A fuel distribution company has lost its challenge against a tax bill of over €1.3 million from Revenue over its failure to keep proper records of sales of large volumes of marked diesel to a customer suspected of involvement in fuel laundering.

The Tax Appeals Commission has ruled that the unnamed company is liable to pay a demand for €1,350,507 following an extended Revenue audit into its affairs between April 1, 2012, and December 31, 2014.

The sum was based on the difference between the excise duty charged at the standard rate and discount rate for agricultural diesel.

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Records

A hearing of the TAC was informed that the company kept no records of the address of a customer or his vehicle registration number to whom it had sold over 3.7 million litres of low sulphur gas oil – otherwise known as “green diesel” – over a two-year period up to March 31, 2013.

LSGO is a marked fuel which means it is illegal if used as a fuel for road vehicles.

The TAC heard that this customer purchased approximately 36,000 litres of the fuel each week for which he would pay €30,000 in cash.

The company director said he did not believe these transactions were unusual as the firm was lodging €150,000 in cash sales each week on average.

Revenue claimed the company facilitated the LSGO being used for fuel laundering by failing to comply with Mineral Oil Tax Regulations which required it to keep the name and vehicle registration number of its customers.

As a consequence, the true identity of the customer suspected of fuel laundering remained concealed from Revenue.

The TAC heard that during an audit in 2013 Revenue officials were dissatisfied with sales to one individual customer as they did not believe such a customer existed.