Stores for use in ships, aircraft or hovercraft: The law on ships and aircraft stores
The EC legislation which enables UK traders to zero-rate supplies for use as stores in ships, aircraft and hovercraft on international journeys is Council Directive 2006/112/ECArticle 148(a) (b) and (e). Article 150 is also relevant.
(a) the supply of goods for the fuelling and provisioning of vessels used for navigation on the high seas and carrying passengers for reward or used for the purpose of commercial, industrial or fishing activities, or for rescue or assistance at sea, or for inshore fishing, with the exception, in the case of vessels used for inshore fishing, of ships’ provisions;
(b) the supply of goods for the fuelling and provisioning of fighting ships, falling within the combined nomenclature (CN) code 8906 10 00, leaving their territory and bound for ports or anchorages outside the Member State concerned.
(e) the supply of goods for the fuelling and provisioning of aircraft used by airlines operating for reward chiefly on international routes
The Commission shall, where appropriate, as soon as possible, present to the Council proposals to delimit the scope of the exemptions provided for in Article 148 and to lay down the detailed rules for their implementation.
Pending the entry into force of the provisions referred to in paragraph 1, Member States may limit the scope of the exemptions provided for in points (a) and (b) of Article 148.
The UK legislation which sanctions the zero-rating of these supplies is sections 30(6) and 30(7) of the Value Added Tax Act 1994
30(6) A supply of goods is zero-rated by virtue of this subsection if the Commissioners are satisfied that the person supplying the goods-
(a) has exported them to a place outside the member States; or
(b) has shipped them for use as stores on a voyage or flight to an eventual destination outside the United Kingdom, or as merchandise for sale by retail to persons carried on such a voyage or flight in a ship or aircraft,
and in either case if such other conditions, if any, as may be specified in regulations or the Commissioners may impose are fulfilled.
30(7) Subsection (6)(b) above shall not apply in the case of goods shipped for use as stores on a voyage or flight to be made by the person to whom the goods were supplied and to be made for a purpose which is private.