C-62/93 BP Supergas

JUDGMENT OF THE COURT (Sixth Chamber)

6 July 1995 *

In Case C-62/93,

REFERENCE to the Court under Article 177 of the EEC Treaty by the Dioikitiko Protodikeio Athinas for a preliminary ruling in the proceedings pending before that court between

BP Supergas Anónimos Etairia Geniki Emporiki-Viomichaniki kai Antiprossopeion

and

Greek State

on the interpretation of Articles 11, 17 and 27 of the Sixth Council Directive (77/388/EEC) of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment,

THE COURT (Sixth Chamber),

composed of: F. A. Schockweiler, President of the Chamber, G. F. Mancini (Rapporteur), C. N. Kakouris, J. L. Murray and G. Hirsch, Judges,

* Language of ihc case: Greek.

I - 1 9 07 Advocate General: F. G. Jacobs, Registrar: H. A. Rühl, Principal Administrator,

after considering the written observations submitted on behalf of:

— BP Supergas Anónimos Etairia Geniki Emporiki-Viomichaniki kai Antiprossopeion, by Nikolaos Skandamis and Athanassios Bakas, of the Athens Bar,

— the Hellenic Republic, by Vassileios Kontolaimos, Deputy Legal Adviser at the State Legal Service and Vassileia Pelekou, Legal Agent in the same service, acting as Agents,

— the Commission of the European Communities, by Enrico Traversa, of its Legal Service, and Théophile M. Margellos, a national civil servant seconded to the Commission, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of BP Supergas Anónimos Etairia Geniki Emporiki-Viomichaniki kai Antiprossopeion, represented by Nikolaos Skandamis and Athanassios Bakas, the Greek Government represented by Vassileios Kontolaimos and Vassiliki Tatsi and the Commission of the European Communities represented by Dimitrios Gouloussis, Legal Adviser, acting as Agent, at the hearing on 19 January 1995,

after hearing the Opinion of the Advocate General at the sitting on 9 March 1995,

gives the following Judgment

Legal context and the dispute

1By judgment of 7 April 1992, received at the Court on 11 March 1993, the Dioikitiko Protodikeio Athinas (Administrative Court of First Instance, Athens) referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a number of questions on the interpretation of Articles 11, 17 and 27 of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization 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, hereafter 'the Sixth Directive').

2Those questions were raised in proceedings between BP Supergas Anónimos Etairia Geniki Emporiki-Viomichaniki kai Antiprossopeion (hereafter 'Supergas') and the Greek State concerning an action to annul Decision No 46645 of the Head of the State Finance Service, Taxation of Limited Commercial Companies, Athens, of 28 January 1991 (hereafter 'the decision at issue'), by which the company's request for partial withdrawal of its VAT returns for the accounting period 1 January to 31 December 1987 was rejected, and also for refund of DR 12 472 889 which it submits was not due by way of VAT.

3Supergas markets petroleum and related products in Greece. It submitted VAT returns for the period from 1 January to 31 January 1987 which showed a total turnover of DR 2 012 096 255, of which DR 1 760 906 349, or 87%, consisted in sales of petroleum products which, by virtue of Article 37(4) of the Greek Law No 1642/1986 on the application of VAT and other provisions {Greek Official Journal, Part 1, No 125) did not give rise to a right to deduct input VAT. An amount of DR 251 139 876, that is to say 13% of the total turnover, related to other transactions which, according to Law No 1642/86, did give rise to a right of deduction.

4During the same period Supergas paid DR 14 336 654 by way of VAT on supplies of goods and services made to it. Initially it claimed only deduction of DR 1 863 765, that is to say 13% of that amount, which was the percentage of the transactions giving rise to a right of deduction under the VAT Law. On 31 December 1990 it then partially revoked its original returns on the ground of excusable error and claimed deduction of DR 14 336 654, which corresponded to the whole of the input VAT paid by it. It also claimed a refund of DR 12 472 899, which was 87% of the input VAT, which it considered to have been wrongly levied.

5In the decision at issue the Head of the State Finance Service rejected that claim. Supergas then brought an action before the Dioikitiko Protodikeio Athinas claiming annulment of that decision and refund of the abovementioned amount of DR 12 472 889.

6Supergas claimed that Articles 23(1), 24(1) and 37 of Greek Law No 1642/1986 and Article 11 of the Greek Law No 1571/1985 {Greek Official Journal No 192) and Presidential Decree No 619/1985 (Greek Official Journal No 227), as in force for the 1987 tax year, infringed several provisions of the Sixth Directive.

7After observing that Article 37 of Law No 1641/1986 contained rules which in principle derogated from the provisions of the Sixth Directive, the national court stayed the proceedings and submitted to the Court the following questions for a preliminary ruling:

'1. Was the Greek Government entitled, for whatever reason,

(a) under the rules contained in Article 37(1) and (4) of Law No 1642/1986, on the one hand, to subject the importation of finished petroleum products to value added tax to be calculated on the basic price referred to above, which differs from that provided for in Article 11A(1) and B(l) and (2) of the Sixth Council Directive, and, on the other hand, to exempt companies marketing petroleum products, filling stations and other retail sellers from the obligation to submit related returns, thus depriving them of the right to deduct the tax; and

(b) to exempt from the tax, pursuant to Article 37(6) of Law No 1642/1986, services in respect of the transport and storage of petroleum products unconnected with the transport etc. of those products from the first to another named destination?

2. If the reply is in the negative, that is to say, if the Greek Government was not so entitled, are Article 11A(1) and B(l) and (2) and Article 17(1) and (2) of the Sixth Directive unconditional and sufficiently clear, enabling the plaintiff company to rely upon them as superior law before the Dioikitiko Protodikeio before which the case is pending? Further, if the latter is the case, in application of those provisions in the directive, may the taxable person request retrospectively from 1 January 1987, when Law No 1642/86 came into force, deduction of the tax on the inputs referred to which was not deducted and a refund of the amount of any tax paid on that basis for 1987 which was not due?'

Admissibility

8In its observations the Greek Government claimed that the questions submitted by the national court were inadmissible.

9It claimed, first, that Question 1(a) had no connection with the subject-matter of the dispute.

