Gwangju District Court-2014-Guhap-229 ( April 17, 2014)

Whether liability to pay the individual consumption tax may be imposed by deeming the act of combining professional plates and butane for the purpose of sale in a place other than a manufacturing place as the act of manufacturing.

The Plaintiff and the designated parties are liable to pay individual consumption tax, etc. on the following grounds: (a) the Plaintiff and the designated parties received economic benefits using the difference between the rates of butane and propane by purchasing a propane from a propane wholesaler and mixing it into butane; and (b) the Plaintiff and the designated parties received economic benefits by selling the propane to consumers.

Article 1(2)4 of the Individual Consumption Tax Act

2014Nu5841 Revocation of revocation of imposition of individual consumption tax

AA

000 director of the tax office

Gwangju District Court Decision 2014Guhap229 Decided July 17, 2014

November 13, 2014

November 20, 2014

1. The plaintiff (appointed party)'s claim that is changed in exchange at the trial is dismissed.

2. The costs of the lawsuit are borne by the Plaintiff (Appointed Party).

The decision of the first instance court is revoked. On July 5, 2013, the Defendant revoked the imposition of KRW 128,917,610, including individual consumption tax, and KRW 34,010,210 as individual consumption tax, and individual consumption tax, and KRW 194,16,150 as individual consumption tax, and KRW 194,16,150 as individual consumption tax, etc., imposed on the appointed party B against the Plaintiff (the appointed party; hereinafter referred to as the “Plaintiff”) on the Plaintiff (the Plaintiff and the appointed party changed the purport of the claim to the Plaintiff in exchange for the foregoing in the trial).

1. Details of the disposition;

A. The Plaintiff and the designated parties are entrepreneurs engaging in the business of filling and selling liquefied petroleum gas for vehicle fuel.

B. On November 1, 2012, through November 20, 2012, the commissioner of K Regional Tax Office conducted an investigation into the distribution tracking process of fake petroleum products from November 1, 2012 to November 20, 2012, and confirmed the following facts against the Plaintiff and the designated parties, and notified the Defendant that the Plaintiff and the designated parties’ act constituted an act of manufacturing taxable goods.

C. Accordingly, on July 5, 2013, the Defendant imposed a tax of KRW 128,917,610 on the Plaintiff on the part of the Plaintiff’s sales of butane for vehicle fuel (275 won per kilogramme; hereinafter “the individual consumption tax, etc.”) and the education tax (including each additional tax; hereinafter “the individual consumption tax, etc.”) on the Plaintiff; imposed a tax of KRW 34,010,210 on the SelectionB; imposed a tax of KRW 194,16,150 on the SelectionB; and imposed a tax of KRW 194,16,150 on the SelectionB (hereinafter “each disposition”).

D. On August 22, 2013, the Plaintiff and the designated parties are dissatisfied with each of the dispositions of this case, and they are tried at the Tax Tribunal.

A claim was filed, but all of which was dismissed on November 20, 2013.

[Grounds for Recognition] Facts without dispute, entry in Gap evidence 2 and 3 (including each number), the whole pleadings

purport of this chapter

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The plaintiff asserts that each of the dispositions of this case is unlawful on the following grounds.

1) According to Article 1(1)4 (e) and (f) of the Individual Consumption Tax Act, a mixture of butane or propane is treated as butane or propane according to the mixed ratio, regardless of whether it is an butane or propane, and individual consumption tax is levied as a source on manufacturers. Thus, the mixture of propane and butane is not subject to individual consumption tax after the mixture of propane or butane.

2) The Plaintiff and the designated parties are not manufacturers of liquefied petroleum gas, which are equipped with facilities for mixing propane and but are not manufacturers’ manufacturing places, and thus, they cannot be deemed as manufacturers (the manufacturers) who mixed propane with butane for the purpose of sale at places other than manufacturers’ manufacturing places. Therefore, the persons liable to pay individual consumption tax, etc., who manufacture taxable goods and take them out of the manufacturing places, are those who are not the Plaintiff and the designated parties.

