Examination- Other-2014-0038 ( October 16, 2015)

The fixed packing costs and sales sales of alcoholic beverages are included in the tax base of liquor tax.

The tax base for alcoholic beverages shall not include the amount equivalent to the liquor tax amount for the alcoholic beverages when shipped out of a manufactory, and shall include the container cost and packing expenses, so the tax base for alcoholic beverages is included in the liquor tax base.

Article 21 of the Liquor Tax Act

2015Guhap5083 Revocation of Disposition of Correction Notice of Liquor Tax, etc.

AAAA agricultural partnership

BB Director of the Tax Office

January 22, 2016

February 19, 2016

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The Defendant’s disposition of KRW 00,00,000 for the Plaintiff on July 4, 2011 and KRW 0,000,000 for the education tax and KRW 0,000,00 for the education tax, KRW 00,000 for December 201, and KRW 00,000 for the education tax and KRW 0,000 for the education tax, June 2012, and KRW 00,000 for the education tax and KRW 0,000 for the education tax, KRW 00,000 for the education tax and KRW 0,000 for December 2012, and KRW 0,00 for the education tax and KRW 00,000 for the education tax and KRW 00,00 for the education tax and KRW 00,00 for the education tax and KRW 00,00 for the education tax and KRW 00 for the education tax and KRW 00,000 for each year.

1. Details of the disposition;

A. The Plaintiff is an agricultural partnership that is engaged in a brewing business upon obtaining a license for manufacture of alcoholic beverages on December 9, 1998. The Plaintiff is manufacturing and selling traditional liquor under Article 3(1)-2 of the Liquor Tax Act from the end of March 199 to the present.

B. On May 1, 2014, the Director of the Regional Tax Office issued a tax investigation on value-added tax and liquor tax items from January 1, 2011 to December 31, 2013 against the Plaintiff, and notified on June 2, 2014 that the Plaintiff failed to pay the liquor tax amount of KRW 00,000,000 in total, by omitting a return of tax base for liquor tax.

C. On July 4, 2014, the Defendant issued a disposition to correct and notify the Plaintiff of the total amount of KRW 00,000,000,00,000, respectively, of the liquor tax and education tax on June 201, December 2011, June 201, June 2012, December 2012, December 2012, June 2012, June 2013, June 2013, and December 2013 (hereinafter “each of the instant dispositions”).

D. On October 2, 2014, the Plaintiff filed a request for examination with the Commissioner of the National Tax Service against each of the instant dispositions. On June 16, 2015, the Commissioner of the National Tax Service dismissed the Plaintiff’s request for examination.

[Ground of recognition] Each entry of Gap evidence Nos. 1, 2, 3, 5, 7, and 9, the purport of the whole pleadings, and the fact that there is no dispute

2. The plaintiff's assertion

A. The term “containers or packing costs” under the proviso of Article 21(3) of the Liquor Tax Act refers to all kinds of alcoholic beverages, such as glass, which are not included in the tax base for liquor tax, and the term “price of packages for inserting alcoholic beverages” under Article 21(3)1 of the former Enforcement Decree of the Liquor Tax Act (amended by Presidential Decree No. 2523, Mar. 5, 2014; hereinafter referred to as the “former Liquor Tax Act”) refers to “price of packages for inserting such alcoholic beverages, which are especially manufactured for the purpose of inserting them.” The proviso of Article 21(3) of the former Liquor Tax Act and Article 21(3)1 of the former Enforcement Decree of the Liquor Tax Act are the same as the price of packages for the purpose of packing them. The term “self-disease’s disease” refers to the cost of manufacturing traditional liquor liquor sets and the cost of packing, including the cost of packing and selling traditional liquor sets, which are illegal for the Plaintiff’s imposition of taxes from 201 to 2130.

3. Determination

(a) Facts of recognition;

1) From 2011 to 2013, the Plaintiff manufactured and sold traditional liquor, which is traditional liquor, and put a lider lid in glass bottles, and put it on a close lid. The Plaintiff purchased and assembled a box for futures, put it into a box for futures purposes, put it in a box for futures purposes, put it into a box for futures purposes, and sold a gift set directly to consumers.

2) The Plaintiff reported the ex-factory price for liquor tax and education tax from 2011 to 2013, and included only the packing materials that were spent to close lids in the packaging materials of the ex-factory price in which lids are placed in the glass bottle and put labels on them. The Plaintiff excluded the expenses for the manufacture of the other futures sheet (such as the purchase of a gift box, the packing materials necessary for assembling inside boxes, labor expenses necessary for assembling futures boxes, etc.; hereinafter referred to as “futures gift sheet packing expenses”). In addition, among the ex-factory prices, the sales closings generated from the sales of the futures sheet (hereinafter referred to as “sales sales closings”). Meanwhile, the Plaintiff reported the actual sales price of the value-added tax as its tax base.

