C-36/99 Idéal Tourisme

JUDGMENT OF THE COURT (Sixth Chamber)

13 July 2000 *

In Case C-36/99,

REFERENCE to the Court under Article 177 of the EC Treaty (now Article 234 EC) by the Tribunal de Première Instance de Liège, Belgium, for a preliminary ruling in the proceedings pending before that court between

Idéal Tourisme SA

and

Belgian State

on the interpretation of Articles 12(3) and 28(3)(b) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1), in the version of Council Directive 96/95/EC of 20 December 1996 amending, with regard to the level of the standard rate of value added tax, Directive 77/338 (OJ 1996 L 338, p. 89), and of Article 92 of the EC Treaty (now, after amendment, Article 87 EC),

* Language of the case: French.

THE COURT (Sixth Chamber),

composed of: J.C. Moitinho de Almeida, President of the Chamber, R. Schintgen, C. Gulmann, G. Hirsch (Rapporteur) and V. Skouris, Judges,

Advocate General: G. Cosmas,

Registrar: D. Louterman-Hubeau, Principal Administrator,

after considering the written observations submitted on behalf of:

— Idéal Tourisme SA, by F. Herbert and S. Houx, of the Brussels Bar,

— the Belgian State, by A. Snoecx, Adviser in the Directorate-General for Legal Affairs of the Ministry of Foreign Affairs, Foreign Trade and Development Cooperation, acting as Agent, assisted by B. van de Walle de Ghelcke, of the Brussels Bar,

— the French Government, by K. Rispal-Bellanger, Head of Subdirectorate in the Legal Affairs Directorate of the Ministry of Foreign Affairs, and D. Colas, Secretary for Foreign Affairs in that directorate, acting as Agents,

— the Portuguese Government, by L. Inez Fernandes, Director of the Legal Service in the Directorate-General for European Community Affairs of the Ministry of Foreign Affairs, A. Cortesão de Seiça Neves, lawyer in that directorate, and R. Álvaro de Figueiredo Ribeiro, lawyer in the Directorate-General of Land Transport, acting as Agents,

I - 6 0 61 — the Commission of the European Communities, by H. Michard and D. Triantafyllou, of its Legal Service, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of Idéal Tourisme SA, represented by F. Herbert, S. Houx and M. Pittie, of the Brussels Bar; the Belgian State, represented by B. van de Walle de Ghelcke; the French Government, represented by D. Colas and F. Million, Charge de Mission in the Legal Affairs Directorate of the Ministry of Foreign Affairs, acting as Agent; and the Commission, represented by H. Michard and D. Triantafyllou, at the hearing on 29 March 2000,

after hearing the Opinion of the Advocate General at the sitting on 11 May 2000,

gives the following

Judgment

Grounds

1By decision of 8 February 1999, received at the Court on 10 February 1999, the Tribunal de Première Instance (Court of First Instance), Liège, referred to the Court for a preliminary ruling under Article 177 of the EC Treaty (now Article 234 EC) two questions on the interpretation of Articles 12(3) and 28(3)(b) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1), in the version of Council Directive 96/95/EC of 20 December 1996 amending, with regard to the level of the standard rate of value added tax, Directive 77/338 (OJ 1996 L 338, p. 89), and of Article 92 of the EC Treaty (now, after amendment, Article 87 EC).

2Those questions were raised in proceedings between Idéal Tourisme SA and the Belgian State concerning the charging of value added tax (VAT) on international passenger transport operations by coach carried out by Idéal Tourisme.

Community legislation

3Article 28(3)(b) of the Sixth Directive provides:

'During the transitional period referred to in paragraph 4, Member States may:

(b) continue to exempt the activities set out in Annex F under conditions existing in the Member State concerned.'

4Annex F to the Sixth Directive, entitled 'Transactions referred to in Article 28(3)(b)', mentions at point 17:

'Passenger transport

The transport of goods such as luggage or motor vehicles accompanying passengers and the supply of services related to the transport of passengers, shall only be exempted in so far as the transport of the passengers themselves is exempt.'

