Article 105 of the Restriction of Special Taxation Act

2. The plaintiff's remaining claims are dismissed.

3. 1/10 of the costs of lawsuit shall be borne by the plaintiff, and the remainder by the defendant.

A. On March 23, 2006, the Plaintiff established the Livestock Industry Organization’s manufacture and sales business, livestock pens, and agricultural warehouse construction business, etc. as its business objective, and closed down business on September 15, 2011.

B. From January 2006 to February 2009, the Plaintiff supplied livestock raisers with total amount of KRW 000, total amount of equipment for livestock production, and total of KRW 000,000, total amount of installation work for livestock pens, and with respect to electronics, tax invoices for zero-rate tax are applied, and with respect to the latter, tax invoices for global tax rates are issued 1), and with the same content as the Defendant.

C. On December 1, 2010, the Defendant rendered a disposition to impose value-added tax on the grounds that the Plaintiff’s livestock machinery and materials supplied to livestock raisers, etc. do not fall under the category of livestock machinery and materials for livestock industry under Article 105 subparag. 5 (d) of the former Tax Special Cases Restriction Act (wholly amended by Act No. 11133, Dec. 31, 201) but does not fall under the category of machinery and materials for livestock industry under Article 105 subparag. 5 (d) of the former Tax Special Cases Restriction Act (wholly amended by Act No. 111133, Dec. 31, 201) and excludes the application of zero tax rate for the period of January 2, 2006, including the partial omission of sales, and 00 won for the second period of February 200, 2007, and 200 won for the second period of February 2009, respectively (hereinafter referred to as “each disposition”).

D. Accordingly, the Plaintiff filed a request with the Tax Tribunal on March 3, 2011, and the Tax Tribunal rendered a decision on April 8, 2012 that the construction part of the livestock pens construction work supplied by the Plaintiff should rectify the relevant tax base and tax amount by applying zero-rate tax rate and that the remainder of the claims are dismissed.

E. According to the purport of the decision of the Tax Tribunal on July 30, 2012, the Defendant corrected the amount of value-added tax to KRW 000 for the second term of 2007, KRW 000 for the first term of 2008, and KRW 000 for the second term of 2008 (hereinafter “instant disposition”).

[Grounds for Recognition] The entire arguments, as described in the facts without dispute, Gap 1, 2, 3, Eul 2, 4, 6, and 7, and family card (including each number), and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The parties' assertion

1) The plaintiff's assertion

The plaintiff supplied livestock raisers with goods, such as fish strings, and automatic water supply systems, and the defendant's disposition of this case based on the premise that the livestock industry falls under the zero-rate tax rate and is not subject to zero-rate tax rate, since it constitutes livestock industry machinery that can supplement the shortage of livestock human resources as prescribed in Article 105 (1) 5 (d) of the Act on Special Cases concerning Taxation Restriction, and contribute to improving the productivity of the livestock industry.

2) The defendant's assertion

As a livestock shed construction business operator, the Plaintiff entered into a contract with the supply and installation works of livestock machinery and materials for livestock industry, such as the livestock shed construction, the livestock field, and the automatic water supply machine, and the supply of livestock machinery and materials for livestock industry falls under the supply of goods essential for livestock construction services, which are the main transaction of the Plaintiff, and thereby includes supply of construction machinery and materials for livestock industry, which is a main transaction pursuant to Article 1(4) of the Value-Added Tax Act and Article 3 of the Enforcement Decree of the same Act. Therefore, the Defendant’s disposition that did not apply zero tax rate to livestock machinery

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

1) From March 2006 to December 2009, the Plaintiff supplied stuffed livestock farmers, GaB, and DoD, as shown in the attached list, with the input tax rate applicable in Article 3(4) [Attachment 2] of the Act on Special Cases Concerning the Application of zero-rate Tax and Tax Exemption, etc. (hereinafter “Special Provisions”), and supplied livestock straw, automatic water supply machine, dubs, livestock excreta removal machine, and excreta storage tank, as well as newly constructed livestock products.

2) The Plaintiff: (a) entered into a construction contract with ParkB, etc. for the supply of livestock machinery and equipment and new construction of livestock pens; (b) made most of the construction contracts; (c) made the construction amount under the contract clearly divided into sales proceeds of livestock machinery and equipment and the construction cost for livestock pens; and (d) issued a tax invoice for zero tax rate application and a tax invoice for general tax rate application; and (c) filed a value-added tax return with the Defendant with the same content.

3) The ratio of sales proceeds of livestock machinery and equipment to sales proceeds under each construction contract entered into by the Plaintiff with ParkB, etc. (the construction cost or actual payment amount 2) was higher than the new construction cost of livestock pens, as seen below, in most cases.