10In that regard the Court has consistently held that it is for the national courts alone, before which the proceedings are pending and which must assume responsibility for the judgment to be given, to determine, having regard to the particular features of each case, both the need for a preliminary ruling to enable them to give judgment and the relevance of the questions which they refer to the Court. A request for a preliminary ruling from a national court may be rejected only if it is quite obvious that the interpretation of Community law or the examination of the validity of a rule of Community law sought by that court bears no relation to the actual nature of the case or the subject-matter of the main action (see, among others, the judgments in Case C-67/91 Asociación Española de Banca Privada and Others [1992] ECR I-4785, paragraphs 25 and 26, and Joined Cases C-332/92, C-333/92 and C-335/92 Eurico Italia and Others [1994] ECR I-1711, paragraph 17). However, that is not the position in this case.

11The refusal of the right to deduct tax which is at issue in the main proceedings is closely linked to the special VAT arrangements for petroleum products. The national court could therefore take the view that it was necessary to obtain an interpretation of the Sixth Directive from the Court of Justice to enable it to rule on the compatibility with Community law of those arrangements as a whole.

12Secondly, the Greek Government claimed that the Court should not reply to the second question, on the ground that the general provisions of Law No 1642/1986, which would apply if the reply to the first question were in the negative, were perfectly compatible with the Sixth Directive.

13Since the Court of Justice has no jurisdiction, in proceedings for a preliminary ruling under Article 177, to rule on the compatibility of a national measure with Community law (see, in particular, the judgment in Case C-188/91 Lettische Shell ν Hauptzollamt Hamburg-Harburg [1993] I-363, paragraph 27), it is unable to rule on the validity of that argument.

14The Court must therefore consider the questions submitted by the national court.

Question 1(a)

15The national court asks in substance whether Articles 2, 11 and 17 of the Sixth Directive are to be interpreted as precluding national rules which make the importation of finished petroleum products subject to VAT calculated on the basis of a basic price different from that provided for in Article 11 of that directive, and which, by exempting traders in the petroleum sector from the obligation to submit returns, deprives them of the right to deduct the VAT levied directly on input transactions.

16The fundamental principle which underlies the VAT system, and which follows from Article 2 of the First and Sixth Directives, is that VAT applies to each transaction by way of production or distribution after deduction has been made of the VAT which has been levied directly on transactions relating to inputs.

17Article 11 of the Sixth Directive defines the taxable amount for VAT purposes. That provision is intended inter alia to ensure that VAT is applied at each marketing stage on the price or value of the goods at that stage. It therefore precludes the application of taxation arrangements such as those at issue in the main proceedings, in which VAT is determined, once only, on the price at the first marketing stage.

18The right of deduction provided for in Article 17 et seq. of the Sixth Directive is an integral part of the VAT scheme and in principle may not be limited. The Court has consistently held (see, in particular, Case 50/87 Commission ν France [1988] ECR 4797, paragraphs 15 to 17 and Case C-97/90 Lennartz ν Finanzamt München III [1991] ECR I-3795, paragraph 27) that the right of deduction must be exercised immediately in respect of all the taxes charged on transactions relating to inputs. Any limitation on the right of deduction affects the level of the tax burden and must be applied in a similar manner in all the Member States. Consequently, derogations are permitted only in the cases expressly provided for in the directive.

19As regards, more particularly, the derogations in Article 37 of Law No 1642/1986, the Greek Government considers that they were authorized by the Council under the procedure laid down in Article 27 of the Sixth Directive. It claims that, since the Greek authorities brought the entire text of draft Law No 1642/1986 to the attention of the Commission, they obtained the Council's approval for the derogation in question, since they were not raised by the Council within the period applicable.

20That argument cannot be accepted.

21The features of the system established by Article 27 of the Sixth Directive should first be noted. Under Article 27(1), the Council may authorize any Member State to introduce special measures for derogation from the directive. Under Article 27(2), a Member State wishing to introduce one of the measures referred to in Article 27(1) is to inform the Commission of it and to provide the Commission with all relevant information. The Commission is to inform the other Member States within one month (Article 27(3)). If neither the Commission nor a Member State has requested that the matter be raised by the Council, the Council's authorization is deemed to have been given at the end of a period of two months after the date on which the Commission informed the Member States (Article 27(4)). Otherwise, the Council may not authorize a measure except by acting unanimously on a proposal from the Commission (Article 27(1) in fine).

22The Court has held (see Case 5/84 Direct Cosmetics ν Commissioners of Customs and Excise [1985] ECR 617, paragraph 24) that measures derogating from the directive do not accord with Community law unless they remain within the limits of the objectives referred to in Article 27(1) and have also been notified to the Commission and impliedly or expressly authorized by the Council in the circumstances specified in paragraphs (1) and (4) of Article 27.

23In the light of those considerations, the Court finds that the Greek Government did not specifically inform the Commission of the special measures in Article 37 of Law No 1642/1986 that provided for arrangements derogating from the Sixth Directive with regard to petroleum products. The Greek authorities merely sent the whole draft Law No 1642/1986, without giving any particular indication regarding the special arrangements provided for in Article 37. Only a notification referring expressly to Article 27(2) of the directive would have enabled the Commission and, if necessary, the Council to verify whether the derogating arrangements for petroleum products laid down in Article 37 of that draft Law were within the scope of the objectives referred to in Article 27(1).

24Accordingly, it should be stated in reply to this part of Question 1 that Articles 2, 11 and 17 of the Sixth Directive must be interpreted as precluding national rules which make the importation of finished petroleum products subject to VAT calculated on the basis of a basic price different from that provided for in Article 11 of that directive and which, by exempting traders in the petroleum sector from the obligation to submit returns, deprive them of the right to deduct VAT charged directly on transactions relating to inputs.

Question 1(b)

25The national court asks in substance whether the provisions of the Sixth Directive should be interpreted as meaning that they preclude exemption from VAT of transport and storage services of petroleum products that are unconnected with the transport of those products from their first destination to another named destination.

26Articles 13 to 16 of the Sixth Directive lay down a common list of exemptions from VAT. Under Article 14(l)(i) of that directive, Member States are to exempt 'the supply of services, in connection with the importation of goods where the value of such services is included in the taxable amount in accordance with Article HB(3)(b)'.

27Under the first paragraph of Article HB(3)(b), transport costs incurred up to the 'first place of destination' within the territory of the Member State are included in the taxable amount. The 'first place of destination' means the place mentioned on the consignment note (Article HB(3)(b), second paragraph). Member States may also include the transport costs in the taxable amount where they result from transport to another known place of destination (third paragraph).

28The Court finds that a general exemption from VAT on all 'transport and storage of petroleum products', as laid down in Article 37(6) of Law No 1642/1986, goes beyond the exemption provided for in Article 14 of the Sixth Directive.

29Moreover, such a general exemption deprives the trader of the right to deduct VAT charged on services in respect of transport and storage after the transport of petroleum products to a second place of destination.

