of the Regulation as of 23.04.2003 № 567 provides that in case of establishing the lack of stamps (destruction, theft) the manufacturer’s materially responsible person is materially liable in the amount of stamps and the estimated amount of excise duty, which the manufacturer must pay to the budget given sales of products for which stamps were purchased.

Courts of previous instances did not check circumstances regarding compliance of the PJSC “Philip Morris Ukraine” with requirements of Regulation 567 when writing off and disposing of damaged excise stamps or taking any active action in order to comply with these regulations; also interrogation wasn’t carried out as witnesses of persons who were members of the commission established for the purpose of conducting an official investigation regarding the fire.


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