4) On the other hand, E (F farm) supplied livestock machinery and equipment and livestock construction services from the Plaintiff applied for subsidies to ste (F farm) from ste (F farm), and to ste (F farm) applied for subsidies to stecul ste ste ste ste ste ste ste ste ste, and to ste ste ste ste ste ste ste ste and livestock ste ste ste ste ste ste ste ste and livestock ste ste ste stes

[Reasons for Recognition] The facts without dispute, Gap evidence 9, Gap evidence 10 to 42, Gap evidence 12-1 to 5, Eul evidence 3-1 to 10, and the purport of the whole pleadings

D. Determination

1) Article 105(1)5(d) of the former Restriction of Special Taxation Act provides that the zero-rate tax shall apply to livestock machinery and materials for livestock industry that may contribute to improving the productivity of livestock industry by supplementing the shortage of livestock human resources, and that are prescribed by Presidential Decree, and Article 3(4) of the Special Provisions provides that "in case of separate Table 2," livestock grade, automatic water supply, doubles, livestock excreta removal, and livestock excreta storage tank" shall be applied to livestock machinery and materials for livestock industry where zero-rate tax is applied. Meanwhile, Article 1(4) of the Value-Added Tax Act provides that the supply of goods or services that are essential to supply services, which are the main transaction, shall be deemed to be included in supply of services, and Article 3(2) of the Enforcement Decree of the same Act provides that goods deemed to be supplied as incidental to supply of services, which are the main transaction practice, shall be one of the goods included in the supply of main services under Article 1(4)

2) 살피건대，위 인정사실에 의하여 알 수 있는 다음과 같은 사정 즉，① 원고가 박BB 등에게 공급하고 영세율 적용 세금계산서를 발행한 자동급수기，양돈케이지 등은 축산 인력의 부족을 보완하고 축산업의 생산성 향상에 기여할 수 있는 축산용 기자재임이 분명하고，특례규정 제3조 제4항 [별표 2]에서 영세율이 적용되는 축산용 기자재로 명확하게 규정하고 있는 점，② 원고는 하나의 공사계약서를 작성하였으나 계약서상 공사금액을 축산용 기자재 대금과 축사신축 공사비로 구분하거나 별도의 상세한 견적서를 첨부하여 양자를 분명하게 구분한 점 ③ 또한 원고는 위와 같이 구분한 대로 영세율과 일반세율 세금계산서를 나누어 발행하였고， 그 내용대로 피고에게 부가가치세 신고를 한 점，④ 축산업자는 축사만을 신축할 수 있고， 반대로 축산용 기자재만 을 구입하여 기존 축사에 설치할 수도 있으며， 축사에 어떤 축산용 기자재를 설치할 것인지도 그 목적이나 상황에 따라 상이할 것인 점，⑤ 축산용 기자재 판매업만을 하는 경우와 축산용 기자재 판매업 및 건설업을 함께 하는 경우를 구분하여 달리 취급할 이유가 없는 점，⑥ 원고가 축산용 기자재와 축사 신축을 함께 공급한 사례에서 전자의 대금이 후자의 대금보다 대부분 더 많았던 점，⑦ 피고 스스로도 원고가 공급한 축산용 기자재 중 분뇨저장탱크에 대하여는 영세율 적용을 인정하였는바，분뇨제거기，축산급이기등 나머지 축산용 기자재와 분뇨저장탱크 사이에 영세율 적용을 달리할 만한 본질적인 차이가 있다고 보기 어려운 점，⑧ 축사시설 현대화사업에 따른 보조금을 집행하는 행정기관에서도 축산용 기자재의 경우에는 영세율을 적용하여 사업비를 산정하고 있는 점，⑨ 축산용 기자재에 대한 영세율 적용을 부정한다면 축산업자가 부가가치세를 추가적으로 부담해야 하는바，이는 농민에게 공급하는 농축산용 기자재 거래를 특별히 보호하고자 하는 국가의 정책목적 및 구 조세특례제한법의 입법취지에도 반하는 점 등에 비추어 보면， 원고가 박BB 등에게 공급한 축산용 기자재에 대하여는 부가가치세 영세율이 적용되어야 하고 축산용 기자재의 공급이 축사 신축에 필수적으로 부수되는 재화라고 볼 수도 없다.

(iii)in accordance with the above judgment, zero tax rate is applied to the livestock machinery supplied by the Plaintiff, and the part which exceeds zero hundred (00) of the first term portion in 2006, the second term portion in 2006, the second term portion in 2008, the second term portion in 2009, the second term portion in 2009, and the second term portion in 2009, and the second term portion in 2000, and the part which exceeds one hundred (000) of the second term portion in 2007, and the part which exceeds one hundred (000) of the first term portion in 2008.

3. Conclusion

Therefore, the plaintiff's claim of this case is justified within the above scope of recognition, and the other claim is dismissed as it is without merit. It is so decided as per Disposition.