Ruling description

The Supreme Administrative Court in its ruling handed down on August 20, 2015 (case file number: I FSK 869/15) ruled that the consumption of electricity by the company and used in mineralogical processes will be subject to excise duty.

The currently binding provisions of the Excise Duty Act impose excise on electricity (PLN 20.00 per megawatt hour). The list of available excise duty exemptions does not include an excise duty exemption on electricity used in mineralogical processes. Pursuant to Article 2 Section 3 Letter b tiret 5 of the Energy Taxation Directive (2003/96/ EC), mineralogical processes are not encompassed by this directive.

In the discussed case, the NSA assessed the consistency of the Polish law with the EU regulations. The NSA based its ruling on the case C-349/13 decided by the Court of Justice of the European Union concerning legitimacy of imposing excise duty on lubricating oil. The Court ruled that the fact that a given product in not covered by the Energy Taxation Directive (2003/96/EC) or the Horizontal Directive (2008/118/EC) does not mean that a member state cannot impose excise duty on it. The NSA found that the heart of the problem in the discussed case is the same, hence Poland was entitled to impose excise duty on electricity consumed in mineralogical processes.


The NSA’s ruling is disadvantageous for entities purchasing and using electricity for industrial processes. It should be stressed, however, that the NSA’s thesis will soon lose its relevance since on January 1, 2016 new amended provisions on excise duty will come into effect broadening the scope of the excise duty exemptions.

The excise duty exemption will cover, among others, electricity used for the purposes of chemical reduction, in electrolytic processes, metallurgic processes and mineralogical processes. The amendment will thus allow reducing the costs of the excise duty paid by the industrial facilities which to that date have not been benefiting from any of the available exemptions. Application of the said exemptions will depend on the satisfaction of additional conditions. Please note that the aforementioned excise duty exemption currently functions, in a similar form, in relation to coal and gas products. When applying the new excise duty exemptions to electricity, it will be possible to refer to the already developed practice regarding the excise duty exemptions for coal and gas products used in mineralogical, electrolytic and metallurgic processes and for chemical reduction.

The basic purpose of the amendment is to equalize the competitive position of the Polish businesses and the businesses from other EU states. Hence, the amendments concerning the excise duty may have a positive influence on your business. In view of the fact that the amendment will come into effect in 2016, it is necessary to take preparatory actions to fully benefit from the solutions offered by the new Act.