2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The Defendants’ refusal to rectify each value-added tax stated in the list (attached Form 1) shall be revoked.

A. The Plaintiff reported and paid the first value-added tax in 2012, when selling kimchi in the form of ornamental, bottled, or any other similar form, as a corporation engaged in hydrogen processing and storage business, grain processed products manufacturing business, general wholesale business, etc.

B. The Plaintiff asserted that kimchi sold in the package as above falls under value-added tax exemption, and on July 25, 2017, the Plaintiff filed a request for correction against the Defendants for refund of the first half-year value-added tax reported and paid as shown in the table (attached Form 1). However, the Defendants issued a disposition to refuse the Plaintiff’s request for correction on September 25, 2017 and September 26, 2017 pursuant to Article 10(1) [Attachment Table 1] of the former Enforcement Rule of the Value-Added Tax Act (amended by Ordinance of the Ministry of Strategy and Finance No. 355, Jun. 28, 2013; hereinafter the same shall apply) on the ground that kimchi sold by the Plaintiff does not fall under value-added tax exemption pursuant to subparagraph 12 of the above table (hereinafter referred to as “instant disposition”).

C. The Plaintiff dissatisfied with the instant disposition and filed an appeal with the Tax Tribunal on December 22, 2017, but the Tax Tribunal dismissed all of the Plaintiff’s claims on April 9, 2018.

[Reasons for Recognition] The facts without dispute, Gap evidence Nos. 1, 2, and 3 (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Article 28(2)1 of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 24638, Jun. 28, 2013; hereinafter the same) provides for "Simple processed food prescribed by Ordinance of the Ministry of Strategy and Finance, such as kimchi and dub, etc." as unprocessed food eligible for value-added tax exemption. In light of the purport, text, history, etc. of the above provision, the above provision merely delegates the authority to determine the scope of simple processed food eligible for value-added tax other than kimchi and dub, which is referred to in Ordinance of the Ministry of Strategy and Finance as an example of simple processed food, and it cannot be deemed that the provision delegated the authority to restrict the scope of the Kimchi and dub

Nevertheless, Article 10(1) [Attachment 1] of the former Enforcement Rule of the Value-Added Tax Act sets forth the scope of unprocessed foodstuffs subject to value-added tax exemption and limits the scope of kimchi subject to value-added tax exemption at will by stipulating that "a kimchi shall be equipped with manufacturing facilities and shall be supplied by packaging in an independent trade unit for the purpose of sale and in other similar forms, but shall include cases of temporary packing, such as entry, disease, etc. for simple transportation convenience." (hereinafter referred to as "the provisions of this case"), which is subject to value-added tax exemption by prescribing the scope of unprocessed foodstuffs subject to value-added tax exemption. Therefore, the disposition of this case based on the provisions of this case shall be revoked as it is unlawful.

B. Relevant statutes

[Attachment 2] The entry is as follows.

C. Determination

1) Article 12(1)1 of the former Value-Added Tax Act (amended by Act No. 11873, Jun. 7, 2013; hereinafter the same) provides for “unprocessed foodstuffs (including agricultural products, stock farm products, fishery products, and forest products supplied for food)” as one of the goods exempt from value-added tax, and agricultural products, livestock products, fishery products, and forest products produced in the Republic of Korea and not provided for food, as prescribed by Presidential Decree.” Article 28 of the former Enforcement Decree of the Value-Added Tax Act provides that “unprocessed foodstuffs stipulated in Article 12(1)1 of the Act shall be referred to as “unprocessed foodstuffs” in this Article. Article 12(1)1 of the former Enforcement Decree of the Value-Added Tax Act provides that “any unprocessed foodstuffs, such as kimchi, fimite, etc., among unprocessed foodstuffs, shall be excluded from the scope of unprocessed foodstuffs, and any unprocessed food that is temporarily exempted from packing, packing, and so forth as simple and unprocessed food products supplied for the purpose of sale.”

2) Comprehensively taking account of the following circumstances that can be recognized in light of the purport, language, structure, and history of each of the above statutes, Article 28(2)1 of the former Enforcement Decree of the Value-Added Tax Act provides that the authority to determine the scope of exemption from value-added tax among simple processed food, including kimchi and wharf, shall be delegated to the Ministry of Strategy and Finance. The instant provision is legal and effective as it was prepared within the scope of delegation. Accordingly, the Plaintiff’s assertion is without merit.

① The purpose of Article 12(1)1 of the former Value-Added Tax Act is to reduce the burden of livelihood and promote the stabilization of prices by reducing the burden of value-added tax on the basic food materials necessary for the daily life of the general public. Accordingly, Article 28 of the former Enforcement Decree of the Value-Added Tax Act can be seen as unprocessed food within a prior meaning, and Article 28 of the former Enforcement Decree of the Value-Added Tax Act delegates to the Minister of Strategy and Finance the specific scope of unprocessed food that falls under the object of tax exemption (hereinafter referred to as “net unprocessed food”) of “those used for food by undergoing primary processing to the extent that the original nature of the original food does not change (hereinafter referred to as “net unprocessed food”), and simple processed food (Paragraph (1)), etc., to the extent that it is included in unprocessed food (Paragraph (2)1).

As above, Article 28 (1) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 2010, Jan. 1, 2011; hereinafter “former Enforcement Decree of the Value-Added Tax Act”) stipulates that “a simple processed food is exempted from value-added tax by embodying “netly unprocessed food (i.e., e., e., e., e., stuffs, vegetables, and vegetables, etc. under Article 28 (1) of the former Enforcement Decree of the Value-Added Tax Act)” and pure primary processed food (i.e., e., e., products manufactured in pure unprocessed food)” (Article 28 (1) of the former Enforcement Decree of the Value-Added Tax Act is added to the scope of unprocessed food separate from the scope of unprocessed food under Article 28 (2) 1 of the former Enforcement Decree of the Value-Added Tax Act, which is excluded from the concept of unprocessed food under the above paragraph (1).