30Furthermore, as set out in paragraphs 22 and 23 above, the measures for derogation from the Sixth Directive must be notified to the Commission in accordance with Article 27(2), which was not the case in the context of the main proceedings with regard to Article 37(6) of Law No 1642/1986.

31Accordingly, it should be stated in reply to the second part of Question 1 that the provisions of the Sixth Directive, in particular Articles 13 to 17 thereof, are to be interpreted as precluding an exemption from VAT on services in respect of the transport and storage of petroleum products that are unconnected with the transport of those products from a first destination to another named destination.

Question 2, first part

32The first part of the national court's question seeks to establish whether Article 11A(1) and B(l) and (2), and Article 17(1) and (2) of the Sixth Directive confer rights on individuals on which they may rely before national courts.

33In order to reply to that qviestion, reference should be made to the settled case-law of the Court regarding the right of individuals to rely upon the Sixth Directive (see the judgments in inter alia Case 8/81 Becker [1982] ECR 53 and Case C-10/92 Balocchi [1993] ECR I-5105).

34It follows from that case-law that, despite the relatively wide discretion enjoyed by the Member States in implementing certain provisions of the Sixth Directive, individuals may effectively plead before national courts the provisions of the directive which are sufficiently clear, precise and unconditional (Balocchi, paragraph 34).

35The provisions of Article 11A(1) and B(l) and (2) specify the rules for determining the taxable amount whilst Article 17(1) and (2) specify the conditions giving rise to the right to deduct and the extent of that right. They do not leave the Member States any discretion as regards their implementation. Accordingly, they satisfy the abovementioned criteria and therefore confer rights on individuals which they may invoke before a national court in order to challenge national rules which are incompatible with those provisions.

36Consequently, it should be stated in reply to the first part of Question 2 that the provisions of Article 11A(1) and B(l) and (2) and of Article 17(1) and (2) of the Sixth Directive confer rights on individuals on which they may rely before a national court.

Question 2, second part

37The national court's question seeks to establish whether a taxable person may claim, with retroactive effect from the date on which the national legislation contrary to the Sixth Directive came into force, a refund of the VAT paid without being due.

38The Sixth Directive does not contain any provisions applicable to claims for refund of VAT unduly paid by taxable persons.

39Nevertheless, the Court has held (see, in particular, the judgment in Case 309/85 Barra ν Belgium and Another [1988] E CR 355, paragraph 11) that the interpretation which, in the exercise of the jurisdiction conferred upon it by Article 177, the Court of Justice gives to a rule of Community law clarifies and defines, where necessary, the meaning and scope of that rule as it must be or ought to have been understood and applied from the time of its coming into force. It follows that the rule as thus interpreted may, and must, be applied by the courts even to legal relationships arising and established before delivery of the judgment ruling on the request for interpretation, provided that in other respects the conditions under which an action relating to the application of that rule may be brought before the courts having jurisdiction are satisfied.

40It follows more particularly that the right to obtain a refund of amounts charged by a Member State in breach of rules of Community law is the consequence and complement of the rights conferred on individuals by the Community provisions as interpreted by the Court (Barra, paragraph 17).

41While it is true that such a refund may be sought only in the framework of the substantive and procedural conditions laid down by the various relevant national laws, the Court has consistently held (see inter alia the judgment in Case 199/82 San Giorgio [1983] ECR 3595, Case 309/85 Barra, cited above, paragraph 18, Case C-208/90 Emmot ν Minister for Social Welfare and the Attorney General [1991] ECR 1-4269, paragraph 16, and Case C-410/92 Johnson ν Chief Adjudication Officer [1984] ECR 1-5483, paragraph 21), that those conditions and the procedural conditions and rules governing actions at law for protecting the rights which individuals derive from the direct effect of Community law may not be less favourable than those relating to similar, domestic actions nor be framed in a way such as to render virtually impossible the exercise of rights conferred by Community law.

42Accordingly, it should be stated in reply to the second part of the second question that a taxable person may claim, with retroactive effect from the date on which the

I -1 919 national legislation contrary to the Sixth Directive came into force, a refund of VAT paid without being due, by following the procedural rules laid down by the domestic legal system of the Member State concerned, provided that those rules are not less favourable than those relating to similar, domestic actions nor framed in a way such as to render virtually impossible the exercise of rights conferred by Community law.

Costs

Costs

43The costs incurred by the Commission of the European Communities and the Greek Government, 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 proceedings 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 Dioikitiko Protodikeio Athinas by judgment of 7 April 1992, hereby rules:

1. Articles 2, 11 and 17 of the Sixth Council Directive (77/388/EEC) of 17 May 1977, on the harmonization of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment, must be interpreted as precluding national rules which make the importation of finished petroleum products subject to VAT calculated on the basis of a basic price different from that provided for in Article 11 of that directive and which, by exempting traders in the petroleum sector from the obligation to submit returns, deprive them of the right to deduct VAT charged directly on transactions relating to inputs.

2. The provisions of the Sixth Directive, in particular Articles 13 to 17 thereof, are to be interpreted as precluding an exemption from VAT on services in respect of the transport and storage of petroleum products that are unconnected with the transport of those products from a first destination to another named destination.

3. The provisions of Article 11A(1) and B(l) and (2) and of Article 17(1) and (2) of the Sixth Directive confer rights on individuals on which they may rely before a national court.

4. A taxable person may claim, with retroactive effect from the date on which the national legislation contrary to the Sixth Directive came into force, a refund of VAT paid without being due, by following the procedural rules laid down by the domestic legal system of the Member State concerned, provided that those rules are not less favourable than those relating to similar, domestic actions nor framed in a way such as to render virtually impossible the exercise of rights conferred by Community law.

Schockweiler Mancini Kakouris

Murray Hirsch

Delivered in open court in Luxembourg on 6 July 1995.

R. Grass F. A. Schockweiler Registrar President of the Sixth Chamber

OPINION OF ADVOCATE GENERAL JACOBS delivered on 9 March 1995 *

1In this case the Administrative Court of First Instance, Athens, seeks a ruling on whether the special arrangements in the Greek legislation for taxing supplies of petroleum products comply with the provisions of the Sixth VAT Directive ('the Sixth Directive') 1 relating to the taxable amount and the right of deduction and, if not, whether those provisions have direct effect and can be relied on by a taxable person to claim a retrospective refund of tax from the date when the relevant Greek Law came into force, namely 1 January 1987.

The Greek legislation

2Article 11(1) and (2) of Greek Law No 1571/1985 ('the Petroleum Law') provide that the basic price of petroleum products is to be fixed regularly by ministerial order on the basis of factors determined by presidential decree, such as the cif price in Greek

* Original language: English.

