AIR4170 | Alcoholic Ingredients Relief: Technical guidance: Is duty payable on spirits based flavours, essences etc received from other EC Member States?

No. Although the below is applicable to Northern Ireland only, the same principles also apply in GB.

It was originally agreed at EU Excise Committee that movements of essences under CN code 3302 intended for the manufacture of eligible articles (soft drinks and foodstuffs) would be exempt from duty. This aligned with other Member States’ practices, and removed what is perceived as a significant burden on the trade. It also, arguably, correctly implemented the exemption set out in the Structures Directive 92/83/EEC Article 27(1)(e).

In addition, the CN Code for essences intended to be used in the manufacture of alcoholic drinks (formerly 2208 10 00) has ceased to exist. Instead, the Committee has agreed to use CN code 3302 for essences used for both soft drink/food use and alcoholic drinks manufacture.

In considering the treatment of flavourings it should be borne in mind that the agreement to allow exemption for 3302 products stemmed from the example of soft drink syrups which can be transported in high strength alcohol for dilution into a soft drink at a later date. By the time such a product is diluted to a drinkable solution it will invariably have an alcohol content below 1.2% abv. Classification under 3302, and the exemption that follows, is not necessarily binding for excise duty purposes. If it appears that an exemption has been claimed for a flavouring that could be used for consumable alcohol of a strength exceeding 1.2% abv then contact the Alcohol Team, Ralli Quays for advice.