Dunnes Stores fights €36m tax bill for bags levy
Firm claims green regulation 'invalid'
THE humble plastic shopping bag took centre stage at the High Court yesterday as supermarket giant Dunnes Stores launched a legal challenge against a €36.4m tax demand for their use.
The company is contesting the regulations imposing the plastic bag levy after the Revenue Commissioners served it with tax assessments in November 2009 -- covering the period from 2004 to 2008 -- over charges arising from the levy, which they say are uncollected and due.
The levy -- which was introduced in March 2002 at the rate of 15 cent per bag and was then increased to 22 cent in 2007 -- was brought in to reduce the number of plastic bags used by shoppers.
The Dunnes action against the Revenue, the Minister for the Environment, Ireland and the Attorney General is brought on several grounds, including an assertion that the definition of a plastic bag in the 2001 regulations was "so uncertain" as to render the regulations invalid.
The defendants deny the Dunnes' claims.
The supermarket chain claims that the levy relates to larger bags given to customers at point of sale to hold their shopping but that the tax assessments wrongly included other bags that are used for wrapping fruit, vegetables or other items for hygiene purposes.
It further claims that the regulations are invalid because they fail to specify the class or classes of supermarket, service station or other sales outlet where the levy is chargeable, leviable and payable. Instead, it applies to all such outlets.
The regulations, Dunnes also alleges, are invalid because they are not for the recovery of "waste" as defined by the Waste Management Act.
The company claims that a plastic bag provided to a customer of a supermarket, service station or other sales outlet does not constitute waste and does not become waste until the holder discards it or forms an intention to discard it.
Dunnes is seeking orders quashing assessments related to the accounting periods of July 2004 to June 2005; July 2005 to June 2006; July 2006 to June 2007 and July 2007 to June 2008, all made under the Waste Management (Environmental Levy Plastic Bag) Regulations of 2001. It is also seeking a court ruling that the 2001 regulations implementing the plastic bag levy are invalid and have no legal effect.
The firm is also claiming that the defendants are acting in breach of natural justice and fair procedure by allegedly refusing to provide Dunnes with details or providing insufficient details of the basis of the assessment.
Opening the case yesterday for Dunnes, senior counsel Paul Sreenan told Mr Justice John Hedigan the supermarket chain remained a supporter of the levy but disputed the €36.4m assessment.
The case continues.