Where a contractor lends construction materials from a contractor to a contractor and then purchases and returns the same kind of materials after completion, whether the act of return constitutes a transaction subject to value-added tax (negative)

Where the contractor of the construction project lends part of the construction work from the contractor and purchases and returns the same kind, quality, and quantity of the materials that have been used after completion, the act of borrowing and returning the materials is a temporary act of supplying the goods temporarily conducted in relation to the services that are the main transaction, and the supply of the goods is naturally included in the supply of the services that are the main transaction, and the price of the goods is also included in the supply price of the main service, so the act of returning the materials is not subject to value-added tax independently.

Article 1 (4) of the Value-Added Tax Act, Article 3 subparagraph 1 of the Enforcement Decree of the Value-Added Tax Act, and Article 3 subparagraph 3

Attorney Park Sung-chul et al., Counsel for the defendant

Head of the Do Tax Office

Seoul High Court Decision 81Gu89 delivered on December 2, 1981

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

The grounds of appeal by the defendant litigant are examined.

According to the facts duly established by the court below, the plaintiff, as an electricity construction business operator, was awarded a contract with the 2601 unit of the Army at the time of performing the telephone construction work at 55,550,000 won in total, and used part of the materials necessary for the construction from the above unit at the request of the above unit, and purchased and returned the same kind, quality, and quantity of materials as the materials that have been leased after the completion of the construction work. The act of borrowing and returning the above materials is an act of temporarily supplying the goods related to the service which is the main transaction, and the supply of the goods is naturally included in the supply of the service of this case, which is the main transaction, and the price of the goods is also calculated as included in the supply price of the main service. Thus, the act of returning the above materials shall not be subject to value-added tax independently pursuant to Article 1 (4) 1 and 3 of the Enforcement Decree of the Value-Added Tax Act.

Although the judgment of the court below is somewhat insufficient and inappropriate in its reasoning, it is justified in its conclusion that the disposition of this case where the value-added tax is imposed on the return of the above materials in accordance with the above legal principles, and it cannot be accepted in the dissenting opinion of the court below.

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

Justices Kim Jung-soo (Presiding Justice) and Lee Jong-young's Lee Jong-young