3) Even if the Plaintiff and the designated parties are manufacturers, since they were not aware that they were liable to pay individual consumption tax, etc. because they did not participate in the mixed removal of propane and but did not know that they were liable to pay individual consumption tax, the imposition of additional tax is unlawful due to justifiable grounds.

4) The Plaintiff and the designated parties pay the value-added tax and the income tax on the profits from the sale of propane and but the imposition of the individual consumption tax, etc. in addition, there is a risk of double taxation. Moreover, even though the Plaintiff and the designated parties purchased propane and but the Plaintiff purchased propane reflecting the individual consumption tax, it is double taxation that the Defendant imposed the individual consumption tax, etc. on the mixture of propane and but

5) Although there is no ground to adjust the carbon tax pursuant to Article 1(7) of the Individual Consumption Tax Act, the Defendants erred by retroactively applying the carbon tax rate to the portion of liquefied petroleum gas sales (bane) that was previously traded to the Plaintiff and designated parties.

(b) Related statutes;

It is as shown in the attached Table related statutes.

(c) Fact of recognition;

After the Plaintiff and the designated parties were released from a tank installed in a liquefied petroleum gas manufacturing company (E, G, etc.), they moved the tank glass vehicle into a wholesale company (S Energy Co., Ltd., O Energy Co., Ltd.) and received the protocol board placed in the tank glass vehicle from the above wholesale company, and then sold it to its own storage tank, and then sold it to consumers for vehicle fuel.

The professional board wholesalers, employed by the Plaintiff and the designated parties, have measured the weight of the tank lorri vehicle when they put into the wholesale company with the tank lorri vehicle, have injected the ordered quantity into the tank lorri vehicle, have measured the weight of the tank lorri vehicle, and then have calculated the weight of the tank lorri vehicle in the tank lorri vehicle and received the payment from the Plaintiff and the designated parties.

A driver, employed by the Plaintiff and the designated parties, visited a propane wholesaler directly to injecting the propane, and the propane wholesaler did not transport or directly supply the propane to the workplace of the Plaintiff and the designated parties.

[Ground of Recognition] Facts without dispute, the evidence mentioned above, Eul evidence No. 2-1 and Eul evidence No. 2, and the purport of the whole pleading

D. Determination

1) Whether a mixture of propane and butane is subject to individual consumption tax

According to Article 1(2)4 (e) and (f), Article 3 subparag. 2, and Article 5 subparag. 1 (c) of the Individual Consumption Tax Act, the mixture of propane and butane among petroleum gas is deemed as an act of manufacturing and imposing the individual consumption tax on the person who manufactures and takes out the mixture of petroleum gas for the purpose of selling at a non-factory. As seen below (2) 2, in a case where both the Plaintiff and the designated person, who are not the manufacturer, carry out the mixture of propane and butane for the purpose of selling at a non-factory, they also constitute the imposition of the individual consumption tax under the above provision.

2) Whether the Plaintiff and the designated parties constitute taxpayers

As seen above, inasmuch as a mixture of propane and butane is deemed as an act of manufacturing and removing them from a manufacturing place for the purpose of sale at a non-manufacturing place, individual consumption tax is imposed on the person who manufactures and takes them out. In other words, “manufacturing place” provided for in the Individual Consumption Tax Act refers to a mixture of propane and but the manufacturer’s act of mixing propane with butane using equipment at his/her business place. Thus, it is not different from that of a manufacturer, and it constitutes a mixture of propane and but not a manufacturing place for sale at a non-manufacturing place, and thus, it is reasonable to deem that the Plaintiff and the designated persons, who purchased propane and but were not manufacturers, purchased propane in combination with the aforementioned business place, were not aware of the difference between the Plaintiff and the designated persons who purchased propane and propane, and thus, the Plaintiff and the designated persons who purchased propane in combination with the same can only be deemed to have been combined with the aforementioned business place.

