The case holding that the supply of services constitutes the supply of services by the supply of raw materials, which are supplied with raw materials and processed with salt, letter, etc.

In a case where the raw materials are supplied by others after being provided with raw materials from others, and the raw materials completed through salt color, lettering, and arranged processing are supplied to the same person, in light of the cost and process, etc. required for the manufacture of the raw materials, major materials are the raw materials supplied by the same person, and salt materials, synthetic resin, wing agents, etc., which are naturally incidental to the processing, are all included in the processing service, if they are included in the processing service, the transaction of the supply of the above raw materials constitutes the supply of services.

Articles 1(4), 6, and 7 of the Value-Added Tax Act; Articles 3, 14 subparag. 2, and 18(2) of the Enforcement Decree of the Value-Added Tax Act;

Attorneys Choi Jin-chul, et al., Counsel for the defendant-appellant

Head of Guro Tax Office

Seoul High Court Decision 84Gu350 decided June 26, 1985

The appeal is dismissed.

The costs of appeal shall be borne by the plaintiff.

The grounds of appeal are examined.

In light of the provisions of Articles 1(4), 6, and 7 of the Value-Added Tax Act, and Articles 3, 14 subparag. 2, and 18(2) of the Enforcement Decree of the Value-Added Tax Act, which provide for the criteria for distinguishing the supply of goods and the supply of services subject to value-added tax, the supply of goods or services, which is essential for the supply of goods or services, shall be deemed as the supply of services, while the supply of goods or services, which is accompanied by the supply of goods or services, shall be deemed as being included in the main transaction, by a processing contract under which the goods are delivered by the other party for the production of new goods, shall bear all or part of the main materials, and the delivery of goods or services, which is delivered by the other party for the manufacture of new goods, shall be deemed as the supply of services, provided that the supply of goods or services, which is essential for the supply of goods or services, is ordinarily incidental to

According to the reasoning of the judgment below, from April 1982 to March 1983, the court below determined that the plaintiff supplied raw materials from the non-party company to the non-party company by the second local letter of credit between the non-party company, which is the export product manufacturing company, with salt rates, resins, and wings, etc. under the contract between the non-party company and the non-party company, and then supplied them again to the non-party company with salt 461,434,649 won in total. In light of the cost and process required for the manufacture of the raw materials, the main materials are the raw materials supplied from the above non-party company. Since salt rates, synthetic resin, and wings, etc., which should naturally be attached to the process of the manufacture of the raw materials, are included in the processing service. Accordingly, the judgment below held that the supply of the raw materials in this case constitutes the supply of the services.

In light of the records, the above fact-finding and judgment of the court below are just in accordance with the legal principles that distinguish the above supply of goods and the supply of services, and there is no misapprehension of the legal principles as to the Value-Added Tax Act, such as the theory of lawsuit, so there

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 Park Jong-dong (Presiding Justice)