5Article 15 of the Sixth Directive, which governs inter alia the exemption of international transport, prescribes at point 6:

'Without prejudice to other Community provisions Member States shall exempt the following under conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of such exemptions and of preventing any evasion, avoidance or abuse:

6. the supply, modification, repair, maintenance, chartering and hiring of aircraft used by airlines operating for reward chiefly on international routes, IDEAL TOURISME

and the supply, hiring, repair and maintenance of equipment incorporated or used therein.'

6Under Article 17(3)(b) of the Sixth Directive, Member States are to grant to every taxable person the right to a deduction or refund of VAT in so far as the goods and services are used for the purposes of transactions which are exempt under Article 15 of the directive.

7Article 12(3) of the Sixth Directive regulates the fixing by Member States of the standard and reduced rates of VAT on taxable transactions.

8Article 92(1) of the Treaty states:

'Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market.'

National legislation

9In Belgium, the Code de la Taxe sur la Valeur Ajoutée (Code of Value Added Tax, 'the VAT Code') provides in Article 21(3):

'By derogation from paragraph 2, the place of provision of services shall be deemed to be:

3. the place where the transport is carried out, according to the distances travelled, if the subject-matter of the service is transport.'

10Article 1(1) of Royal Decree No 20 of 20 July 1970 fixing the rates of value added tax and classifying goods and services according to those rates (Moniteur Belge, 31 July 1970) provides:

'Value added tax shall be charged:

1. at the rate of 6% on the goods and services specified in Table A of the annex to this decree.'

11Point XXV, entitled 'Transport', of Table A mentions:

'Transport of passengers and non-registered luggage and animals accompanying passengers.'

12Article 41(1)(1) of the VAT Code exempts from VAT:

'Maritime passenger transport; international air passenger transport; transport of luggage and motor vehicles accompanied by passengers in the case of the transport referred to in this indent.'

13Article 45(1) of the VAT Code reads as follows:

'A taxable person may deduct from the tax which he is liable to pay the tax which has been charged on goods and services supplied to him, on goods he has imported and on his intra-Community acquisitions of goods, in so far as he uses them to carry out:

1. taxable transactions;

2. transactions exempt under Articles 39 to 42.'

14The Belgian provisions on the exemption of international air passenger transport predate the entry into force of the Sixth Directive.

The main proceedings and the questions referred for a preliminary ruling

15Idéal Tourisme, established in Liège, Belgium, is a company which operates international passenger transport by coach.

16In its monthly VAT return relating to its transactions during June 1997, Idéal Tourisme declared the sections of its international coach passenger transport operations carried out in Belgium at the rate of 0% instead of the rate of 6% prescribed in the Belgian legislation. In so doing, it stated that it considered itself discriminated against with respect to VAT, compared to international passenger transport by air. It stated that the latter means of transport was exempt from VAT, which did not prevent air transport undertakings from deducting input VAT, whereas the Belgian section of passenger transport operations by coach was, under the Belgian provisions, subject to VAT at 6%. It regarded this as discrimination contrary to the general principle of equal treatment, which was one of the general principles of Community law.

17After the Belgian tax authorities demanded BEF 554 845 from Idéal Tourisme as VAT and BEF 55 000 in fines, it paid those amounts, and then brought proceedings in the Tribunal de Première Instance de Liège for reimbursement of those sums. Before that court, Idéal Tourisme submitted that the Belgian legislation exempting international air passenger transport not only breached the general principle of equality but also constituted State aid within the meaning of Article 92 of the Treaty in favour of air transport undertakings.

18Since it considered that an interpretation of Community law was needed for it to give judgment, the Tribunal de Première Instance de Liège stayed proceedings and referred the following questions to the Court for a preliminary ruling:

'1. Does Council Directive 77/388/EEC, and in particular Articles 12(3) and 28(3)(b) thereof, permit Member States to introduce, to the detriment of coach passenger transport undertakings, discrimination which is contrary to the principles of equal treatment and non-discrimination contained in Community law?

2. Can a VAT regime which favours a given sector of economic activity, such as the one in issue in the present case, constitute State aid within the meaning of Article 92 of the Treaty of Rome, even where it does not exclusively protect the interests of national industry?'

