State rejects claims in Dunnes bag row

THE state has rejected claims by Dunnes Stores that a €36.4 million tax assessment imposed on the supermarket chain arising out of the levy for plastic shopping bags is invalid.

In proceedings before Mr Justice John Hedigan, Dunnes Stores is disputing the Revenue Commissioners’ tax assessments over a four-year period to November 2008 on grounds including the definition of plastic bag in the 2001 regulations is “so uncertain” as to render the regulations invalid.

The case arose after Dunnes received four assessments totalling €36.4m from Revenue in late 2009 who claimed the levies due had not been collected.

The company did not accept these assessments and contends the plastic bags, in relation to which those assessments were made, were not subject to the levy.

In its action against the Revenue, the Minister for the Environment and Local Government, Ireland and the Attorney General, Dunnes claims the levy relates to larger bags given to customers at point of sale for their shopping but the assessments wrongly included other bags used for wrapping for fruit and vegetables or hygiene purposes.

The state rejected all of Dunnes claims.

Paul Sreenan, counsel for Dunnes, said the assessment of €36.4m, worked out at just over €9m per year for the bags. During the period, he said the levy collected for plastic bags dispensed at the point of sale by Dunnes was €3m-€4m per year.

The case continues.