1 — Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization 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.

I - 1 8 88 ports of finished products loaded in ports of EC Member States situated in the Mediterra nean or in Northern Europe. The basic price may be defined by ministerial order as the selling price on the domestic market of products coming from State refineries.

3 By virtue of Article 11(3) of the Petroleum Law additional economic factors to be taken into account in the formation of the selling price on the Greek market are to be determined by ministerial order. The difference between the selling price and the cif price in Greek ports is to cover the cost of transport, the specific cost of supplying frontier regions, regions facing difficulties and tourist regions, the profit margin of bulk dealers and retailers, stocking costs and other factors. The consumer price is also to be fixed by ministerial order, being the selling price increased by taxes, charges and levies in favour of the State or third parties.

4 At the material time for the purposes of these proceedings Greek Law No 1642/1986 on the application of VAT ('the VAT Law') laid down special rules for the taxation of petroleum products. Article 37 of the VAT Law provided as follows:

'1. In the supply and importation of finished petroleum products, the tax referred to in this Law is to be calculated on their basic price as defined by Article 11 of [the Petroleum Law] and Presidential Decree 619/1985. The said basic price is increased by duties, charges, the special tax on consumers and other levies in favour of the State or third parties, with the exception of the tax provided for in this Law.

3A company marketing petroleum products is liable to pay the tax. The questions of the time at which the tax liability arises, the amount of tax due and payment thereof are governed by the customs provisions in force for the levy of the special tax on the consumption of petroleum products, together with which the tax provided for in the present law is levied.

4In the supply of petroleum products, companies marketing petroleum, filling stations and other retailers and distributors are not obliged to submit returns under Article 31, nor do they have the right to deduct the tax provided for under Article 23. On invoices for the supply of finished petroleum products to the above persons, the tax is to be incorporated in the price and a note entered on the invoice "no deduction of value added tax".

5For the purposes of applying Article 24(1), the amount of annual turnover of the persons referred to in paragraph 4 supra arising from the supply of petroleum products is to be added to the denominator of the fraction laid down by that provision. Those persons are obliged to record purchases of petroleum products in a special column in their accounts.

6Transport and storage services for petroleum products are exempted from the tax referred to in this Law.

7Subject to the provisions in Article 23(4)(e), value added tax on petroleum products is to be deducted where the taxable person uses them either as a primary or secondary material in the production of goods, the supply of which is subject to that tax, or for the supply of taxable services ....'

5. Article 24(1), referred to in Article 37(5), provided:

'If the taxable person uses goods and services to carry out transactions in respect of some of which there is no right to deduct, the tax deducted is limited to a percentage of the total tax. The percentage is to be determined on the basis of a fraction, the numerator being the amount of annual turnover less the value added tax relating to transactions for which there is entitlement to deduct the tax, and the denominator being the sum of the transactions referred to in the numerator and the transactions on which there is no entitlement to deduct.'

The Community legislation

6. The Community VAT legislation does not contain any special arrangements for the taxation of petroleum products. However, the following general provisions are of relevance.

2 7. Article 2 of the First VAT Directive, as amended by Article 36 of the Sixth Directive, provides:

'The principle of the common system of value added tax involves the application to

2 — First Council Directive 67/227/EEC of 11 April 1967 on the harmonization of legislation of Member States concerning turnover taxes, OJ, English Special Edition 1967, p. 14. goods and services of a general tax on consumption exactly proportional to the price of the goods and services, whatever the number of transactions which take place in the production and distribution process before the stage at which tax is charged.

On each transaction, value added tax, calculated on the price of the goods or services at the rate applicable to such goods or services, shall be chargeable after deduction of the amount of value added tax borne directly by the various cost components.

The common system of value added tax shall be applied up to and including the retail trade stage.'

8Article 2 of the Sixth Directive provides:

'The following shall be subject to value added tax:

1. the supply of goods or services effected for consideration within the territory of the country by a taxable person acting as such; 2. the importation of goods.'

9Article 11 provides:

'A. Within the territory of the country

1. The taxable amount shall be:

(a) in respect of supplies of goods and services other than those referred to in (b), (c) and (d) below, everything which constitutes the consideration which has been or is to be obtained by the supplier from the purchaser, the customer or a third party for such supplies including subsidies directly linked to the price of such supplies;

B. Importation of goods

1. The taxable amount shall be:

(a) the price paid or to be paid by the importer, where this price is the sole consideration defined in A(1)(a); (b) the open market value, where no price is paid or where the price paid or to be paid is not the sole consideration for the imported goods.

2. Member States may adopt as taxable amount the value defined in Regulation (EEC) No 803/68.

10Article 17 provides:

'Origin and scope of the right to deduct

1. The right to deduct shall arise at the time when the deductible tax becomes chargeable.

2. In so far as the goods and services are used for the purposes of his taxable transactions, the taxable person shall be entitled to deduct from the tax which he is liable to pay:

(a) value added tax due or paid in respect of goods or services supplied or to be supplied to him by another taxable person;

(b) value added tax due or paid in respect of imported goods;

5. As regards goods and services to be used by a taxable person both for transactions covered by paragraphs 2 and 3, in respect of which value added tax is deductible, and for transactions in respect of which value added tax is not deductible, only such proportion of the value added tax shall be deductible as is attributable to the former transactions.

This proportion shall be determined, in accordance with Article 19, for all the transactions carried out by the taxable person.

3

11Article 19(1) provides:

'The proportion deductible under the first subparagraph of Article 17(5) shall be made up of a fraction having:

— as numerator, the total amount, exclusive of value added tax, of turnover per year attributable to transactions in respect of which value added tax is deductible under Article 17(2) and (3),

— as denominator, the total amount, exclusive of value added tax, of turnover per year attributable to transactions included in the numerator and to transactions in respect of which value added tax is not deductible. The Member States may also include in the denominator the amount of subsidies, other than those specified in Article 11 A(l)(a).

The proportion shall be determined on an annual basis, fixed as a percentage and rounded up to a figure not exceeding the next unit.'

