Companies grumble about court rubble rumble

A trade association protecting the interests of the UK's aggregate industry has lost a case in which it argued that making recycled materials tax exempt was unlawful and unfair.

British Aggregates Association v Commission of the European Communities

The European Court of First Instance has ruled that the UK aggregates levy, which differentiates between virgin and non-virgin aggregates, is a legitimate tool in environmental policy, and is compliant with EU law.

The case backs the principle that taxes may bear relevance to the environmental costs of a product, even though products that are similar and are used for the same purposes may be exempt from such taxes.

The rationale behind the UK policy is that by exempting non-virgin aggregates from the levy and applying it only to virgin aggregates they are maintaining the market competitiveness of the non-virgin aggregates, thereby reducing the volume of virgin aggregates extracted.

The Court has ruled that this is a valid policy, even though the virgin and non-virgin aggregates are used for the same purposes. It has also held that other exemptions, which encourage the use of waste as aggregates, are legitimate.

The British Aggregates Association are particularly unhappy about this, as they claim that the use of some exempted materials, such as china clay and slate, are more detrimental to the environment than the extraction of aggregate itself. They feel the policy to be highly discriminatory, and will consider appealing to the European Court of Justice.

The case can be accessed at the following link.

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