Admissibility of the questions

19The Belgian State expresses doubt as to whether there is a genuine dispute in the main proceedings. It considers that the questions which Idéal Tourisme suggested that the national court should refer to the Court, while not purely hypothetical, nevertheless have the sole purpose of achieving a result which it has not yet been possible to achieve by legislation. It leaves to the Court the question of the admissibility of the reference.

20It must be recalled that, according to settled case-law, it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court (see, inter alia, Case C-415/93 Union Royale Belge des Sociétés de Football Association and Others v Bosman and Others [1995] ECR 1-4921, paragraph 59). Nevertheless, the Court has held that it cannot give a preliminary ruling on a question submitted by a national court where it is quite obvious that the ruling sought by that court on the interpretation or validity of Community law bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (see Bosman, paragraph 61, and Case C-437/97 Evangelischer Krankenhausverein Wien and Others v Abgabenberufungskom mission Wien and Others [2000] ECR 1-1157, paragraph 52).

21It is clear from the order for reference that the action brought by Idéal Tourisme seeks reimbursement of the VAT it paid to the Belgian State, and hence the benefit _ for itself of an exemption from VAT without thereby losing the right to deduct the input VAT.

22The documents in the case contain nothing to show that the parties to the main proceedings manifestly colluded to obtain a ruling from the Court by means of an artificial dispute, as was the case in Case 244/80 Foglia v Novello [1981] ECR 3045. On the contrary, it is plain that the parties disagree on a number of important points, and it is clear from the documents that Idéal Tourisme did not come to an agreement with the Belgian State to refer hypothetical questions to the Court for a preliminary ruling.

23As to the relevance of the first question, it must be stated that the question is not manifestly irrelevant, since it appears from the case-file that the national court considers that coach passenger transport operators are discriminated against compared to air transport operators, that discrimination appearing to it to be contrary a priori to the Community principle of equality and non-discrimination.

24It is not for the Court, when considering the admissibility of the first question, to criticise that assessment.

25The national court's first question must therefore be answered.

26On the other hand, its second question is manifestly irrelevant to the result of the case in the main proceedings.

27By that second question the national court essentially asks whether the air transport operators' exemption from VAT constitutes State aid which is incompatible with Community law.

28However, the main proceedings are not concerned with that point, but with whether certain transactions carried out by Idéal Tourisme are subject to VAT or not.

29The second question should therefore not be answered (see, to that effect, in a similar case, Evangelischer Krankenhausverein Wien, paragraph 53).

The first question

30By its first question, the national court essentially asks whether the principle of equal treatment precludes legislation of a Member State which, first, in accordance with Article 28(3)(b) of the Sixth Directive, continues to exempt international passenger transport by air and, second, taxes international passenger transport by coach.

31Idéal Tourisme claims that as a coach transport undertaking it competes directly with air transport operators over intermediate distances, that is, distances from 300/400 to 2 500/3 000 km. It submits that the difference in taxation is therefore unjustified and breaches the principle of equal treatment. The Belgian State and the French and Portuguese Governments contend, on the other hand, that those two means of transport are not sufficiently interchangeable to be regarded as belonging to the same market. The Commission states that the difference in taxation according to the means of transport used by the taxable person, whether or not objectively justified, must be regarded as consistent with the Sixth Directive as long as the Community legislature has not put an end to the transitional provisions on exemption.

32It must be noted at the outset that Article 28(3)(b) of the Sixth Directive, read in conjunction with Annex F thereto, clearly and unambiguously authorises Member States to continue to apply, under the same conditions, certain exemptions which were provided for in their legislation before the entry into force of the Sixth Directive. While that article consequently does not permit Member States to introduce new exemptions or extend the scope of existing exemptions following the entry into force of that directive, it does not prevent a reduction of existing exemptions, especially as their abolition constitutes the IDEAL TOURISME

objective pursued by Article 28(4) of the directive (see Case C-136/97 Norbury Developments v Customs and Excise [1999] ECR I-2941, paragraph 19).

33It follows that a Member State which, like the Kingdom of Belgium, imposes VAT on the international transport operations of coach passenger transport operators and continues to exempt international air passenger transport would not be authorised to extend to the former the exemption allowed to the latter, even if the difference in treatment infringed the Community principle of equal treatment. On the other hand, it could tax air transport as well, in order to remove such a difference in treatment.