The facts and the national court's questions appealed, has referred the following questions to this Court for a preliminary ruling:

12The plaintiff in the main proceedings '(1) Was the Greek Government entitled, for markets petroleum and related products in Greece. According to its VAT returns its turnover for the period from 1 January to 31 December 1987 amounted to DR 2 012 096 225. However, only 13% of its transactions (DR 251 189 876) gave rise to the right of deduction. The remaining 87% (DR 1 760 906 349) consisted in sales of petroleum products in respect of which the right of deduction was denied by Article 37(4) of the VAT Law. During the same period the plaintiff incurred DR 14 336 654 by way of input tax on general expenses. Pursuant to the VAT Law, in particular Articles 24(1) and 37(5), the plaintiff claimed deduction of only 13% of that amount (DR 1 863 765), i. e. the proportion attributable to turnover giving rise to the right of deduction. Subsequently, however, by an application of 31 December 1990 revoking its original returns on the ground of excusable error, the plaintiff claimed deduction of the remaining 87% (DR 12 472 889) of input tax not deducted on its original returns. In support of its claim it argued that the special method for taxing petroleum products was contrary to the provisions of the Sixth Directive, in particular Articles 11 and 17.

13The Administrative Court of First Instance, Athens, to which the plaintiff has whatever reason,

(a) under the rules contained in Article 37(1) and (4) of [the VAT Law], on the one hand, to subject the importation of finished petroleum products to value added tax to be calculated on the basic price referred to above, which differs from that provided for in Article 11 A(l) and B(l) and (2) of the Sixth Council Directive, and, on the other hand, to exempt companies marketing petroleum products, filling stations and other retail sellers from the obligation to submit related returns, thus depriving them of the right to deduct the tax; and

(b) to exempt from the tax, pursuant to Article 37(6) of [the VAT Law], services in respect of the transport and storage of petroleum products unconnected with the transport etc. of those products from the first to another named destination?

(2) If the reply is in the negative, that is to say, if the Greek Government was not so entitled, are Article 11A(1) and B(l) and (2) and Article 17(1) and (2) of the Sixth Directive unconditional and sufficiently clear, enabling the plaintiff company to rely upon them as superior law before the Administrative Court of First Instance before which the case is pending?

Further, if the latter is the case, in application of those provisions in the directive, may the taxable person request retrospectively from 1 January 1987 when [the VAT Law] came into force deduction of the tax on the inputs referred to which was not deducted and a refund of the amount of any tax paid on that basis for 1987 which was not due?'

Admissibility of the questions

14The Greek Government puts forward a series of contentions regarding the admissibility of the national court's questions. It seems to me that only one of those contentions merits close consideration, namely that Question 1 is inadmissible because the national court does not explain the connection between the method of taxing imports and supplies of petroleum products under Article 37(1) of the VAT Law and the calculation of the deductible proportion under Article 24(1) of the Law; nor does it explain the relevance to the dispute of a ruling by the Court on the compatibility of Article 37(1) of the Law with Article 11 of the Sixth Directive or the compatibility of Article 37(6) of the Law with the directive.

15It is true that the dispute, as described in the order for reference, is limited to the right of the plaintiff in the main proceedings, a petroleum-marketing company, to deduct tax on its general expenses. Consequently, the plaintiff's claim is ultimately based solely on Article 17 of the Sixth Directive. However, as I shall explain below, the refusal of deduction of tax is intimately linked with the special VAT arrangements under Greek law for petroleum products, and in my view the national court quite reasonably considered that it was desirable to seek a ruling which would enable it to decide on the compatibility with Community law of those arrangements as a whole, including the rule refusing deduction of tax. I therefore consider that the Court should reply to Question 1 as put by the national court, reformulating it only in so far as is necessary to avoid ruling directly on the Greek legislation.

Question 1(a)

16In its written observations the plaintiff contends that the Greek legislation conflicts with Articles 11 and 17 of the directive, a view that is shared by the Commission. The Greek Government, on the other hand, contends that its legislation does not depart from the Community rules, but merely lays down accounting arrangements adapted to the Greek market. On that market the price of petroleum products is fixed and remains the same from the moment when the products leave the refineries to the moment when they are supplied to the final consumer. The VAT arrangements take account of this by providing for collection of tax on the full consumer price at the beginning of the marketing process. That price, which includes all taxes, duties, levies and charges except for the VAT itself, the profit margin of intermediaries in the marketing chain as well as transport and storage costs, is in conformity with Article 11. Charging and deduction of tax at later marketing stages is unnecessary since the products have been fully taxed at the first stage and the tax is passed down the marketing chain to the consumer in the price of the products. The Greek arrangements do not alter the tax burden for the final consumer.

17In my view the Greek rules depart both in form and in substance from those of the First and Sixth Directives. This may be illustrated by the following example taken from the Greek Government's written observations:

Company B, a petroleum marketing company, acquires petroleum products from petroleum company A for DR 200 per litre, made up of the basic price of DR 190 (including the gross profit margin and any taxes and duties) and VAT of DR 10. 3F rom that price of DR 200 company Β takes a commission of DR 6 per litre. Under the Greek rules VAT is levied at a single stage, namely on importation of the products by company A. Company A passes on to company Β the VAT paid on importation as a component of its selling price. Company Β neither charges VAT on the resale of the products nor deducts VAT on their purchase from company A; however, the VAT is a component of company B's selling price.

18It is clear from the foregoing example that the essential difference between the Greek rules and the Community rules is that the former impose VAT on petroleum products as a single levy at the beginning of the marketing process. They are therefore contrary to the fundamental principle, laid down by Article 2 of the First Directive, that VAT should be imposed at all stages of production and distribution.

19The Greek arrangements also infringe a number of specific provisions of the Sixth Directive, in particular Articles 2, 11 and 17.

3 — According to α second example given by the Greek Government, the selling price of DR 200 could alternatively be made up of a basic price of DR 175, a gross profit margin of DR 15 and VAT of DR 10. The different methods of fixing the basic price under the Petroleum Law do not appear to affect the VAT treatment.

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20Article 2 subjects to tax the supply 'of goods ... effected for consideration within the territory of the country by a taxable person acting as such'. By virtue of that provision the sale of petroleum products by both company A and company Β ought to be taxed, whereas under the Greek rules tax is levied solely on the importation of the products by company A.

21Article 11 A(l)(a) provides that the taxable amount in respect of domestic transactions is in principle the consideration which has been or is to be obtained by the supplier; actually paid or payable for the goods when sold for export to the customs territory of the Community: see Article 3.