In light of the system of these relevant regulations, a broad legislative discretion is recognized to determine which product among various simple processed foodstuffs is to be included in the tax-free object, and what requirements among the individual items are to be exempted from taxation. Here, the legislators can determine the tax-free object by adding certain product among simple processed foodstuffs to the tax-free object but excluding the primary processing in a specific form or method among them.

(2) Article 28(2)1 of the former Enforcement Decree of the Value-Added Tax Act provides that "a simple processed food prescribed by Ordinance of the Ministry of Strategy and Finance, such as kimchi and dubage" is "a simple processed food" as unprocessed food that falls under tax-free goods. The prior meaning of ", etc." indicates that the same kind is more used after "sacciny or fish -" (see Korean Language Preliminary). In the case of use in delegation provisions such as " etc. prescribed by Ordinance of the Ministry of Strategy and Finance, etc., it is generally used in order to clarify the scope and limit of delegation by specifically presenting some of the items to be stipulated in subordinate Acts and subordinate statutes. Therefore, it cannot be concluded that the purport of Article 28(2)1 of the former Enforcement Decree of the Value-Added Tax Act provides that "kimchi and dubage, etc." is somewhat comprehensive and abstract in terms of simple processing, and that the legislative discretion on simple processed food that falls under tax-free food is granted, and it is difficult to see the purport of simple and simple interpretation of item-processing food as a simple food.

③ The instant provision provides that “kimchis shall be equipped with manufacturing facilities and supplied in an independent trading unit for the purpose of sale, except for cases where input, disease, or other similar forms of packing is temporarily carried out for simple transportation convenience, and the form, unit, purpose, etc. of packing shall be the basis of value-added tax exemption.” Accordingly, the Plaintiff asserts that the Plaintiff’s use of the packaging basis as one of the primary processes to the extent that the original nature of packing does not change. However, according to the prior meaning of Article 12(1)1 of the former Value-Added Tax Act, it is unreasonable to view that the Plaintiff’s use of the packaging method and the scope of simple processing included in the non-processed food should be the same as that of the instant manufacturing facilities for the purpose of sale, and thus, it cannot be seen that the Plaintiff’s use of the packaging method and its scope cannot be seen as being unreasonable because Article 28(1) of the former Enforcement Decree of the Value-Added Tax Act does not violate the purpose of the former Enforcement Decree.

(4) From the time of enactment by Act No. 2934 of Dec. 22, 1976, the Value-Added Tax Act stipulated “unprocessed foodstuffs (including agricultural products, livestock products, fishery products, and forest products for food)” as the subject of value-added tax exemption (Article 12(1)1), and Article 28(1) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 8409 of Dec. 31, 1976), one of the unprocessed foodstuffs is “agricultural products, livestock products, fishery products, forestry products, and other simple processed foodstuffs prescribed by the Ordinance of the Ministry of Finance and Economy, other than those referred to in subparagraphs 1 through 111,” and Article 10(1) [Attached Table 1] of the former Enforcement Rule of the Value-Added Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 1246 of Mar. 11, 1977) was inserted into the package of kimchi and 7.

As the Enforcement Decree of the Value-Added Tax Act was amended by Presidential Decree No. 17041 on December 29, 2000, Article 28(2)1 of the Value-Added Tax Act separately separate provisions on “ simple processing food prescribed by the Ordinance of the Ministry of Finance and Economy, such as kimchi and dub,” and stipulated “kimchi and dub” in the Enforcement Decree. In addition, Article 10(1) [Attachment Table 1] of the former Enforcement Rule of the Value-Added Tax Act, amended by Ordinance of the Ministry of Finance and Economy No. 193 on April 3, 2001, Article 10(1) [Attachment Table 1] 12 of the Enforcement Rule of the Value-Added Tax Act, as simple processing food, “kimchi, funch, wed, wed, wed, wed, wed, wed, and supplied in an independent transaction unit for the purpose of sale, but it includes temporary packing, entry, etc. for simple transportation convenience” Article 24(1).

As above, the Plaintiff asserts that the Enforcement Decree of the Value-Added Tax Act was amended as of December 29, 200 to extend the scope of tax exemption by recognizing "kimchi and dub" as simple processed food subject to value-added tax exemption without any restriction. However, as seen earlier, the Enforcement Rule of the Value-Added Tax Act has consistently stipulated the scope of simple processed food subject to value-added tax exemption for several hundred and seventy years after the amendment of January 19, 1978 as "kimchi, spove, spoves, spoves, spoves, spoves, spoves, spoves, spoves, spoves, and spoves (excluding those packaged in the similar form)" as "gambling and unprocessed food that falls under the category of 1, 200, 200, 1,0000, 2,000, 3,000, 1,000.

Rather, in light of the above amendment history of the Value-Added Tax Act, our Value-Added Tax Act has consistently maintained the long-standing attitude of excluding the object of value-added tax exemption in the case of simple processed foodstuffs which have undergone certain packaging among simple processed foodstuffs, including "kimchi and dub", and it is difficult to find the purport of excluding "kimchi and dub" from other simple processed foodstuffs.

3. Conclusion

Therefore, all of the claims of the plaintiff are dismissed as it is without merit. It is so decided as per Disposition.