TC09592 - [2025] UKFTT 00891 (TC)

The Appellant appealed against a demand for £13,596,151.25 made by HMRC on 23 March 2023. The demand was for excise duty and import VAT relating to imports of gutka made between March 2021 and December 2021.

Gutka is described in HMRC’s Excise Notice 476 as a “chewing mixture made from tobacco, nuts, spices, and so on”.

The Appellant appealed against the demand on 13 April 2023 on the grounds that the correct amounts of excise duty and import VAT had been declared and paid. The notice of appeal stated that gutka is different from other chewing tobacco products because only 2% of its net weight is made up of tobacco, with the other 98% of the ingredients being substances which do not attract excise duty.

The notice of appeal stated that the customs tariff code under which the tobacco product component of the goods was declared was “2403 9910 00 Chewing tobacco and snuff (nasal tobacco)”.

The grounds of appeal are as follows:

“It is plainly inappropriate to extend the excise duty regime to the entire weight of the Gutka whereby only a minority component is tobacco; to do so would make it commercially unviable to import into the United Kingdom and result in a situation whereby there is an unintended windfall arising based on the quantity, density and weight of substances other than tobacco which are not subject to excise duty.

“In light of the above, it is submitted that the Appellant has correctly declared and paid excise duty and VAT on the weight of the mixed goods which is tobacco product.”

On 27 December 2024, HMRC applied for the appeal to be struck out under Rule 8(3)(c) on the grounds that the Appellant’s case had no reasonable prospect of success.