Prolab Nutrition Europe Limited v Commissioners for Her Majesty's Revenue and Customs
Decision date: 27 November 2009
Neutral citation: [2009] UKFTT 326 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
Prolab imported supplements from Sportika and paid separate invoices described as "export and trademark distribution rights." The Tribunal held those payments were a condition of sale and therefore formed part of the customs transaction value, upholding HMRC's post‑clearance demand of £77,211.94 and dismissing Prolab's appeal. The Tribunal also found the payments were for exclusive territorial distribution rights (not royalties or licence fees) and that the buyer was not free to source goods elsewhere for the relevant period.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
Payments that are required upon each purchase as part of the commercial arrangement qualify as "payments made as a condition of sale" and must be included in the transaction value under Article 29(3)(a). Exclusive territorial distribution rights that operate as no‑competition/distribution arrangements do not constitute "royalties and licence fees" within Article 32(1)(c).
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal indicated that Article 32(1)(c) largely overlaps with Article 29(3)(a) for payments that are conditions of sale and that separate invoicing does not prevent inclusion of a payment in the transaction value when it is commercially a condition of sale.