In December 2023, the company imported into Russia a Robinson R44 Raven II — one of the world's most widely used light civil helicopters, a staple of commercial aviation, aerial surveying and private transport. At customs clearance, the company claimed the VAT exemption provided under Sub-clause 20, Article 150 of the Russian Tax Code, which exempts the importation of civil aircraft subject to state registration in Russia from VAT.
The exemption mechanism works as follows: if the aircraft registration certificate has not yet been issued at the time of customs clearance, the declarant may submit a written undertaking to provide it within 90 calendar days of the customs declaration date. LLC Titan did exactly that.
The Absurdity of the Situation
What followed is a story that starkly illustrates the gap between the letter of the law and common sense.
The company applied to Rosaviatsiya — Russia's Federal Air Transport Agency — to register the helicopter in the State Register of Civil Aircraft. Rosaviatsiya refused twice, in February and March 2024. The grounds for refusal were administrative rather than substantive: the regulator demanded additional documents, including proof of the helicopter's removal from a foreign register and evidence that a special presidential decree governing transactions with foreign persons (Presidential Decree No. 81 of 01.03.2022) had been complied with.
The company filed a petition with the customs authority for an extension of the 90-day deadline — well in advance of its expiry. The customs authority declined, citing the absence of any statutory basis for such an extension.
The dispute with Rosaviatsiya was eventually resolved in May 2024, and in June of the same year the helicopter was finally registered — Certificate No. 10191 was issued on 11 June 2024. The aircraft remains on the register to this day. But by then the 90 days had already elapsed. On that basis, the customs authority conducted an audit and assessed additional VAT of RUB 12,518,794.19 — approximately USD 140,000.
The court of first instance sided with the customs authority, confining itself to a finding that the deadline had been missed.
Arguments Presented in the Appeal
At today's hearing, lawyer Yury Morozov put forward the following submissions.
First, the court of first instance conflated a procedural tool — the 90-day deadline — with the substantive condition of the exemption, namely the fact of registration. Sub-clause 20, Article 150 of the Tax Code exempts the import of aircraft that are registered or subject to registration. The helicopter is registered. The substantive condition is met. The Supreme Court of the Russian Federation in its ruling of 07.03.2018 No. 308-КГ17-13459 explicitly held that the mere failure to comply with a customs procedure requirement does not automatically preclude an exemption from customs payments where the substantive grounds for the exemption remain intact.
Second, paragraph 11, sub-clause (d) of Procedure No. 289 (Decision of the EEC Board of 10.12.2013) expressly permits amendments to a customs declaration after the release of goods — including for the purpose of claiming an exemption upon subsequent submission of supporting documents. This is the mechanism on which the company's application to amend the declaration was based. The court of first instance did not examine this regulatory basis. The Arbitration Court of the North-Western District in its ruling of 19.06.2024 in case No. А56-95776/2022 confirmed the legitimacy of this approach.
Third, the court placed the consequences of another state authority's conduct squarely on the company. The registration timeline is governed by an administrative procedure that the applicant cannot control. Yet the company acted in good faith: it notified the customs authority of the registration process before the 90-day period expired and formally requested an extension.
Fourth, the court offered no analysis of the company's objections to the calculation of interest (penalties), which had been accrued from 30 December 2023 — effectively from the first day after customs release. Sub-clause 20, Article 150 of the Tax Code establishes that the VAT payment obligation arises no earlier than the day following the expiry of the 90-day period, meaning penalties cannot accrue before 28 March 2024.
Finally, a systemic argument was raised: upon any subsequent sale of the helicopter, the company is required to apply a zero VAT rate (Sub-clause 15, Paragraph 1, Article 164 of the Tax Code), which means it will be unable to deduct the import VAT paid at customs. The entire sum will remain irrecoverably in the state budget — a result that violates the fundamental principle of VAT neutrality as an indirect tax.
The case exposes a systemic problem: a declarant that acts in good faith and complies with every formal requirement becomes hostage to the administrative timetable of a state regulator it cannot influence. If the appellate court upholds the formalistic approach of the first instance, it will set a troubling precedent for the entire civil aviation sector: importing aircraft into Russia will become a tax lottery where the right to an exemption depends not on meeting its substantive conditions, but on the speed of Rosaviatsiya's processing.
The Court's decision
The Fifteenth Arbitration Court of Appeal agreed with the submissions of lawyer Yury Morozov and granted the appeal in full. The court reversed the decision of the Arbitration Court of the Krasnodar Region dated 16 January 2026, recognised the Novorossiysk Customs authority's decision to assess additional VAT as unlawful, and ordered the customs authority to refund LLC Titan the sum of RUB 12,518,794.19. The ruling represents a significant development in Russian judicial practice on VAT exemptions for imported civil aircraft. For the first time in this category of disputes, an appellate court has affirmed that the substantive condition of the exemption — the fact of aircraft registration — must take precedence over a formal procedural deadline, particularly where the delay was caused by the conduct of another state authority beyond the declarant's control. The decision establishes an important precedent: a company that acts in good faith, notifies the customs authority of the registration process in advance, and ultimately obtains the registration certificate retains the right to the VAT exemption — regardless of whether the 90-day window was formally observed. For the civil aviation sector, this outcome is more than a win in a single case. It signals that Russian courts are willing to look beyond procedural formalism and assess the real economic substance of tax exemptions designed to support the development of domestic civil aviation.