34However, a Member State may continue on the one hand to exempt, under the conditions set out in Article 28(3)(b) of the Sixth Directive, international passenger transport by air, and on the other hand to tax international passenger transport by coach.

35The principle of equal treatment is indeed one of the fundamental principles of Community law. That principle requires that similar situations are not to be treated differently unless differentiation is objectively justified (Joined Cases 201/85 and 202/85 Klensch and Others v Secrétaire d'Etat à à la ľ Agriculture et Viticulture [1986] ECR 3477, paragraph 9).

36As Idéal Tourisme rightly submits, it also follows from Klensch, paragraph 10, that when Member States transpose directives into their national law they must comply with the principle of equal treatment.

37However, the Community system of VAT is the result of a gradual harmonisation of national laws in the context of Articles 99 and 100 of the EC Treaty (now Articles 93 EC and 94 EC). As the Court has repeatedly stated, this harmonisation, as brought about by successive directives and in particular by the Sixth Directive, is still only partial (see Case C-165/88 ORO Amsterdam Beheer and Concerto v Inspecteur der Omzetbelasting [1989] ECR 4081, paragraph 21).

38As the Belgian State stated at the hearing, the harmonisation envisaged has not yet been achieved, in so far as the Sixth Directive, by virtue of Article 28(3)(b), unreservedly authorises the Member States to retain certain provisions of their national legislation predating the Sixth Directive which would, without that authorisation, be incompatible with that directive. Consequently, in so far as a Member State retains such provisions, it does not transpose the Sixth Directive and thus does not infringe either that directive or the general Community principles which Member States must, according to Klensch, comply with when implementing Community legislation.

39With respect to such a situation, it is for the Community legislature to establish the definitive Community system of exemptions from VAT and thereby to bring about the progressive harmonisation of national VAT laws (see, to that effect, Case C-305/97 Royscot and Others v Customs and Excise [1999] ECR I-6671, paragraph 31).

40The answer to the first question must therefore be that, in the present state of harmonisation of the laws of the Member States relating to the common system of VAT, the Community principle of equal treatment does not preclude legislation of a Member State which on the one hand, in accordance with Article 28(3)(b) of the Sixth Directive, continues to exempt international passenger transport by air, and on the other hand taxes international passenger transport by coach.

Costs

Costs

41The costs incurred by the French and Portuguese Governments and by the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.

Operative part

On those grounds,

THE COURT (Sixth Chamber),

in answer to the questions referred to it by the Tribunal de Première Instance de Liège by order of 8 February 1999, hereby rules:

In the present state of harmonisation of the laws of the Member States relating to the common system of value added tax, the Community principle of equal treatment does not preclude legislation of a Member State which on the one hand, in accordance with Article 28(3)(b) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment, in the version of Council Directive 96/95/EC of 20 December 1996 amending, with regard to the level of the standard rate of value added tax, Directive 77/388, continues to exempt international passenger transport by air, and on the other hand taxes international passenger transport by coach.

Moitinho de Almeida Schintgen Gulmann

Hirsch Skouris

Delivered in open court in Luxembourg on 13 July 2000.

R. Grass J.C. Moitinho de Almeida

Registrar President of the Sixth Chamber

IDEAL TOURISME

OPINION OF ADVOCATE GENERAL COSMAS delivered on 11 May 2000 *

I — Introduction

1The Tribunal de Première Instance (Court of First Instance), Liège (Belgium) has referred to the Court for a preliminary ruling two questions concerning the exemption from value added tax (hereinafter 'VAT') enjoyed by international passenger airline companies and the non-exemption of passenger transport by coach. More particularly, these questions concern the extent to which the taxation of the coach undertakings violates the principles of equal treatment and non-discrimination and the extent to which the exemption of the airlines constitutes State aid prohibited by Article 92 of the EC Treaty (now, after amendment, Article 87 EC).

II — The legal framework

A — Community legislation

2In order to 'render tax non-discrimina tory from the point of view of competition', the Sixth Directive 77/388/EEC 1 (herein

* Original language: Greek.

