FUEL EXCISE TAX APPLICATIONS

Celalettin KIZILKAN
Import Group Manager

Special Consumption Tax (SCT) is a tax determined on a product basis, generally imposed on luxury consumer goods, excluding fuel products. According to the provision of paragraph (c) of Article 19 of the Special Consumption Tax Law No. 4760 dated 6/6/2002, special consumption tax (SCT) came into force on 1 August 2002. According to the Special Consumption Tax law, products are included in 4 different lists. In this article, we will include explanations regarding the provisions regarding the goods included in the list (I) annexed to the Special Consumption Tax Law and the procedures and principles regarding these provisions and how the said Law is applied to fuel oils.

The subject of the tax is the delivery of the goods in list (I), which are within the scope of SCT, by their importers or manufacturers, including refineries, or their sale by auction before the SCT is applied. Article 1 of the Special Consumption Tax Law stipulates that the goods subject to the tax will be subject to SCT "once only". For this reason, tax is not applied on subsequent deliveries of goods on which SCT has been paid. 1. Scope of Goods in List (I) List (I), which consists of petroleum products, natural gas and their derivatives and biodiesel, consists of table (A). In this table, fuel products such as gasoline, diesel, jet fuel and fuel oil are generally included; liquefied petroleum gas (L.P.G.), natural gas and petroleum derivatives that can be substituted for these goods, petcoke and other similar goods.

Determining whether the goods are within the scope of List No. (I), the goods falling within the scope of List No. (I) annexed to the Special Consumption Tax Law, the Customs Tariff Statistics Position (G.T.İ.P.) in the Turkish Customs Tariff Schedule in the List No. (I) annexed to the Law. ) were determined by their numbers. In accordance with paragraph (2) of Article 1 of the Special Consumption Tax Law, the goods included in the lists annexed to this Law are the goods defined in the Turkish Customs Tariff Schedule. In order to evaluate whether any good imported or manufactured domestically within the framework of this provision is subject to Special Consumption Tax within the scope of list (I), the G.T.İ.P. The number must be known. G.T.I.P. The determination of the number is made by the Ministry of Commerce. Therefore, G.T.İ.P. by the Ministry of Commerce. If the goods whose number is determined are included in the list (I) annexed to the Special Consumption Tax Law, they are subject to Special Consumption Tax, and if they are not included, they are not subject to this tax. Undoubtedly, when a good subject to tax within the scope of this list is delivered within the scope of the exemptions in the Special Consumption Tax Law, tax is not accrued.

In Article 3 of the Special Consumption Tax Law, the taxable event for the goods in list (I) is determined and determined separately according to the characteristics of the transactions. The event that gives rise to tax is the delivery of the goods in list (I) by the manufacturers or importers and the sale of these goods through auction before the application of Special Consumption Tax. However, in cases where an invoice or similar documents are submitted before the delivery of the goods, the taxable event occurs at the time the invoice or similar documents are issued, limited to the amount shown in these documents. In cases where it is customary or agreed to deliver goods in parts, the event that gives rise to tax is the delivery of each part.

Export deliveries of goods within the scope of SCT are exempt from tax within the conditions specified in subparagraphs (a) and (b) of paragraph (1) of Article 5 of the Law. Export deliveries of SCT taxpayers. In accordance with paragraph (1) of Article 5 of the Special Consumption Tax Law, goods delivered to customers abroad and leaving the Customs Territory of the Republic of Turkey are exempt from SCT. In the application of this article, the term customer abroad is; It refers to buyers whose residences, workplaces, legal and business centers are abroad, and branches of a domestic business operating abroad. Those who manufacture goods within the scope of Special Consumption Tax also benefit from the export exemption when delivering the said goods to offices, representative offices, agencies or similar organizations abroad for use or sale there. Deliveries made to foreign flagged ships, air transport vehicles of foreign airline companies and domestic sea and air transport vehicles operating internationally are also considered as export deliveries. Export exemption does not apply to goods delivered in Turkey to persons or organizations in Turkey acting on behalf of the buyer abroad, or to the buyer himself, for processing or evaluation in any way before being exported. Special Consumption Tax is not calculated on the invoice issued for export deliveries made in accordance with these conditions. In this way, SCT payers declare the SCT amounts that they do not include in the invoice amount and the quantities of goods they deliver within the scope of this exception by selecting the phrase "Export Exemption" in the "Exceptions" section of the "Exceptions and Discounts" section of the SCT declaration number (1).

