Revocation of Imposition of Value-Added Tax

Since the input tax deduction based on the processing purchase tax invoice is unfair, the determination of the value-added tax which is not subject to input tax deduction is legitimate.

Value-Added Tax Amount Article 17

1. The plaintiff's claim is dismissed.

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

Value-added tax imposed by the Defendant against the Plaintiff on March 16, 2006 shall be revoked on the first term portion of 1,189,280 won in 202, and the second term portion of 2,048,710 won in 202.

1. Details of the disposition;

A. From December 8, 2001 to July 1, 2005, the Plaintiff is a business operator who operates a general restaurant under the trade name of ○○○-dong ○○○○○○○ from December 8, 2001 to July 1, 2005.

B. The Plaintiff received purchase tax invoices of KRW 14,785,00 in total and KRW 17,064,00 in total and KRW 17,00 in total and KRW 2-term portions from ○○ Alcoholic Beverages (hereinafter “instant tax invoices”) on January 2002, and filed a return of value-added tax for the first and second years in 2002, and deducted the relevant input tax amount.

C. The Seoul Regional Tax Office conducted a tracking investigation of the distribution process of ○ Alcoholic Beverages, and found out the disguised or unmaterial transaction between the Plaintiff, etc., and accused ○○ Alcoholic Beverages, the representative of ○○ Alcoholic Beverages, etc., and notified the Defendant of taxation data on the Plaintiff.

D. Accordingly, the Defendant, on July 1, 2005, deducted all input tax amounts on the tax invoice of this case from input tax amount, and notified the Plaintiff of KRW 2,556,676 for the first period of January, 2002, and KRW 2,805,321 for the second period.

E. On January 9, 2006, the Commissioner of the National Tax Service filed a request for review with the Commissioner of the National Tax Service, after deliberation by the National Tax Examination Committee, determined that, with respect to the portion of KRW 8,638,00,232 on January 1, 2002 (hereinafter referred to as “the portion cited by the National Tax Service”), the Plaintiff’s actual purchase of alcoholic beverages from ○○ Alcoholic Beverages and paid the price thereof, reduced the initial value-added tax amount to KRW 1,189,280, KRW 2,002, KRW 2,000 on February 200, and KRW 5,877,272 on the same day (hereinafter referred to as “the portion”), the Plaintiff’s initial payment of input tax amount to KRW 360,60 on the date of the instant tax invoice by deducting the above amount from KRW 1,600 on the date of the instant disposition, it is difficult to view the Plaintiff’s actual payment of KRW 360,000.

[Ground of Recognition] Unsatisfy, Gap 1-1, 2, and 3.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The Plaintiff stored the Plaintiff’s purchase card under the Plaintiff’s name in ○○ Alcoholic Beverages for the convenience of settlement during the process of settling the price of alcoholic beverages. However, the Plaintiff purchased alcoholic beverages from ○○ Alcoholic Beverages, and thereafter, the Plaintiff received direct payments from ○○○ through the Plaintiff’s purchase passbook in the Plaintiff’s name (the part cited by the National Tax Service), and the remainder of the issue amount, excluding this, was paid in cash to ○○○ and ○○○, etc., who are employees of the Plaintiff.

However, regarding the portion of ○○ Alcoholic Beverages received from the Plaintiff in cash, it was only a settlement process with the Plaintiff’s alcoholic beverage purchase card in the name of the Plaintiff, which was kept after being deposited by account transfer, etc. in order to raise the trading ratio of alcoholic beverage purchase cards.

Therefore, the instant tax invoice is true, which the Plaintiff actually purchased and received alcoholic beverages from ○○ Alcoholic Beverages. Nevertheless, the instant disposition that did not deduct input tax equivalent to the amount of the instant issue from the supply price stated in the instant tax invoice is unlawful.

