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Goltsblat BLP Persuades Russian Supreme Court that Adjustment of Import VAT Deductions is Unlawful

Goltsblat BLP Persuades Russian Supreme Court that Adjustment of Import VAT Deductions is Unlawful

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Goltsblat BLP has won a dispute in the Supreme Court of Russia for Wine Brandy Plant Alliance-1892 LLC against Russia’s Federal Tax Service’s Inter-district Office for Major Taxpayers No. 3.

Goltsblat BLP reports that the dispute related to imports of French spirits for production of cognac in 2010–2011. The tax office had charged Wine Brandy Plant Alliance-1982 (WBPA) an additional RUB 48 million in import VAT, refusing to make a partial deduction, alleging that the plant had bought the spirits from the importers at inflated prices, so the VAT and deductions were overstated too. The dispute lasted for almost three years. Lower courts dismissed WBPA's claims, but Goltsblat BLP was able to convince the Supreme Court’s Panel for Economic Disputes that the tax authority’s position was unjustified.  

According to Goltsblat BLP, "the Supreme Court ruled that adjustment of the deduction of import VAT (paid at customs when importing goods into Russia) was unlawful, including in the case of market value adjustment of the imported goods for tax purposes in the context of pricing control by the tax authorities."

Goltsblat BLP’s team was led by Partner Evgeny Timofeev, who explained that "we are content with the result. It is unfortunate, though, that we had to go as far as the Supreme Court to get a decision driven by statutory law rather than 'revolutionary expedience.'" Timofeev was supported by Goltsblat BLP Head of Tax Dispute Resolution Alexander Erasov, Senior Associate George Gutiev, and Associates Dmitry Malkin and Natalia Artemenko.

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