In Article 1 of the annex to the Decision of the Council of Ministers No. 2003/5868 dated 1/7/2003; It has been stated that the SCT amount of fuel to be given to ships registered in the Turkish International Ship Registry and the National Ship Registry, carrying exclusively cargo and passengers on the cabotage line, commercial yachts, service and fishing ships, has been reduced to zero, provided that the amount is determined according to the technical specifications of each ship and recorded in the logbook of the ship that will use this fuel. Thus, fuel deliveries to marine vessels are included in the scope of exception.

It is mandatory to obtain a guarantee in the amount of Special Consumption Tax for the import of goods in the list (I) annexed to the Special Consumption Tax Law. A cash guarantee in Turkish Lira or a bank guarantee letter stating that it is issued for SCT, which is reported to be related to SCT over the SCT amount in force for these goods, is given to the customs administration. Unless this guarantee is provided, customs clearance will not be carried out. On the other hand, SCT taxpayers who have the "Unguaranteed Air Fuel Purchase Certificate" included in the Annex (Annex: 7B) of the SCT No. Bank letters of guarantee must be issued on behalf of the Ministry of Commerce for the goods included in table (A) of list (I).

Due to the SCT and VAT burden on petroleum products, retail sales are made in Turkey at the world's relatively highest price. In accordance with the Petroleum Market Law, the "free pricing system" was introduced as of January 1, 2005. With this system, fuel distribution companies in the sector are free to determine the warehouse sales price according to different price policies, and dealers are free to apply the ceiling pump sales prices recommended to them by the distribution companies or to apply their own pump sales prices according to the competitive conditions of their region. Retail sales prices in Turkey are determined by taking into account competitive conditions. The price at the refinery is formed as follows: Duty-free refinery price + SCT + EMRA share = Refinery sales price (excluding VAT) Considering that there is currently 2.5 TL SCT per liter of diesel and the pump sales price of diesel is 6 TL, a SCT burden of approximately B on the retail price It can be said that there is.

SOURCE:

SCT Law

Special Consumption Tax Number 1 List Implementation Communiqué

QUESTIONS AND ANSWERS

Question 1. What kind of tax is Special Consumption Tax (SCT)?

Answer: In addition to luxury consumer goods in general, it is an indirect tax determined at a high rate to get rid of some harmful habits of the society. This tax is collected in different forms, either as a lump sum or proportionally.

Question 2. On which products is SCT applied?

Answer: Luxury consumer products (motor vehicles, jewellery, fur, white/brown goods) Products that are harmful to human health (alcoholic beverages and tobacco products)

Products that harm the environment (fuel oil, oil-derived products)

Question 3. Which goods are included in Schedule A of List No. 1 annexed to the Special Consumption Tax Law?

Answer: In table A of list number I; fuel products, natural gas and LPG.

Question 4. Who is obliged to pay SCT?

Answer: Special Consumption Tax accrued on the sale of an imported or produced good is applied to the goods specified in the relevant law. Those who manufacture or import goods that are not subject to registration and registration, those who sell these goods through auction, and those who trade in motor vehicles that are subject to registration and registration are obliged to pay Special Consumption Tax. Those who manufacture, construct or import the goods in the lists (I), (III) and (IV) annexed to the Special Consumption Tax Law and the goods in the list (II) that are not subject to registration and registration, and those who sell these goods through auction, the goods in the list (II), For those subject to registration and registration; Those who trade in motor vehicles, import them for use or sell them through auction are also obliged to pay this tax.

Question 5. How is tax deduction applied in SCT?

Answer: If the goods subject to Special Consumption Tax are used in the production of another good on the list, the tax paid for the goods in question is deducted from the tax payable for the manufactured goods according to the principles determined by the Ministry of Finance.

Question 6. At what rates and/or amounts is SCT charged?

Answer: Special Consumption Tax is charged on the goods included in the lists annexed to the Special Consumption Tax Law in the amounts and/or rates specified. Accordingly, fixed tax amounts have been determined for the goods in list (I) in liter, kilogram and standard cubic meter units.