3) Whether the imposition of additional tax is illegal

Under the tax law, the taxpayer's intention and negligence is not considered as administrative sanctions imposed in accordance with the law when the taxpayer violates the reporting and tax liability prescribed by the law without justifiable grounds in order to facilitate the exercise of the right to impose taxes and the realization of the tax claim;

The land or mistake of statutes cannot be deemed as a justifiable ground (see, e.g., Supreme Court Decision 2013Du1829, May 23, 2013). Moreover, inasmuch as there is a conflict of opinion due to intent under the interpretation of tax law, the determination that a taxpayer is exempted from the obligation to pay taxes, etc. by interpreting his/her own name is merely merely a site or misunderstanding of the relevant statutes, and thus does not constitute a justifiable ground that does not constitute an offense of breach of duty (see, e.g., Supreme Court Decision 2011Du1776, Jun. 27, 2013).

In light of the above legal principles, even if the Plaintiff and the designated parties did not know that the act of mixing and removing propane and but did not know that they had tax liability, the land or mistake in such statutes cannot be deemed a justifiable ground for neglecting the duty to pay taxes and the return and tax liability. Even if the Plaintiff and the designated parties were to have determined that they were exempted from the tax liability by interpreting their names, they did not err in the misapprehension of Article 5 subparag. 1(c) of the Individual Consumption Tax Act, even though they did not have conflicting opinions as to the fact that the act of the Plaintiff and the designated parties constituted the act of manufacturing. Thus, the imposition of additional tax is lawful because it is difficult to view that the Plaintiff and the designated parties did not have any justifiable reason to believe that they did not cause any breach of their duty

4) Whether it is double taxation

Value-added tax is levied on the supply of goods or services, while income tax is imposed on an individual income, in this case, a mixture of propane and butane between the Plaintiff and the designated parties made a new taxable article due to the manufacturing activity under Article 3 subparag. 2 and Article 5 subparag. 1 of the Individual Consumption Tax Act, and the Defendant imposed the individual consumption tax on the sales portion of the taxable article, so it cannot be deemed that there is a risk of double taxation. Furthermore, even if the plaintiffs purchased propane and but the new taxable article is manufactured by mixing the propane and but the butane purchased, it cannot be deemed that the Defendant again imposed the individual consumption tax.

5) Whether the application of the coal rates is unlawful

According to Article 1(7) of the Individual Consumption Tax Act, "Tax rate may be adjusted by Presidential Decree within the scope of 30/100 of the tax rate in cases where it is necessary for business adjustment, price stabilization, supply and demand adjustment, and for raising funds for support projects due to price fluctuation in the national economy for the efficient operation of the national economy." Such carbon rate is a flexible change of the basic tax rate under the Act, and is applied temporarily after adjustment according to the policy purpose for business adjustment. The tax rate adjustment is applied as a general individual consumption tax imposition standard for business operators. As such, the tax rate adjustment is not the defendant, and the defendant is only obligated to impose individual consumption tax according to the Presidential Decree that is not the defendant, and the portion of sales of petroleum gas traded by the plaintiff and the designated parties is a new taxable article that combines propane with the propane. Accordingly, the defendant has already imposed individual consumption tax under Article 2-2 of the Enforcement Decree of the Individual Consumption Tax Act (275 kilograms per kilogram) to which the tax rate applied by the government has already a reason for adjustment of the tax rate.

6) Sub-determination

Therefore, each of the dispositions of this case rendered by the Defendant against the Plaintiff and the designated parties is governed by the Individual Consumption Tax Act.

was made pursuant to this chapter and is lawful.

3. Conclusion

Then, the plaintiff's claim that is changed in exchange at the trial is dismissed as there is no reason to do so.

D. It is so decided as per Disposition.