22The effect of those rules is to ensure that VAT is charged at each marketing stage on the price or value of the goods at that stage. However, it is apparent from the above example that under the Greek rules VAT is levied once and for all on importation on the basis of the final consumer price of the goods on the Greek market.

accordingly, Article 11 A(3)(b) excludes from the taxable amount price discounts and rebates allowed to the customer and accounted for at the time of the supply. Article 11B(1) provides that the taxable amount for imports is the price paid by the importer where the price is the sole consideration, or the open market value where no price is paid or the price paid is not the sole consideration. Under Article 11B(2) Member States may alternatively adopt as the taxable amount for imports the value defined in Council Regulation (EEC) No 803/68 of 27 June 1968 on the valuation of goods for customs purposes. 4 That regulation was replaced by Council Regulation (EEC) No 5 1224/80 of 28 May 1980. Under that regulation the primary value for customs purposes is the transaction value, i. e. the price

4 — OJ, English Special Edition 1968, p. 170.

5 — OJ 1980 L 134, p. 1. The relevant rules are now contained in Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (OJ 1992 L 302, p. 1), which repealed Regulation No 1224/80.

23Finally, Article 17(2) confers on taxable persons the right to deduct VAT on goods and services in so far as they are used for the purposes of taxable transactions. As already noted, company B's sales of petroleum products are taxable transactions by virtue of Article 2 and ought to give rise to deduction of tax.

24I do not share the Greek Government's view that the differences between its rules and the Community legislation can be dismissed as mere accounting arrangements. As I have demonstrated, the Greek rules depart from the Community legislation with respect to basic notions such as taxable transactions, the taxable amount and the right of deduction.

25Moreover, they lead to substantially different results. The Greek Government appears to be correct in its assertion that its rules do not affect the tax burden on the final consumer. The government confirmed at the hearing that special provision is made to ensure that taxable persons who purchase petroleum products for the purposes of their business rather than for the purpose of re-sale do not incur an irrecoverable VAT cost.

26There nevertheless remains an important defect in the rules which is of direct relevance to the dispute in the main proceedings. This may be illustrated by expanding the above example given by the Greek Government. Let us suppose that, during the period in question, 80% of company B's turnover derives from sales of petroleum products and 20% derives from other transactions, all of which are taxable. Let us suppose further that during the same period company Β incurs VAT of DR 10 000 000 on general expenses attributable to its business as a whole.

27Under the rules of the Sixth Directive the tax would function normally in such a case. Since there is no exemption in the Sixth Directive for supplies of petroleum products, company B's entire turnover would be taxable and give rise to deduction of tax. Consequently, Article 17(5), which concerns the case where a taxable person purchases goods and services partly for the purpose of transactions not giving rise to the right of deduction, would not apply. The same is true of Article 19(1), which lays down the fraction to be used in calculating the deductible proportion in such a case. Company Β would therefore be entitled to full deduction of tax on its general expenses.

28Under the Greek rules, however, company B's sales of petroleum products would not give rise to deduction. Consequently, Article 24(1) of the VAT Law, which implements Article 19(1) of the directive, would apply. By virtue of Article 24(1), in conjunction with Article 37(5) of the Law, company Β would be entitled to deduct only 20% (i. e. DR 2 000 000) of the VAT on its general expenses, since its turnover giving rise to deduction represents only 20% of its total turnover (i. e. the total of its turnover giving rise to the right of deduction and its turnover not so giving rise, namely its petroleum sales).

29It is this aspect of the Greek legislation which has led to the dispute in the main proceedings. As noted above, under the rules of the Sixth Directive the supply by a taxable person of petroleum products, which is a taxable transaction, would not lead to a restriction of his right to deduct tax on general expenses. The plaintiff in the main proceedings correctly concludes that it was wrongly refused deduction of tax on such expenses.

30The plaintiff's claim for a refund of tax does not appear to extend to the VAT incurred on its purchases of petroleum products. In my view the plaintiff correctly limits its claim in that way. Under the Greek rules the plaintiff neither pays VAT to the tax authorities on its sales of petroleum products nor deducts VAT on the purchase of such products. Nor does it ultimately bear the VAT burden on the products, since it passes the VAT on to its customers as a hidden component of their price. While under the rules of the Sixth Directive it would be entitled to deduct VAT on the purchase of the products, the benefit of that deduction would be wholly cancelled out by the output tax which it would be obliged to pay on the sale of the products. Consequently, the plaintiff does not incur any additional VAT burden as a result of being unable to deduct VAT on the petroleum products themselves.

31It might be objected that the Sixth Directive cannot, in the absence of implementation, impose an obligation on the plaintiff to pay tax on its sales of petroleum products since a directive can only confer rights on individuals and cannot impose obligations on them unless implemented in national law; the output tax which would be payable if the directive had been properly implemented must therefore be disregarded in calculating the refund to which the plaintiff is entitled under the directive. However, in the case of a directive such as the Sixth Directive, which lays down a comprehensive scheme of taxation, it is in my view possible to determine whether a taxable person has overpaid tax under national rules only by considering the combined effect of all relevant provisions of the directive on the transactions in question and by comparing the resultant liability with that arising under the national rules. The provisions determining the liability of a taxable person in respect of particular transactions must be regarded as an inseparable whole.

32No such difficulty arises in relation to the plaintiff's claim for a refund of the VAT incurred on its general expenses. As the above example demonstrates, the refusal to allow deduction of part of such VAT causes the plaintiff to incur an irrecoverable VAT cost contrary to the Sixth Directive.

33This aspect of the Greek legislation is in fact puzzling since it does not fit in with the logic of the special arrangements for petroleum products. The rationale for the partial disallowance of deduction of VAT under Articles 17(5) and 19(1) of the Sixth Directive, which Article 24(1) of the VAT Law is intended to implement, is that deduction of tax on goods and services is not justified in so far as they are used for the purpose of making supplies that are not taxed. If VAT were deductible on the cost components of tax-free supplies, this would result in tax avoidance. However, under the Greek rules the sale of petroleum products is not tax-free. The products are taxed on the full consumer price at the beginning of the marketing process. Their sale by intermediaries does not give rise to further taxation or to deduction of tax purely for technical reasons, i. e. because under the Greek arrangements tax is charged at a single stage and is then passed on as a hidden component of the price.

34The Greek Government contends, in the alternative, that its rules, although derogating from the Sixth Directive, have been authorized by the Council under the procedure laid down in Article 27(1) to (4) of the Sixth Directive, which provides:

'1. The Council, acting unanimously on a proposal from the Commission, may authorize any Member State to introduce special measures for derogation from the provisions of this Directive, in order to simplify the procedure for charging the tax or to prevent certain types of tax evasion or avoidance. Measures intended to simplify the procedure for charging the tax, except to a negligible extent, may not affect the amount of tax due at the final consumption stage.

2. A Member State wishing to introduce the measures referred to in paragraph 1 shall inform the Commission of them and shall provide the Commission with all relevant information.