7 1 — Council Directive of 17 May 197 on the harmonisation of the laws of the Memher States relating to turnover taxes — Common system of value added tax: uniform basis of 9 assessment (OJ 1 77 L 145, p. 1).

after the 'Sixth Directive') is intended to make liable to VAT any taxable transaction not exempt under some other provision 2 which derogates from that directive. Under Article 2(1) of the Sixth Directive, the supply of goods or services effected for consideration by a taxable person acting as such is subject to VAT The exemptions from VAT for which the Sixth Directive provides (Article 13 et seq.) are derogations from this general principle. 3 In fact, the principles of general application and neutrality of the tax underlying the Sixth Directive are an essential key in interpreting derogating provisions. 4

3In Title XVI of the Sixth Directive, Article 28 establishes certain transitional provisions authorising the continuation by Member States of exemptions maintained with a view to their eventual abolition. Thus, Article 28(3)(b) states that, during the transitional period referred to in para-

2 — See Case 7.V85 Kerniu [1986] ECR 2219, paragraphs 14 and 17.

3 — As exceptions to the general rule, these derogations must be interpreted strictly: see, in particular. Case 348/87 Stichting Uitvoering Vmanaele [1989] ECR 1737, paragraph 13, and Case C-453/93 Bulthuis-Criffioen [1995] ECR I-2341, paragraph 19.

4 — See point 5 of the Opinion of Advocate General Tesauro in Case C 35/90 Cmnmissmn v Spurn [1991] ECR I-5073. graph 4, Member States may 'continue to exempt the activities set out in Annex F under conditions existing in the Member State concerned'. In other words, this provision permits a pre-existing system to be maintained if the Member States con 6 cerned so wish.

4According to Article 28(4) of the Sixth Directive: 'The transitional period shall last initially for five years as from 1 January 1978. At the latest six months before the end of this period, and subsequently as necessary, the Council shall review the situation with regard to the derogations set out in paragraph 3 on the basis of a report from the Commission and shall unanimously determine on a proposal from the Commission, whether any or all of these derogations shall be abolished.'

5Moreover, Annex F to the Sixth Directive, which, as its title indicates, consists of a list of the transactions referred to in Article 28(3)(b), mentions 'passenger transport' at point 17 and continues: 'The

5 — Article 28 of the Sixth Directive has been repeatedly interpreted by the Court, which has clearly established that the expiration of the period laid down in its paragraph 4 did not lead ipso facto to the extinction of the right to maintain existing exemptions; see, for example, Commission v Spain, cited in footnote 4, paragraph 9; Case C-74/91 Commission v Germany [1992] ECR 1-5437, paragraph 3; and Case C-331/94 Commission v Greece [1996] ECR 1-2675, paragraph 14.

6 — See Case C-408/95 Eurotunnel and Others [1997] ECR 1-6315, paragraph 57.

transport of goods such as luggage or motor vehicles accompanying passengers and the supply of services related to the transport of passengers shall only be exempted in so far as the transport of the 7 passengers themselves is exempt'.

B — National legislation

6Within Belgium's internal legal system, the provisions of the Sixth Directive are implemented by the Code de la TVA (VAT Code).

7Article 1(1) of Royal Decree No 20 of 20 July 1970 fixing the rates of value added tax and classifying goods and services according to those rates provides for VAT to be charged at the rate of 6% on the goods and services specified in Table A of the annex to the decree.

7 — On 5 November 1992, the Commission submitted to the Council a proposal for a directive amending the VAT arrangements applicable to passenger transport (COM(92) 416 final, OJ 1992 C 307, p. 11) which, having come to nothing, was finally withdrawn in view of the fact that, since the Council had taken no decision, the proposal was no longer topical, as noted by the Commission itself (OJ 1997 C 2, p. 2).

8Section XXV, entitled 'Transport', of Table A mentions:

'Transport of passengers and non-registered luggage and animals accompanying passengers.'

9Article 41(1)(1) of the VAT Code exempts from VAT maritime passenger transport; international air passenger transport; transport of luggage and motor vehicles accompanied by passengers in the case of the transport referred to in this same indent (1).

III — The facts

10Idéal Tourisme SA (hereinafter 'Idéal Tourisme'), the applicant in the main proceedings, which is established in Liège, is a company operating international passenger transport by coach.

