Opinion of Mr advocate general Reischl

Mr President,

Members of the Court,

Just as in Joined Cases 181/78 and 229/78 on which I have recently given my opinion, the main proceedings giving rise to this case are concerned with the compatibility of the Netherlands Law of 1968 on turnover tax (Wet op de Omzetbelasting of 28 June 1968, Staatsblad 329) with the Second Council Directive of 11 April 1967 (67/288/ EEC) on the harmonization of legislation of Member States concerning turnover taxes — Structure and procedures for application of the common system of value added tax (Official Journal, English Special Edition 1967, P. 16).

The following are the facts of the case:

The limited company Nederlandse Spoorwegen, the appellant in the main action, is an undertaking within the meaning of the Netherlands Law of 1968 on turnover tax engaged in the transport of passengers and goods.

Its subsidiary, the limited companv Van Gend & Loos, with which the appellant is treated as a single entity for tax purposes within the meaning of the Netherlands tax law, engages inter alia in cash-on-delivery transactions for which besides the cost of delivery a special payment is agreed for the collection of the sale price of the goods before their delivery to the consignee. Van Gend & Loos charged this so-called cash-on-delivery commission, plus value added tax, to its principals' account and included the tax in its own tax declaration. The appellant did not make a return of these collections as services within the meaning of Article 11 of the Netherlands Law on turnover tax and claimed deduction of input tax under Article 15 (1) of that law.

The Netherlands tax authorities levied this input tax which had been deducted amounting to Hfl 467076 in respect of the period from 1970 to 1974 inclusive on the ground that the collection of the sale price was a service which was separate from the carriage of the goods. Accordingly it is a service within the meaning of Article 11 (j) of the Netherlands Law of 1968 on turnover tax, which exempts the granting of credit; the transfer, collection and payment of financial obligations including bank transfers, cheques and current account transactions from turnover tax.

The appellant challenged this assessment before the Tariefcommissie and claimed that the collection of cash on delivery was a service ancillary to the carriage of goods within the meaning of the Second Council Directive on the harmonization of turnover taxes and therefore had to be taxed in the Netherlands. In support it relied on Article 6 (2) of that directive which reads:

and in this connexion Annex B, item 5, lists the following services:

Further, the appellant referred to Point 10 Regarding Article 6 (2) of Annex A to the directive which provides:

The Tariefcommissie rejected the appeal inter alia on the ground that the power given to the Member States in Point 10 of Annex A excluded reliance on Article 6 (2) of the directive and that therefore Article 11 (j) of the Netherlands Law on turnover tax could not infringe that directive. The question whether collection of the sale price could be regarded as an ancillary service within the meaning of Annex B, item 5, to the Second Directive was therefore left open. Further, the Tariefcommissie observed that in any event there could be no reliance on the Second Directive in respect of the period prior to 1 January 1972 because the directive entered into force only on that date.

The appellant in the main action appealed against that decision of the Tariefcommissie to the Hoge Raad of the Netherlands. In support it alleged that the Tariefcommissie had wrongly held that the directive was not directly applicable. The words as far as possible used in Point 10 Regarding Article 6 (2) of Annex A to the Second Directive did not mean that the Member States have a discretion to exempt the transport and storage of goods and ancillary services or pan thereof from turnover tax. If it is assumed that the collection of the sale price is a service ancillary to the carriage of goods within the meaning of the directive, then although Article 10 (3) of the Second Directive, which allows every Member State, subject to the consultations provided for in Article 16, to determine such other exemptions as it considers necessary, offers the possibility of exempting the collection of that price from turnover tax, the Netherlands have neither put forward valid grounds nor engaged in the requisite consultations. Moreover, the Tariefcommissie wrongly assumed that the Second Directive could not be relied on in respect of the period before 1 January 1972.

By judgment dated 24 May 1978 the Hoge Raad stayed the proceedings and referred the following questions to the Court for a preliminary ruling under Article 177 of the EEC Treaty:

My opinion on these questions is as follows:

1. The Hoge Raad asks in the first question whether the collection of the price of goods by the carrier before their delivery to the consignee is a service ancillary to the transport and storage of goods within the meaning of Annex B, item 5, to the Second Council Directive.

2. The national court asks in the second question whether, assuming that collection of the price is a service ancillary to the carriage of goods, the collection alone and not the carriage or storage of goods can be exempted from taxation by a national law.

3. The third question, on the requirement of consultation under Article 16 of the Second Directive and the consequences of insufficient consultation on the application of national law, can again be dealt with only in the alternative, since it is asked only in the event of the second question being answered in the affirmative. The content of the third question is basically the same as Questions 3 and 4 which the Hoge Raad asked in Joined Cases 181/78 and 229/78; the arguments of the parties are likewise the same. In this respect I can therefore refer to my opinion in the said cases. In the present case it is apparent especially from the letter to the Commission of 16 July 1968 from the Permanent Representative of the Kingdom of the Netherlands to the European Communities that there was no consultation in respect of the provision in question of Article 11 (j) of the Netherlands Law on turnover tax. That letter, communicating to the Commission the Law on turnover tax which had already appeared in the official gazette of the Netherlands, expressly lists the articles of the Netherlands law which the Netherlands Government considers require consultation. Article 11 (j) is, however, not contained in that list.

4. With the fourth question the national court seeks to ascertain whether a party before the national courts may rely directly on Article 6 (2) in conjunction with Annex B, item 5, to the Second Council Directive. This question is asked only in the event of the collection of the price being treated as a service ancillary to the carriage within the meaning of Annex B, item 5, to the Second Council Directive and of the Member States not having a discretion under that directive of exemption from turnover tax only the ancillary service of collecting the price and not the transport and storage of the goods. Since I have come to the latter conclusion in answering the second question, if only in the alternative, it seems proper to make some brief remarks on this question.

I accordingly propose that the question should be answered as follows:

The collection of the price of goods is not a service ancillary to the transport within the meaning of item 5 of Annex B to the Second Council Directive of 11 April 1967 on the harmonization of legislation of Member States concerning turnover taxes — Structure and procedures for application of the common system of value added tax (No 67 /228/EEC).

1 Translued from the German.