Western Baltija Shipbuilding Set to Recover Excise Duty on Bunkers, Court Rules

Friday July 14, 2017

The Court of Justice of the European Union (CJEU) has ruled that Lithuania's Vakaru Baltijos Laivu Statykla (Western Baltija Shipbuilding) should recover excise duty paid for bunkers supplied to a freight ship it built in 2013, Baltic media reports.

Specifically, the court found that the return of the excise duty is not in violation of an EU directive that sets out an excise waiver for bunkers used for commercial navigation.

The vessel, which was delivered to an unnamed Estonian company in June 2013, is reported to have had 73,000 litres of fuel onboard following ship testing.

Upon delivery, the ship travelled unladen from the Port of Klaipeda to Stralsund, Germany before receiving commercial cargo.

Western Baltija Shipbuilding requested the return of the excise duty for fuel through the State Tax Inspectorate in July of 2013, but the application was rejected, with Lithuania's Supreme Administrative Court then turning to the EU Court of Justice to review the ruling.

The court determined that the trip from Klaipeda to Stralsund was a navigation operation.

"The exemption laid down by that provision applies to fuel used to sail a ship, without cargo, from a port of a member-state, in the present case that where that ship was built, to a port of another member-state in order to take on cargo to be transported to a port of a third member-state," said the Court of Justice.

The court further highlighted Lithuania's requirement for a permit to bunker ships.