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Aggregates and state aid
The European Commission held that the exemption of certain minerals did not constitute state aid in relation to the aggregates levy, since the scope of the levy was justified by the logic and nature of the tax. The British Aggregates Association subsequently sought annulment of that decision.
Aggregates and state aid
The European Commission held that the exemption of certain minerals did not constitute state aid in relation to the aggregates levy, since the scope of the levy was justified by the logic and nature of the tax. The British Aggregates Association subsequently sought annulment of that decision.
In its judgment, the European Court of First Instance rejected the association's pleas. The court said that the European Commission did not commit a manifest error in its assessment of the definition of the scope of the aggregates levy. It noted that an environmental levy is characterised by its environmental objective and its specific tax base. Certain goods or services are taxed so that the environmental costs may be included in their price and/or so that recycled products are rendered more competitive and producers and consumers are pushed towards activities which better respect the environment.
The UK was free to determine, as part of its environmental policy, the minerals used as aggregates which it considered appropriate to tax and to exempt certain other materials. As regards the exemption of exports from the levy, the court held that it is justified by the nature of the levy as an indirect tax.
BAA director Robert Durward comments that the decision 'means continuing the nonsense of adjacent quarries producing virgin aggregate where one pays the tax and the other does not'. However, the association is continuing to campaign to have the levy removed 'as it is not only bad for the environment but is highly discrimatory in nature'.
ECJ press release 74/06 dated 13 September 2006
