According to the personal interpretation of the Director of the Tax Chamber in Katowice on 29 July 2016 The signature. IBPP4/4513-151/16/PK electricity consumption in cement production may be exempted from excise duty. However, this applies only to processes in which minerals are transformed into a specific product.
The individual interpretation of the Director of the Tax Chamber in Katowice concerns the actual situation in which the Company producing construction materials has a licence to trade electricity in accordance with the provisions of energy law. The Company intends to start using the exemption provided for electricity consumed in mineralogic processes according to Article 30(7a)(4) Excise duty laws (Journal of Laws of 2009, item 11)
Based on Article 9(1) Excise tax laws in the case of electricity are taxed on excise duty not only for the sale of electricity to the final buyer but also for example for the consumption of electricity by the concession holder for the trading of electricity.
The Director of the Tax Chamber in Katowice pointed out that the exemption from excise duty on electricity consumed in mineralogic processes does not automatically apply to the entire production process.
It is necessary to distinguish between the different stages and the possibility of exempting from excise duties electricity consumption is considered separately for each stage.
However, the interpretation in question concerns the cement-producing taxpayer, and allows for much broader conclusions on the production of other materials used in industry or construction.
„(...) the fact that the applicant is a cement manufacturer, i.e. it obtains the finished product as a result of a mineralogic process, does not mean that each stage of its production should be subject to the above mentioned exemption even if it is indirectly related to the mineralogic process (...) the mineralological process must be defined as a process in which the physicochemical transformation of minerals (chemical compounds resulting from geological processes) takes place into a specific product. As a consequence, only the electricity consumed in this process is exempted."
The quoted passage of interpretation indicates that excise duty exemption may apply to electricity consumed in a process closely related to the physicochemical transformation of minerals, however, it cannot be applied to activities such as gravel milling. The design of this provision may mean that some entrepreneurs need to consult not only tax advisers but also geology specialists.