Tax authority additionally charged the subsurface resources user with the extraction of commercial minerals tax deficiency, penalties and fines (in total, more than 270 million rubles) because it has concluded that the subsoil user, together with affiliated persons, had artificially separated a single mineral extraction process. The tax authority considered that operations carried out with commercial mineral resources after its sale by a subsurface resources user to an affiliated person were not operations involving the processing of the mineral resource into another product, but were primary processing operations for the purpose of bringing the mineral resource to the requirements of marketable quality.

Such disputes are frequently resolved not in favor of the subsurface resources user: tax authority proves that the extracted commercial mineral for the purposes of commercial minerals extraction tax calculation is not the raw material originally extracted from the subsurface, but the product obtained as a result of additional technological operations with it.

 
In the present dispute it was proved that the operations carried out with the extracted mineral after its sale to an affiliated person are not included in the cycle of mining operations, and the mineral even before these operations meets the GOST requirements and standard, and after the execution of these operations there is a sort product, which has its own special properties.

As a result, the courts agreed with the position of the subsurface resources user and recognized the decision of the tax authority as invalid.