Attorneys of «Kazakov and Partners» tax practice managed to gain nullification of the tax body decision of collecting more than 2, 5 bn RUR as an additional charge and penalty in amount of 346, 7 mio RUR from LLC Gazprom mezhregiongaz Pyatigorsk according to the article 122 of the Tax Code of the Russian Federation.
Such a substantial sum of additional charge was a result of inclusion into VAT taxation base the cost of gas volume accounted for by energy consumption above permitted standard and also gas volume stolen by means of unauthorized taps.
Moreover the tax body did not agree with multiple correcting of VAT taxation base in connection with updating of sold gas volume by a tax payer which took place as a consequence of subscribers' checks and receiving of subscribers' gas counter level messages much later after the accounting period termination.
This is a general problem for companies providing utilities supply.
Under nullification of additional charge the court took to consideration the following postulates ignored by tax authority:
- Volume of the stolen gas doesn’t increase VAT taxation base as stealing is not a sale;
- In case of proper accounting of income and expenses absence (in this case the tax body considered that accounting of stolen gas was not properly arranged by a tax payer), the tax body should have used calculation method of taxation base determination applying corresponding figures of similar tax payers, this violation led to essential increase of tax burden in comparison with similar tax payers;
- The tax body violated the article 101 of the Tax Code of the Russian Federation and didn’t describe exact violations under entering of updating in personal accounts of certain subscribers;
- The tax body used interrogation reports of people who have nothing to do with the business activity under consideration as sources of information (members of a family, neighborhoods, tenants who could not and should not have known the circumstances of gas supply agreement but not subscribers were questioned as witnesses);
- The Arbitration (Commercial) Court didn’t receive information collected in the course of operative investigation activity as admissible evidence because some information was irrelevant to the audit period and some became available after tax inspection termination and was not given to the tax payer.
Judicial statement of erroneousness of the above-cited decisions has practical importance as similar violations are widespread under tax inspections carrying out.
