Whether the provisions of proviso of Article 19 (1) of the Enforcement Rule of the Value-Added Tax Act are violated.

Article 17 (3) of the Value-Added Tax Act provides that the constructive input tax amount shall be deducted for the prescribed goods, and only the method of calculating the amount shall be delegated to the Enforcement Decree, and the deduction rate shall be set by the Ordinance of the Ministry of Finance and Economy under the premise of the deduction of the constructive input tax amount by Article 62 (1) of the Enforcement Decree of the same Act. However, the deduction rate shall be set by delegation to the Enforcement Rule of the same Act (the Ordinance of the Ministry of Finance and Economy). Article 19 (1) of the Enforcement Rule of the same Act provides that the deduction rate shall not apply to the prescribed manufacturing industry in the main sentence of the same Act. In this case, even if the deduction rate is not determined, it is impossible to calculate the deduction amount for the prescribed manufacturing industry and it is impossible to deduct the constructive input tax amount by failing to determine the deduction rate, so the above proviso is null

Article 19(1) of the Enforcement Rule of the Value-Added Tax Act

Supreme Court en banc Decision 86Nu734 Decided December 29, 1987

Live drinks Corporation

The director of the North Incheon National Tax Office

Seoul High Court Decision 87Gu580 delivered on January 28, 1988

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal by the defendant litigant are examined.

Article 17 (3) of the Value-Added Tax Act provides that the constructive input tax amount shall be deducted for the prescribed goods, and only the method of calculating such amount shall be delegated to the Enforcement Decree. Article 62 (1) of the Enforcement Decree of the same Act provides that the deduction rate shall be set by the Ordinance of the Ministry of Finance and Economy on the premise of the deduction of the constructive input tax amount. However, Article 19 (1) of the Enforcement Decree of the same Act provides that the deduction rate shall be set by delegation to the Enforcement Rule (the Ordinance of the Ministry of Finance and Economy). Article 19 (1) of the same Act provides that the deduction rate shall not apply to the manufacturing industry under the main provision of the same Act (the attached Table 3). In other words, it is impossible to calculate the deduction amount for the prescribed manufacturing industry and it is impossible to calculate the constructive input tax amount due to the failure to set the deduction rate in this case, and it is invalid because the above proviso is in violation of the Value-Added Tax Act and its Enforcement Decree (see Supreme Court Decision 86Nu734, Dec. 29, 19, 1987).

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Jin-hun (Presiding Justice)