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HMRC internal manual


Valuation for import VAT: exceptions to the normal rules: permanent imports: repayment of VAT on goods rejected by the importer

Article 238 of Regulation (EEC) No 2913/92 (as of 1 May 16, this is replaced by Article 116 of EU Regulation 952/2013) provides a potential for customs duty to be repaid on goods which were refused by the importer because they:

  • did not comply with the terms of the contract under which they were imported
  • were defective, or
  • have been damaged in transit prior to customs clearance.

Section 16.1 of the VAT Act 1994 also applies these provisions to repayment of import VAT.

Full details of the procedure to be followed are given in R3-21 Rejected imports. This arrangement will generally be of no interest to registered taxable persons, who can recover the tax through the normal deduction system, see IMPS03340.