Boots Company plc v Commissioners of Customs and Excise.
Date: 1990-03-27
13 From the economic point of view, since the obligation assumed by Boots forms part of a promotion scheme the cost of which is borne by Boots itself, it affords Boots no advantage other than the prospect of increasing its turnover by increasing the volume of its sales of premium goods and redemption goods . It is only where the coupon surrendered to Boots is then recovered by its supplier, when the latter bears all or part of the promotion costs, that the coupon has monetary value for Boots equal to the amount actually paid by the supplier to Boots pursuant to their own contract . In the case in question, the coupon represents for Boots only an obligation to grant a reduction, which is allowed with the aim of attracting the customer .
15 According to Article 11 A 1(a ) of the Sixth Directive, the taxable amount within the territory of the country is to be, in respect of supplies of goods, everything which constitutes the consideration which has been or is to be obtained by the supplier from the purchaser . Paragraphs 2 and 3 of Article 11 A enumerate certain items which are to be included in the taxable amount and other items which are not to be included . Paragraph 3(b ) of Article 11 A provides that the taxable amount is not to include "price discounts and rebates allowed to the customer and accounted for at the time of the supply ". Thus, the items referred to in paragraph 2 of Article 11 A are treated by the directive itself as constituting the "consideration" and therefore the taxable amount and the items referred to in paragraph 3 are excluded, likewise ex lege, from that concept of consideration .
16 It follows that each time the question of classifying a specific item arises, it is first necessary to examine whether the item falls within one of the categories referred to in paragraphs 2 and 3 and it is only when the answer to that question is in the negative that reference must be made to the general concept in paragraph 1(a ).
18 "Discounts and rebates" which, according to Article 11 A 3(b ) of the Sixth Directive, are not to be included in the taxable amount, constitute a reduction of the price at which an article is lawfully offered to the customer, since the seller agrees to forego the sum represented by the rebate in order precisely to induce the customer to buy the article .
19 That provision is merely an application of the rule laid down in Article 11 A 1(a ) of the Sixth Directive, as interpreted by the Court in its decisions ( for the most recent, see the judgment of 23 November 1988 in Case 230/87 Naturally Yours Cosmetics Limited v Commissioners of Customs and Excise (( 1988 )) ECR 6365 ), according to which the taxable amount is the consideration actually received .
21 That viewpoint cannot be accepted . It is clear from the coupon' s legal and economic characteristics described above that, although a "nominal value" is indicated on it, the coupon is not obtained by the purchaser for consideration and is nothing other than a document incorporating the obligation assumed by Boots to allow to the bearer of the coupon, in exchange for it, a reduction at the time of purchase of redemption goods . Therefore, the "nominal value" expresses only the amount of the reduction promised .
22 The answer to the third question must therefore be that Article 11 A 3(b ) of the Sixth Directive must be interpreted as meaning that the expression "price discount and rebates allowed to the customer and accounted for at the time of the supply" covers the difference between the normal retail selling price of the goods supplied and the sum of money actually received by the retailer for those goods where the retailer accepts from the customer a coupon which he gave to the customer upon a previous purchase made at the normal retail selling price .
The other questions