The European Commission will take the UK to the ECJ roughly two months before 29 March, the deadline for withdrawing from the EU, with UK prime minister Theresa May's Cabinet scrambling to ink a deal with Brussels before then.
But Mrs. May's Brexit treaty would force the UK to abide by ECJ rulings whilst as an EU member or during a 21-month transition period.
The UK "extended the scope of the measure considerably . . . meaning that it is no longer limited to trading in the commodities as originally covered," according to the Commission, adding that the UK amended the original exemption roughly eight times without advising the EU.
Britain objects to the Commission's accusations, stating that the challenge is a political move and that the UK abided by EU "standstill" rules allowing 0 percent VAT as the law was applied before a 1977 termination date.
Prime Minister May has been speaking to EU officials, including Commission president Jean-Claude Junker and European Council president Donald Tusk, on last-minute terms within the UK's Brexit agreement. But the vote was met with staunch opposition in Westminster, with MPs voting down the deal 432-202 on 15 January and political divides deepening across Commons. MPs set to cast another crucial vote on her draft plan in Commons next week.