United Biscuits (UK) Ltd (t/a Simmers) v Commissioners of Customs and Excise
| Jurisdiction | Scotland |
| Judgment Date | 13 March 1992 |
| Date | 13 March 1992 |
| Court | Court of Session |
Court of Session (Inner House).
Lord Allanbridge, Lord Murray and Lord Brand.
C J Harris (instructed by Shepherd & Wedderburn WS) for the Crown.
Colin Tyre (instructed by W & J Burness WS) for the taxpayer company.
The following cases were referred to in the opinion of the court:
British Airways plc v C & E Commrs VAT(1990) 5 BVC 97
Cando 70 (1978) VATTR 211
C & E Commrs v Automobile Association WLRVAT[1974] 1 WLR 1447; (1974) 1 BVC 8
Trewby (on behalf of himself and the members of Hurlingham Club) v C & E Commrs WLRVAT[1976] 1 WLR 932; (1976) 1 BVC 80
Value added tax - Single or mixed supply - Biscuits in tin supplied to retailers - Whether single supply of zero-rated biscuits - Whether two separate supplies of zero-rated biscuits and standard-rated tins - Value Added Tax Act 1983 section 2 subsec-or-para (1) schedule 5 group 1Value Added Tax Act 1983, sec. 2(1), 3(2)(a), Sch. 5, Grp. 1.
This was an appeal by the Commissioners of Customs and Excise from a decision of the VAT tribunal ((1990) 5 BVC 821) that biscuits packed in a tin came within the commissioners' concession (VAT guide No. 700, para. 18) by which normal and necessary packaging was to be treated as part of the goods which it contained and therefore constituted a single zero-rated supply.
The taxpayer company supplied to a retailer, biscuits in a tin, which was made of ordinary gauge metal exactly fitting four packets of assorted biscuits. The tin was decorated with harvesting scenes on the lid and four sides, with no writing on them. On the base there was a description of the biscuits, their ingredients, their flavours, the country of origin and the retailer. The tin contained four packets of biscuits wrapped in cellophane.
The issue was whether the supply constituted a single supply of zero-rated biscuits, or a mixed supply of zero-rated biscuits and standard-rated tins.
The VAT tribunal decided that the supply was a single zero-rated supply of biscuits since the tin was to be treated as part of the goods it contained, coming within the commissioners' concession with regard to normal and necessary packaging.
The commissioners appealed to the Court of Session contending that the tribunal had no jurisdiction to construe the provisions of an extra-statutory concession, and that the tribunal erred in not holding that the supply constituted two separate supplies of zero-rated biscuits and standard-rated tins.
The taxpayer company accepted that the tribunal had erred in law in treating the issues as arising out of the VAT guide concession, but submitted that applying the correct legal test, namely whether the supply of the tin was incidental to the supply of the biscuits, the tribunal had reached the right conclusion.
Held, dismissing the commissioners' appeal:
Although the tribunal had wrongly treated the issues as arising out of an extra-statutory concession, on applying the correct legal test, namely whether the tin was incidental or integral to the supply of the biscuits, what was supplied was biscuits in a tin rather than a general purpose container with biscuits in it. The tin was therefore incidental and integral to the biscuits. Accordingly the tribunal had reached the correct conclusion that the supply was a single zero-rated supply of biscuits. (British Airways plc v C & E Commrs) TAX[1990] BTC 5, 124 applied.
The commissioners are appellants in this appeal from the VAT tribunal sitting in Edinburgh. The respondents ("the company") appealed to the tribunal against decisions of the commissioners dated 8 February 1990 and 27 April 1990 whereby the commissioners decided that the company's supply of St Michael Cookie Tin biscuits to retailers should be treated as a "mixed supply" for VAT purposes. Biscuits as food are zero-rated under Value Added Tax Act 1983 schedule 5 group 1Grp. 1 of Sch. 5 to the Value Added Tax Act 1983. Packaging, on the other hand, is not zero-rated nor excepted.
Before the tribunal the company contended that biscuits packed in a tin for retail purposes constituted a supply of biscuits only, with respect to VAT, the provision of the tin being only incidental. As biscuits were zero-rated, the product should be zero-rated. The tribunal upheld the appeal and held that the product should be zero-rated. The commissioners appealed to the Court of Session under section 13sec. 13 of the Tribunals and Inquiries Act 1971. In explaining their decision the tribunal stated:
The question is whether the said supply falls within the terms of a concession by the [company] in relation to such goods, which is in the following terms (VAT guide No. 700, para. 18): "Normal and necessary packaging, including ordinary tins, bottles and jars, is treated as part of the goods which it contains. The price which your customer pays is treated as a payment for the contents of the packaging alone. This means that if your supply of the contents is zero-rated, zero rating also applies to the packaging." The package in the present case is a container consisting of a tin of ordinary gauge metal which exactly fits four packets of assorted biscuits. The biscuits are...
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