The erroneous application of privileges for dairy products caused losses of 99 million lei to the state - the Competition Council.
Such conclusions were reached by the plenum of the Competition Council (CC) after an investigation on the dairy products market, initiated in April 2019. The CC found, in particular, that the Center for Applied Metrology and Certification (the legal assignee of the National Institute of Standardization and Metrology) violated a provision of the Competition Law by providing JLC, Incomlac, Lactis and Floresti Butter Factory with a benefit not provided by law by wrongly assigning tariff positions on dairy products containing foreign fats. The CC found that the National Institute of Standardization and Metrology unreasonably assigned the tariff items 040390690 and 040610200 (certain dairy products and fresh cheese) to cheese and cream products containing foreign fats. Accordingly, for 8 years until 2019, companies sold cheese and cream products containing foreign fats at a reduced VAT rate of 8% instead of 20%. This led to the creation of discriminatory operating conditions for other producers of cheese and cream products containing foreign fats, who sold such products on the market at the standard VAT rate of 20%. Also, companies producing dairy products containing only dairy fats were in unequal conditions - they had higher costs for purchasing dairy fat, or they had no opportunity to place dairy products on the market with sufficient profitability, or the dairy products were not price competitive with dairy products containing foreign fats. The erroneous application of the reduced VAT rate also resulted in a reduction of budget revenues - by 99 million lei. The State Tax (STS) Service was informed about the Court of Accounts’ decision and STS is to take further steps to verify the correctness of tax payments by the companies concerned. // 31.05.2022 – InfoMarket
