The Arbitration Court of the Perm Territory is considering a lawsuit filed by the Yugovsky Dairy Plant, challenging the additional tax assessment in connection with the unlawful use of the preferential VAT rate. In parallel, the plant is under investigation of a criminal case on concealment of funds from the tax authorities. Without waiting for a court decision, the manufacturer makes loud conclusions about the illegality of the actions of the Federal Tax Service in the Perm Territory. So who’s pushing who?
Yugovskoy Dairy Products Plant LLC is the largest milk producer, in fact, a monopolist in the Kama region. At least for this reason, the manufacturer’s dispute with the tax authorities should have attracted the attention of not only relevant departments, but also the public. Moreover, we are talking about a rather large amount – more than a billion rubles.
The essence of the dispute is that the Interdistrict Inspectorate of the Federal Tax Service No. 19 for the Perm Territory, based on the materials of inspections of Yugovskoy Dairy Plant LLC for 2017-2019 and the second quarter of 2020, came to the conclusion that the rennet produced by this enterprise “Derevensky” and “Soft product” Caucasian “are not full-fledged dairy products due to the use of milk fat substitutes in them. This means that they should not be subject to the preferential VAT rate of 10%. Based on this, the tax authority issued decisions on additional taxes in the amount of 86.6 million rubles plus penalties for the second quarter of 2020, as well as 633.6 million rubles plus penalties for 2017-2019. The total amount of additional charges exceeded 1.1 billion rubles.
The manufacturer categorically disagreed with this and went to court. The Arbitration Court for the Perm Territory initiated proceedings in case A50-23583 / 2022, in which the defendants are the Federal Tax Service of Russia for the Perm Territory and the Interdistrict Inspectorate of the Federal Tax Service No. 19. with the use of milk, therefore, is inherently dairy and is subject to a preferential VAT rate of 10%.
The regional Rosselkhoznadzor has already become interested in this dispute about what is considered a dairy product, joining the proceedings as a third party. In particular, at a meeting held on March 28, a representative of the department referred to the current technical regulations of the Customs Union, according to which the share of vegetable substitutes in dairy products cannot exceed 50%. Therefore, the SCMP rennet product, in which 100% milk fat replacer is used, is not dairy. Judging by the intensity of the dispute, at the next court session, which is to be held on April 18, experts will be involved in resolving this issue, and perhaps the court will come to the conclusion that it is necessary to appoint an examination of the disputed products.
Rosselkhoznadzor believes that the court decision in this case could become a precedent for the entire dairy industry. The Ministry of Agrarian Industry and the Prosecutor’s Office of the Perm Territory are also involved in the case. In addition, as an interim measure, the court ruled to suspend the decision of the Interdistrict Inspectorate of the Federal Tax Service No. 19 for the Perm Territory on holding liable for a tax offense until the relevant judicial act in this case comes into force (the court ruling is at the disposal of the editors).
Scandalous PR is also PR
I wonder who, except for the inhabitants of the Perm Territory, would know about this regional dairy monopoly, if not for the scandal, apparently fanned by him? In early March, it became known that, by decision of the Federal Tax Service, a criminal case had been initiated against officials of YuKMP LLC, within the framework of which employees of the regional Investigative Committee conducted searches at the enterprise and at the suspects. The standard course of investigative actions, but the general director of the SKMP Sergey Khazov took this event as pressure on business. And, without waiting for a court decision, he began to complain, and not to local supervisory authorities, but immediately to the very top: Russian President Vladimir Putin, Russian Prime Minister Mikhail Mishustin and Chairman of the Russian Investigative Committee Alexander Bastrykin.
“By the very fact of filing an application to initiate a criminal case, the tax authority is trying to put pressure on the enterprise in order for Yugovsk Dairy Plant LLC to waive its legal right to judicial protection and defend its interests in court,” one of the letters reads. written by Khazov.
The same letter mentions 18 manufacturers from different regions of the country producing similar products. And the general director of the SKMP wonders why the tax authorities have no claims against them. In addition, as we see, Mr. Khazov unobtrusively warns that the actions of the tax authorities, trying to recover the arrears, may lead to an increase in prices for the products of the SCMP and, as a result, cause social tension in society.
That is, instead of defending, as provided by law, their interests in court, the leadership of the SKMP (and this position is unlikely to be agreed with the owner of the enterprise Sergey Pozdeev) began to hide behind the inhabitants of the region? Or does Sergei Khazov believe that the Federal Tax Service should report to him on his actions regarding his fellow competitors in the dairy shop? Well, well, at least for the time being there is no talk of the imminent bankruptcy of the enterprise after paying the arrears.
By the way
According to the rusprofile.ru resource, SKMP’s revenue for 2021 amounted to 16 billion rubles, net profit – 2.2 billion rubles. The enterprise is one of the largest in our country and is one of the fastest growing – this was largely facilitated by the purchase in 2021 of the production site of a former brewery in Perm and the launch of new lines there. In the Perm Territory, SKMP is a virtual monopolist.
On the other hand, more than a billion is a rather serious amount. It is clear that the UKMP will try its best, if not to cancel the decision of the Federal Tax Service, then at least to reduce the amount of the payment. And here a reasonable question arises: who puts pressure on whom in this situation? Tax, regulatory and supervisory authorities put pressure on business, as the leadership of the dairy plant claims? Or vice versa – the leadership of the SKMP is trying to put pressure on the tax and investigative authorities and even the court with their appeals “over the head”?
To all of the above, it should be added that the tax authorities act in the interests of the state. And the state now, whatever one may say, is in a situation where increasing tax collection is an urgent need. This is evidenced by the negotiations between the Russian government and big business on a one-time voluntary contribution to the budget.
Social programs are consistently expanding in the country. Running a special military operation also costs money. How will the Yugovsky Combine dispose of this “hidden” billion? Maybe let these funds be used to improve the standard of living of Russian pensioners? It is very strange in the current conditions to observe the consumer attitude of business towards the state, especially enterprises that receive gigantic profits in our country.
The vicissitudes of the production of rennet products and the aspects of applying preferential tax rates to them should be dealt with by the arbitration court. And the investigation, in turn, will decide whether there were any tax frauds on the part of the SKMP. We will continue to follow the fate of the “Prikamsky billion”.