B. Relevant statutes

Value-Added Tax Act

Article 17 (Payable Tax Amount)

(1) The amount of value-added taxes payable by an entrepreneur (hereinafter referred to as the “paid tax amount”) shall be the amount computed by deducting the tax amount under the following subparagraphs (hereinafter referred to as the “purchase tax amount”) from the tax amount on the goods and services supplied by him (hereinafter referred to as the “sales tax amount”): Provided, That where an input tax amount exceeds the output tax amount, it shall be the refundable tax amount (hereinafter referred

1. The tax amount for the supply of goods or services used or to be used for his own business;

2. The tax amount on the earnings from such tasks as have been or will be used for his own business.

(2) The following input taxes shall not be deducted from the output tax amount:

1. An input tax amount in case where the list of the total tax invoices by customer is not submitted under Article 20 (1) and (2), or the input tax amount on the portion not entered or entered differently from the fact, in case where the whole or part of the registration numbers or supply values by transaction parties is not entered or entered differently from the fact, from among the entered items in the submitted list of the total tax invoices by customer, excluding the input tax amount in

1-2. An input tax amount, in case where the tax invoice as provided in Article 16 (1) and (3) is not delivered, or the whole of the matters to be entered under Article 16 (1) 1 through 4 (hereinafter referred to as a “necessary entry item”) on the delivered tax invoice is not entered or entered differently from the fact: Provided, That the input tax amount in such case as prescribed by the Presidential Decree shall be excluded;

(6) Matters necessary for the law of the input tax amount not deducted under paragraph (2) shall be prescribed by the Presidential Decree.

(c) Fact of recognition;

(1) In fact, “general restaurant in the Plaintiff’s name” actually operated by the Plaintiff’s ○○ number, and when supplied alcoholic beverages from ○○ alcohol, as cited by the National Tax Service, the Plaintiff’s account transfer from ○○’s account to dives trading account in the Plaintiff’s name to dives trading account, and the Plaintiff’s account was settled with the Plaintiff’s purchase card in the Plaintiff’s custody, and the Plaintiff’s account statement of alcoholic beverage sales (A 4-1-8) submitted by ○○ number was all deposited with dives banks.

(2) During the process of tracking the distribution process of alcoholic beverages, the Seoul Regional Tax Office prepared a written confirmation that the instant tax invoice was issued through a non-licensed intermediate intermediary for alcoholic beverages (However, new police officers testified that the aforementioned confirmation was an error).

(3) The Plaintiff has transacted with ○ Alcoholic Beverages from November 2001 to July 1, 2005. From January 24, 2002 to May 3, 2002, 2002, the Plaintiff transferred all of the amount of alcoholic beverages from ○○’s account to the Plaintiff’s purchase account of alcoholic beverages to the Plaintiff’s purchase account of alcoholic beverages. However, from May 19, 2002 to November 15, 2002, only one transaction was deposited from ○○ number of accounts to the Plaintiff’s purchase account of alcoholic beverages, and immediately thereafter, the transaction was deposited into the Plaintiff’s purchase account of alcoholic beverages from ○○ number of accounts to dives bank.

[Evidence] Gap 3, Eul 4-1 to 8, Eul 3, Eul 4-1 to 4-3, the purport of the whole argument

D. Determination

As seen earlier, ○○ Alcoholic Beverages were accused of criminal charges by the representative on charges of false issuance of tax invoices. The Plaintiff purchased a certain portion of alcoholic beverages from ○○ Alcoholic Beverages on January 24, 2002 to November 15, 2002, and continuously deposited the Plaintiff’s purchase account through banking, and dealt with the payment by means of alcoholic beverage purchase card. As such, ○○ Alcoholic Beverages wanting to be dealt with by means of a liquor purchase card after May 19, 2002, it is difficult for the Plaintiff to deposit the same with the next account rather than receiving cash payment from the Plaintiff, or handle it with ○○○ number of alcoholic beverages accounts like other transactions, and it is difficult for the Plaintiff to find that the Plaintiff paid the same portion of alcoholic beverages to ○○○○○△△△△△△△△△△△△△△△, on the grounds that only the evidence that the Plaintiff deposited it into the account of purchase of alcoholic beverages on a relatively short basis is insufficient to find the specific amount of the Plaintiff’s new payment of alcoholic beverages beverages in cash other than the issue of this case.

Therefore, the instant disposition is lawful.

3. Conclusion

Thus, the plaintiff's claim shall be dismissed as it is without merit.