Whether a customs refund is included in the tax base under Article 13 (1) of the Value-Added Tax Act (affirmative)

It is reasonable to view that the customs refund refunded by the Government under Article 32 (1) of the Customs Act and the Special Act on the Refund of Customs Duties, etc. Levied on Raw Materials for Export to be part of the cost of the raw materials supplied by the exporter to the exporter, which is included in the cost of the raw materials and constitutes the price of the supplied goods. Therefore, it is included in the tax base under

Article 32 of the Customs Act and Article 1 of the Special Act on the Refund of Customs Duties, etc. Levied on Raw Materials for Export

Supreme Court Decision 84Nu264 Delivered on July 23, 1985

Attorney Kim Jong-hee et al., Counsel for the defendant-appellant-appellee

Head of Seogsan Tax Office

Daegu High Court Decision 83Gu45 delivered on April 17, 1984

The judgment below is reversed, and the case is remanded to the Daegu High Court.

The grounds of appeal by the defendant litigant are examined.

1. In manufacturing finished products of raw materials for export on the basis of a local letter of credit opened in the Collaborative Development Co., Ltd., an exporter of which the Plaintiff corporation had completed a separate business registration for raw materials for export on the basis of the local letter of credit opened in the narrow Development, and selling them in the narrow development, the lower court agreed that the sales price of the raw materials for export was not included in the amount determined at the time of the payment of export for the long-term export, and decided as the price at the time of supply by entering only the above price in the local letter of credit. The above customs refund was refunded at the time of the rapid implementation of export, and paid as the price at the time of supply. The lower court confirmed that the customs refund was settled for each export upon the completion of the export, and confirmed that the Plaintiff did not constitute the price for goods supplied between the Plaintiff and the cooperative development, and therefore, the Plaintiff’s factory that is the place of tax payment of value-added tax did not fulfill its duty to report a zero tax base and submit a tax invoice on the above customs refund.

2. However, it is reasonable to view that a business operator who imports raw materials for export manufactures exported goods through a local letter of credit and supplies them to an exporter, and a customs refund which a business operator has received from the government after the export performance pursuant to Article 32(1) of the Customs Act and the Special Act on the Refund of Customs Duties, etc. Levied on Raw Materials for Export is part of the raw materials cost of the exported goods supplied by the exporter to the exporter by the exporter. Thus, it is included in the tax base under Article 13(1) of the Value-Added Tax Act, but it is only applicable to zero tax rate under Article 11(1)1 of the Value-Added Tax Act and Article 24(2) of the Enforcement Decree of the Value-Added Tax Act (see Supreme Court Decision 84Nu264, Jul. 23, 1985). However, since a customs refund paid by the exporter to the exporter after the import performance of the raw materials is not included in the amount indicated in the local letter of credit, the above legal principle cannot be included in the tax base.

Therefore, the lower judgment is reversed, and the case is remanded to the lower court. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Jeong Jong-tae (Presiding Justice)