A legal bid to allow online shoppers to buy cut-price cigarettes and alcohol from anywhere in Europe has been thrown out.
Currently, if customers buy quantities privately for personal use and transport them back to the UK themselves, they pay the tax rate of the country of purchase.
The European Court of Justice had been asked to decide whether this regime applied to goods bought for personal use over the Internet and via mail order.
But today the judges ruled that anyone buying cigarettes and alcohol over the Internet would still have to pay UK taxes.
They said that ‘only products acquired and transported personally by private individuals are exempt from excise duty in the member state of importation’.
The decision is a blow to consumers hoping for a pre-Christmas bonanza.
But it is good news for Chancellor Gordon Brown, who had been facing a multi-billion-pound-a-year hole in revenue from domestic excise duty if the decision had gone the other way.
The Treasury already loses an estimated £1 billion a year to the ‘booze cruisers’ who cross the Channel to bring back cheap-rate alcohol and cigarettes from France.
The losses would have increased dramatically if the ruling had opened up the booze-cruise market to online shoppers.
Small traders in the UK are also relieved. They feared a big loss of business as customers switched to on-line EU drinks and cigarette suppliers.
Ken Patel, national spokesman for Retailers Against Smuggling, and a Leicester retailer, said: ‘If the proposals had gone ahead, the livelihoods of many of our corner shopkeepers would have been seriously threatened.
‘It would have been inevitable that shoppers would have been tempted to buy tobacco from outside the UK because the high levels of tax here would make it much cheaper for them to do it that way.’