11In a letter addressed to the Belgian tax authority dated 11 July 1997, referring to its (monthly) VAT return for its transactions in June 1997, Idéal Tourisme stated that it considered the Belgian segments of its international coach passenger transport operations to be zero-rated for VAT.

12In this letter, Idéal Tourisme argued that the Belgian legislation, under which the Belgian segments of coach passenger transport operations are subject to VAT at the rate of 6%, 8 whereas air passenger transport is exempt from VAT, was giving rise to discrimination, with respect to VAT, between tourist coach operators and airline companies, in breach of the general principle of equal treatment. Moreover, Idéal Tourisme considered that the VAT system which gave advantages to the air passenger transport sector constituted State aid incompatible with the common market within the meaning of Article 92 et seq. of the EC Treaty.

13On 10 October 1997, the VAT Office in Liège sent Idéal Tourisme a statement of VAT adjustment, charging it BEF 554 845 in VAT and a fine of BEF 55 000.

14By letter of 27 October 1997, Idéal Tourisme authorised the VAT office to debit

8 — The segments of the journey completed in other countries of the European Union are subject to VAT at the rate specific to the country concerned.

those sums from its VAT current account, while simultaneously disputing the adjustment and giving the office notice to repay the sums debited.

15The tax authority having failed to comply, on 16 January 1998 Idéal Tourisme brought an action against its refusal to reimburse.

16On 26 January 1998, the VAT office informed Idéal Tourisme that the sums at issue had been repaid.

17On 18 February 1998, a summons to pay the said sums was issued against Idéal Tourisme.

18On 22 April 1998, Idéal Tourisme made an application to have the summons set aside, on the same grounds as in the action for repayment brought in January 1998.

19Idéal Tourisme supported its application with two arguments drawn from Community law, submitting that the Belgian legislation breached both the principle of equal treatment and the provisions of the EC Treaty concerning State aid.

IV — The questions referred to the Court

20In order to resolve the dispute before it, the national court has referred the following two questions to the Court for a preliminary ruling:

'1. Does Council Directive 77/388/EEC, and in particular Articles 12(3) and 28(3)(b) thereof, permit Member States to introduce, to the detriment of coach passenger transport undertakings, discrimination which is contrary to the principles of equal treatment and nondiscrimination contained in Community law?

2. Can a VAT regime which favours a given sector of economic activity, such as the one in issue in the present case, constitute State aid within the meaning or Article 92 of the Treaty of Rome, even where it does not exclusively protect the interests of national industry?'

V — Replies to the questions referred to the Court

A — Admissibility of the questions

21The Belgian Government expresses doubt as to whether there is a genuine dispute, arguing that the questions which Idéal Tourisme had suggested that the national court should raise, while not purely hypothetical, nevertheless had the sole purpose of achieving a result which it had not yet been possible to achieve by 9 legislation.

22According to Idéal Tourisme there is nothing artificial about the main proceedings. Indeed, it is plain that the parties disagree on a number of important points and that Idéal Tourisme did not come to an agreement with the Belgian State to refer a

9 — The Belgian Government also raises the question or whether, within the context of an order for reference which depends heavily on the factual and legal circumstances giving rise to the main proceedings, the court can rule on an interpretation of certain provisions of Community law which would have the effect of limiting the competence of the Community legislature in this field or even precluding it from doing so.

question to the Court for a preliminary ruling.

23Finally, in the view of the Tribunal de Première Instance de Liège, Idéal Tourisme's position is sustainable and there can be no suspicion that it has manufactured the dispute merely in order to bring before the Court of Justice various questions, whose expediency and formulation remain a matter for the national court.

24It is clear from the order for reference that the action brought by Idéal Tourisme seeks reimbursement of the VAT it paid and hence the benefit for itself of an exemption from VAT.