3. The Commission shall inform the other Member States of the proposed measures within one month.

4. The Council's decision shall be deemed to have been adopted if, within two months of the other Member States being informed as laid down in the previous paragraph, neither the Commission nor any Member State has requested that the matter be raised by the Council.'

35The Greek Government claims that, by bringing the entire text of the draft VAT Law to the notice of the Commission, it complied with Article 27(2). The special arrangements were therefore tacitly approved by the Council under Article 27(4).

36However, the view that it is sufficient for a Member State to notify the text of all or part of its legislation without drawing attention to specific measures is inconsistent with the terms of Article 27(2) to (4) and with the procedure laid down in those provisions. The Commission is obliged to notify proposed measures to the other Member States within one month. Moreover, unless the matter is raised in the Council a decision is deemed to be taken two months after such notification. Notwithstanding that short

I - 1 8 99 period for tacit approval of measures, notification is far from being a mere formality. Measures authorized under Article 27 must pursue the aims stated in Article 27(1) and may not derogate from the rules of the directive, 'except within the limits strictly necessary for achieving those aims': see paragraph 29 of the judgment in Commission ν 6 Belgium. It is therefore essential that the Member States and, in particular, the Commission should be given a proper opportunity to examine proposed measures in order to verify that those requirements are met. In view of the time limits imposed by Article 27, this is possible only if specific notice is given of the proposed measures.

37Moreover, in my view the Greek rules could not — at least not without substantial modification — properly be authorized under Article 27. Even if one accepts the Greek Government's assertion that the rules are necessary to prevent tax avoidance or evasion, it is, as I have already explained (see paragraph 33), difficult to see why the limitation on the deduction of input tax on general expenses is a necessary part of such arrangements. This aspect of the rules does not seem strictly necessary for the purpose of achieving the aim of the arrangements as required by the judgment in Commission ν Belgium. 7

6 — Case 324/82 [1984] ECR 1861.

7 — Cited above in note 6.

38I therefore conclude that the Greek Government was not entitled to apply arrangements such as those described in Question 1(a).

Question 1(b)

39By this question the national court asks whether the Greek Government was entitled to exempt from tax services connected with the transport and storage of petroleum products unconnected with the transport of those products from the first to another named destination.

40This question must also be given a negative reply.

41Article 11B(3) of the Sixth Directive provides that the taxable amount is to include:

'(b) incidental expenses, such as commission, packing, transport and insurance costs, incurred up to the first place of destination within the territory of the country.

"First place of destination" shall mean the place mentioned on the consignment note or any other transport document by means of which the goods are imported into the country of importation. In the absence of such an indication, the first place of destination shall be taken to be the place of the first transfer of cargo in that country.

Equally, the Member States may include in the taxable amount the incidental expenses referred to above where they result from transport to another place of destination, if the latter is known at the time when the chargeable event occurs.'

42Article 14(1)(i) of the Sixth Directive exempts:

'... the supply of services, in connection with the importation of goods where the value of such services is included in the taxable amount in accordance with Article 11B(3)(b).'

43By virtue of Article 17(3)(b) VAT is deductible on supplies of goods and services used for services exempted under Article 14(1)(i).

44It is clear from those provisions that the reason for the exemption for services connected with the importation of goods in Article 14(1)(i) is that the cost of such services is already included, pursuant to Article 11 B(3)(b), in the taxable amount for the importation of the goods to which the services relate. Since, notwithstanding that exemption, VAT is deductible on goods and services used in providing such services, VAT remains fully deductible on the cost components of the imported goods.

45Article 37(6) of the VAT Law exempts all transport and storage services for petroleum products. That Article 37(6), unlike Article 14(1)(i) of the directive, does not limit the exemption to expenses on services incurred up to the first place of destination or another known place of destination may be explained by the fact that under the Greek rules the taxable amount for imports of petroleum products is based on the consumer price, thus including the cost of all services incurred up to the final marketing stage.

Ι-1901

46However, those arrangements, like those for the petroleum products themselves, are contrary to the Sixth Directive, which contains no exemption for such services except within the limits defined by Article 14(l)(i). Nor, for the reasons given in relation to Question 1(a), can they be regarded as having been notified and tacitly authorized under Article 27 of the directive.

Question 2

47By the first part of this question the national court asks whether Article 11 A(l) and B(l) and (2) and Article 17(1) and (2) of the Sixth Directive have direct effect.

48It is clear from a reading of those provisions that they meet the requirements of being unconditional and sufficiently precise. That is so notwithstanding the discretion accorded to the Member States by Article 11B(2) to adopt as the taxable amount for imports the value defined in Regulation No 803/68. A taxable person may nevertheless rely on Article 11 to resist the application of a taxable amount which conforms neither to Article 11B(1) nor to Article 11B(2).

49It may be noted moreover that the direct effect of Article 11A(1) does not appear to have been questioned in the cases in which preliminary rulings have been sought on that provision: see in particular Naturally Yours Cosmetics Ltd ν Commissioners of Customs and Excise, 8 Boots ν Commissioners of Cus9 toms and Excise and Empire Stores ν Com10 missioners of Customs and Excise. The same applies to Article 17(2) of the directive: 1 see in particular Intiem 1 and Lennartz ν Finanzamt München III. 12

50In the second part of Question 2 the national court asks whether a taxable person may claim a refund of the tax overpaid under the Greek Law retrospectively from 1 January 1987, the date when the Law came into force.

51It may be noted that the Sixth Directive does not lay down rules concerning the time limits for claims for the refund of overpaid tax or the grounds on which such claims may be made.

52The Court has held that: 'in the absence of Community rules on the subject, it is for the domestic legal system of each Member

8 — Case 230/87 [1988] ECR 6365.

9 — Case C-126/88 [1990] ECR 1-1235.

10 — Case C-33/93 [1994] ECR 1-2329.

11 — Case 165/86 Leesportefeuille 'Intiem' CV ν Staatssecretaris van Financiën [1988] ECR 1471.

12 — Case C-97/90 [1991] ECR 1-3795.

State to determine the procedural conditions governing actions at law intended to ensure the protection of the rights which individuals derive from the direct effect of Community law, provided that such conditions are not less favourable than those relating to similar actions of a domestic nature nor framed so as to render virtually impossible the exercise of rights conferred by Community law': see paragraph 16 of the judgment in Emmott, 13 where the Court reaffirmed the principles 1 15 laid down in Rewe 4 and San Giorgio.