25With regard to the first question referred for a ruling, I believe that it is possible to extract from all the information provided by the national court, in particular from the grounds of the decision referring the questions, points of Community law 10 which require interpretation. The reply to the questions of interpretation raised

10 — See, in particular, Case 35/85 Procureur de la République v lissier [1986] ECR 1207, paragraph 9, and Case C-250/91 Hewlett Packard France v Directeur Générale des Douanes [1993] ECR I-1819, paragraph 9.

corresponds to an objective requirement inherent in the resolution of the dispute 1 brought before the national court. 1

26Nevertheless, having regard to the subject-matter of the dispute submitted to the national court, I believe that there is no need to reply to the second question. Thus, Idéal Tourisme's action is aimed at obtaining the reimbursement of the VAT paid and not at having the Belgian tax authorities ordered to stop granting aid to the airlines in the form of exemptions from VAT or having the airline companies thus advan taged repay to the tax authorities the aid at issue granted in breach of Article 93(3) of the EC Treaty (now Article 88(3) EC), in which case the raising of this question would be justified and the Court's reply

11—In fact, on several occasions (see, in particular, Case 244/80 Foglia v Novello [1981] ECR 3045, paragraphs 18 to21)theCourthas pointed out that Article 177 of the EC Treaty (now Article 234 EC) assigns the Court the duty not of delivering advisory opinions on general or hypothetical questions but of assisting in the administration of justice in the Member States. So, having regard to the circumstances of fact and law involved and the analysis of the problems facing the national court in the main proceedings, the Court examines whether there is a genuine need to interpret provisions of Community law and whether the interpretation requested will be useful in resolving the dispute in the main proceedings or whether the questions have been raised within the framework of procedural devices arranged by the parties in order to induce the Court to give its views on certain problems of Community law which do not correspond to an objective requirement inherent in the resolution of the dispute (see Foglia v Novello, cited above, paragraph 18, Case C-231/89 Gmurzynska-Bscher v Oberfinanzdirektion Köln [1990] ECR 1-4003, paragraph 23, and Case C-437/97 Evange lischer Krankenhausverein Wien and Others v Abgaben-berufungskommission Wien and Others [2000] ECR I-1157, paragraph 52). Only exceptionally has the Court had recourse to the right to refuse to reply, when it was quite obvious that the interpretation of Community law or the examination of the validity of a rule of Community law bore no relation to the subject-matter of the main action (see, in particular,Case 126/80 Salonia v Poidomani and Baglieri |1981] ECR 1563, paragraph 6, and Case C-368/89 Crispoltoni v Fattorìa Autonoma Tabacchi dì Città di Castello [1991] ECR I-3695, paragraph 11). relevant to the resolution of the dispute in 12 the main proceedings. I reach this conclusion without having to decide whether the exemption of the airlines from VAT should be characterised as State aid, as that question, for the above reason, need not be examined.

27Thus, for the Court, replying to the second question raised by the national court would signify a clear departure from precedent, in that it would thereby be declaring admissible, and replying to, questions referred for a ruling, even though, as already explained, those questions are not relevant to the outcome of a pending case and have been formulated in connection with such a (pending) case and raise a problem which, to a greater or lesser extent, has been discussed in theory or practice, without its solution being of any assistance in deciding that case.

12 — lt may be recalled that in Evangelischer Krankenhausver ein Wien, cited above in footnote 11, paragraph 53, the Court considered that it was unnecessary to reply to the question whether exemption from the payment of beverage duty on the sale of wine direct from the vineyard constitutes State aid incompatible with Community law. In this judgment, the Court held that the question submitted was wholly irrelevant to the resolution of the disputes in the main proceedings, which concerned the obligation on various companies to pay beverage duty in respect of supplies of beverages and ice cream effected for consideration, and not the question whether exemption of wine sold directly at the place of production from payment of such a duty constituted State aid incompatible with the Treaty.

B — The first question

28By its first question, the national court inquires whether the Sixth Directive, and in particular Article 28(3)(b) thereof, permits Member States to introduce inequality of treatment to the detriment of coach passenger transport undertakings and whether such discrimination is contrary to the principles of equal treatment and non discrimination, which form an integral part of Community law.

29It follows from the main proceedings that the reply to this question would be useful in resolving the dispute in the main action only in so far as the question of whether the exemption can be extended to coach passenger transport undertakings has been decided. In my view, the answer to this question follows from the interpretation of Article 28(3)(b) of the Sixth Directive, without it being necessary to examine the question put by the national court.

30The wording of Article 28(3)(b) of the Sixth Directive is clear. It authorises Member States to continue to apply under the same conditions the exemptions from VAT for which their legislation provided before the entry into force of the Sixth Directive, but not to introduce a new exemption 13 system. However, this only applies to the extent that the two conditions on which the compatibility of national legislation with the Sixth Directive depends, namely, ante riority and maintenance of the legislation at issue in the same form as it was in at the time of entry into force of the Sixth Directive, or free from changes incompatible with the exception introduced by Article 28(3), are cumulatively satisfied. Thus, exemptions applicable on the date of entry into force of the Sixth Directive may not be extended, nor may new exemptions be introduced after the entry into force of that 14 directive, no more than it is possible to reintroduce exemptions that existed before the provision of certain services was made 15 subject to VAT under the Sixth Directive.

31Furthermore, in my view, the combined provisions of Article 28(3)(b) and Annex F,

13 — See Kerrutt, cited above in footnote 2, paragraph 17, and the Opinion of Advocate General Tesauro in Commission v Spain, cited above in footnote 4, point 4.

Moreover, the Court has acknowledged that the authorisation granted to Membet States to retain their existing legislation in regard to exclusion from the right of deduction of VAT, provided for in Article 17(6) of the Sixth Directive, will remain in force until such time as the Council has adopted the provisions envisaged by that article; see, in particular, Case C-305/97 Royscot Leasing and Others v Customs and Excise [1999] ECR I-6671, paragraphs 29 and 30, and Case C-43/96 Commission v France [1998] ECR I-3903, paragraphs 16 to 19, together with paragraphs 20 and 21 of the Opinion of Advocate General Jacobs in the latter case, and also point 24 et seq. of my opinion in Joined Cases C-177/99 and C-181/99 Ampafrance and Sanofi Synthelabo pending before the Court.

14 — See, in particular, Kerrutt, cited above in footnote 2, paragraph 17, and Case C-136/97 Norbury Developments v Commissioners of Customs and Excise [1999] ECR I-2491, paragraphs 19 and 20, in both of which, however, the Court stressed that this provision did not prevent the abolition of exemptions existing on the date or entry into force of the Sixth Directive, with a view to the uniform application of the latter (paragraph 201, and also Commission v Cermany, cited above in footnote 5, paragraph 15. 15 — See Commission v Spam, cited above in footnote 4, paragraphs 6 to 9, and Commission v Germany, cited above in footnote 5, paragraph 15.

point 17, of the Sixth Directive are not contrary to the principles of equal treatment and non-discrimination. If it became apparent that the application or maintenance of certain existing provisions by Member States involved discrimination, that could not be laid at the door of the Sixth Directive, and there could be no question of extending the existing exemptions.

32In the light of the above, my position is as follows: if, after the entry into force of the Sixth Directive, the VAT exemption system applicable to air passenger transport had been extended to coach transport undertakings, that extension would have been contrary to Article 28(3)(b), thus giving rise to distortions to the detriment 16 of Member States which, in accordance with this transitional provision, had left their legislation as it stood on the entry into force of the Sixth Directive and had not extended the VAT exemptions that existed at that time. Ultimately, this outcome

16 — See Commission v Germany, cited above in footnote 5, paragraphs 25 and 26.

would be contrary to the requirement of uniform application of the provisions of the 17 Sixth Directive, to the detriment of the objective of achieving a market characterised by healthy competition.

33In the present case, therefore, Article 28(3)(b) of the Sixth Directive does not allow a Member State, such as the Kingdom of Belgium, to extend the exemption provided for airline companies to coach transport undertakings once the Sixth Directive has entered into force.

34Accordingly, the Court is not required to examine the question whether the airline companies are receiving favourable treatment to the detriment of the coach transport undertakings, since, in any event, as I have already explained, the reply given would not be of use in resolving the present dispute.

17 — See Norbury Developments, cited above in footnote 14, paragraph 20.

VI — Conclusion

35In the light of the above, I propose that the Court reply to the questions referred for a preliminary ruling by the Tribunal de Première Instance de Liège as follows:

The combined provisions of Article 28(3)(b) and Annex F, point 17, of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment should be interpreted as meaning that they do not authorise Member States to extend, after the entry into force of that directive, the system of exemptions from value added tax for certain passenger transport activities.