53The Court has thus sought to achieve a balance between the need to ensure the effectiveness of Community law and the right of Member States, in the absence of relevant Community provisions, to lay down procedural rules governing administrative and judicial proceedings. Time-limits for appeals in tax matters must be regarded as an application of the principle of legal certainty protecting both the taxpayer and the administra16 tion; they are also consistent with the principle of sound administration.

54The imposition by a Member State of a reasonable time-limit for appeals in respect of a tax year cannot be considered to make reliance on Community law virtually impos

13 — Case C-208/90 Emmott ν Minister for Soniti Welfare and Attorney Cenerai [1991] ECR 1-4269.

14 — See Case 33/76 Rewe ν Landwirtschaftskarnme · Suarianti [1976] ECR 1989, paragraph 5 of the judgment.

15 — Case 199/82 Amministrazione delle Finanze dello Stato v SpA San Giorgio [1983] ECR 3595.

16 — Rewe, cited in note 14.

17 sible or, to use the phrase employed else8 where by the Court, excessively difficult. 1 It appears that Greek law lays down a time-limit for appeals of three years from the end 19 of the tax year concerned. Such a time-limit does not seem unreasonably short.

2

55It is true that in Emmott, 0 a case con21 cerning the Equal Treatment Directive, the Court held that, owing to the particular nature of directives, 'until such time as a directive has been properly transposed, a defaulting Member State may not rely on an individual's delay in initiating proceedings against it in order to protect rights conferred upon him by the provisions of the directive and that a period laid down by national law within which proceedings must be initiated cannot begin to run before that time'.

56However, in its judgments in Steenhorst-22 23 Neerings and Johnson, the Court held that the Emmott ruling was to be regarded as

17 — Sec Reive, cited above in note 14, paragraph 5 of the judgment; San Giorgio, cited above in note 15, paragraph 12; Emmott, cited above in note 13, paragraph 16. See also Joined Cases C-31/91 to C-44/91 Lageder & Others [1993] ECR I-1761, paragraphs 27 to 29.

18 — See San Giorgio, cited in note 15, paragraph 14 of the judgment; Joined Cases C-6/90 and C-9/90 Francovich & Others [1991] ECR I-5357, paragraph 43.

19 — Article 91(2) of Legislative Decree 321 of 17-18 October 1969, Official Journal of the Greek Government A 205. 20 — Cited above in note 13, paragraph 23 of the judgment. 21 — Council Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security, OJ 1979 L 6, p. 24.

22 — Case C-338/91 Stcenhorst-Ncerings v Bestuur van de Bedrijfsvereniging voor Detailhandel, Ambachten en Huisvrouwen [1993] ECR I-5475.

23 — Case C-140/92 Johnson v Chief Adjudication Officer [1994] ECR I-5483, paragraph 26.

confined to 'the particular circumstances of that case, in which a time-bar had the result of depriving the applicant of any opportunity whatever to rely on her right to equal treatment under the directive'.

57Consequently it appears that the plaintiff can succeed only if its application was made within the time-limit laid down by national law. That may be the case since it appears that the plaintiff submitted its application revoking its tax returns for 1987 on 31 December 1990, i. e. on the last day of the three-year period following the tax year in question.

58The question then is whether the plaintiff can rely on the failure of Greece to implement the directive. In my view it follows from the principle that claims based on Community law must not be treated less favourably than claims based on national law that, wherever taxable persons are entitled to a refund of tax in respect of a particular tax year on grounds recognized by national law, that possibility must extend to claims based on Community law; that is so regardless of the .nature of the grounds recognised by national law. It is not, in my view, necessary to engage in the difficult and somewhat artificial exercise of seeking a comparable claim under national law. Indeed such an approach does not follow from the Court's case-law on this matter. That case-law is based on the principle that, subject to the requirement of ensuring the effectiveness of Community law, it is for the Member States, in the absence of harmonized rules, to decide upon the appropriate balance between the requirements of legal certainty and sound administration and the need to ensure the correct application of the tax in a particular tax year. Where a Member State allows a tax year to be re-opened at the instance of the taxable person within a certain period on any ground, it accepts by implication that for the period for which the claim is permitted it is the need to ensure correct application of the tax which takes precedence. The Member State cannot therefore object that a claim based on Community law must be refused on grounds of legal certainty or sound administration.

59That conclusion is particularly appropriate in the case of a Member State's failure to implement a directive, where the State itself is at fault and has led the taxable person to make the error in question. A taxpayer must be entitled to assume, when preparing his tax returns, that the national legislation has correctly implemented all relevant Community directives, and is therefore entitled to rely exclusively on the national legislation for that purpose. If subsequently he discovers that the national legislation is defective, then it must be open to him to seek a revision of his assessment within the time-limit laid down by national law for revision on any other ground.

60The position is in any event clear where

61I should finally comment briefly on the national law provides for revision of an Greek Government's remark at the hearing assessment on the ground of the taxpayer's that the success of a claim for reimbursement excusable error, as appears to be the case of overpaid tax depended in part on whether here. In such circumstances, it must be open the VAT had been passed on to the final conto the taxpayer to claim a revision of his sumer. Since under the Greek arrangements assessment, since the error in question can be for petroleum products the selling price of said to be directly attributable to the Memthe products is fixed, it is in this case difficult ber State's failure to implement the Directo see how a petroleum-marketing company tive.

would be able to pass on overpaid VAT to its customers.

Conclusion

62Accordingly I am of the opinion that the questions referred should be answered as follows:

1) (a) The provisions of the Sixth VAT Directive, in particular Articles 2, 11 and 17, prohibit a Member State from applying rules under which VAT is imposed on the importation of petroleum products by reference to a basic price such as that defined in the order for reference and under which petroleum-marketing companies, filling stations and other retailers neither account for tax on their supplies of such products nor deduct tax on the purchase thereof.

(b) The Sixth Directive, in particular Article 14(1 )(i), does not permit a Member State to exempt from tax services relating to the transport and storage of petroleum products unconnected with the transport of such products to the first place of destination or to another place of destination known when the chargeable event occurs.

2) (a) Article 11A(1) and B(l) and (2) and Article 17(1) and (2) have direct effect and may therefore be relied upon by a taxable person before a national court in order to resist the application by national tax authorities of incompatible national law.

(b) In the absence of relevant Community rules, it is for national law to determine whether a taxable person may request a refund of tax retrospectively from the date of the entry into force of a national law which is contrary to Community law. However, national procedural rules must not discriminate between claims based on national law and those based on Community law and must not render excessively difficult the protection of rights guaranteed by Community law. Where national law provides for the refund of overpaid tax on grounds such as error, that provision must extend to claims based on the failure of the Member State concerned to implement correctly the Community legislation.