3) The sales value of value-added tax and the sales value of liquor tax reported by the Plaintiff for each taxable period from 2011 to 2013 are as follows:

(Omission)

4) The delivery amount of alcoholic beverages under the liquor tax base return filed by the Plaintiff from 2011 to 2013 and the sales price of alcoholic beverages actually sold are as follows:

(Omission)

5) The Plaintiff’s ex-factory price and consumer sales price of the hybrid gift set are as follows:

(Omission)

[Ground of recognition] Evidence No. 9-2, Evidence No. 2, No. 3, and No. 4, the purport of the whole pleadings

B. Determination

1) Whether the gift tax base is excluded from packing expenses and the sales and sales of futures sets

Article 21 (2) of the Liquor Tax Act provides that the tax base for liquor tax on alcoholic beverages other than spirits shall be the price at the time of shipping from a manufactory."The "price at the time of shipping from a manufactory" refers to the price at the time of shipping from a manufactory by usual wholesale quantity and transaction method (hereinafter referred to as "ordinary price"). Article 21 (3) of the same Act provides that the price at the time of shipping from a manufactory shall not include the tax amount for the relevant alcoholic beverage, but shall include the container cost and packing cost, but shall not include the container cost and packing cost prescribed by Presidential Decree. Article 21 (3) of the former Enforcement Decree of the Liquor Tax Act provides that the container cost and packing cost prescribed by Presidential Decree shall be included. (1) The price for the packages of the alcoholic beverage and packages for the purpose of packing them. (2) The goods information shall be shipped out by attaching to the container or packing of the alcoholic beverage and so made electronically to identify the product information.

According to the above legal provisions, the price at the time of shipping alcoholic beverages delivered from a manufactory for the period from 2011 to 2013, which had been in force under the former Enforcement Decree of the Liquor Tax Act, includes the container price and packing expenses, except for the corresponding amount of liquor tax, but excludes only the packing expenses to pack the same.

The Plaintiff asserts that the legislative purport of Article 21(3) of the Liquor Tax Act is to promote the sale of traditional liquor. As such, the Plaintiff’s distinction between traditional liquor and other alcoholic beverages from the traditional liquor and the price of packages for the purpose of inserting alcoholic beverages under Article 21(3) of the former Enforcement Decree of the Liquor Tax Act shall include the cost of packing traditional liquor gift sets. However, in light of the following points, the Plaintiff’s argument is merely a arbitrary interpretation. Accordingly, the Plaintiff’s further package cost is included in the shipping price which serves as the liquor tax base.

① Under the principle of no taxation without law, the requirements for taxation, non-taxation, and tax laws and regulations shall be strictly interpreted in accordance with the text of the law, barring any special circumstances, and shall not be extensively interpreted or analogically interpreted without reasonable grounds. Article 21(3) of the former Enforcement Decree of the Liquor Tax Act limits the cost of containers and packaging excluded from the tax base to the “price of packages to pack one’s own disease clearly in the legal text,” and there is no reasonable reason to interpret the said provision as the example provision for traditional liquor containers and packaging expenses.

② Article 21(3) of the former Enforcement Decree of the Liquor Tax Act was amended on March 5, 2014, and the amended Enforcement Decree of the Liquor Tax Act added "all container prices and packing expenses used for traditional liquor" to the cost of container or packing excluded from factory price. Article 3 of the Addenda of the amended Enforcement Decree of the Liquor Tax Act provides that all container prices and packing expenses used for traditional liquor shall be applied from factory after the enforcement of the amended provision. In the opposite interpretation of the Enforcement Decree of the amended Liquor Tax Act, it shall be interpreted that all container prices and packing expenses used for traditional liquor under Article 21(3) of the former Enforcement Decree of the Liquor Tax Act shall not be included in the cost of container or packing used for traditional liquor (Article 21(3) of the former Enforcement Decree of the Liquor Tax Act, as argued by the Defendant, is insufficient to promote the sale of traditional liquor, and even if the amended provision was amended as above, such purport alone does not apply to Article 21(3) of the amended Enforcement Decree of the Liquor Tax Act).

If the Plaintiff construed that gift tax base includes profits from sales of gift sets, i.e., futures sales sales, the Plaintiff asserts that discriminatory interpretation of discriminating against alcoholic beverage manufacturers who sell alcoholic beverages from a manufactory without direct sales outlet compared to those who hold a direct sales outlet is contrary to tax equality. However, as seen earlier, the “price at the time of withdrawal” refers to the price at which alcoholic beverage manufacturers manufacture and pack and deliver alcoholic beverages, such as the Plaintiff, and then deliver alcoholic beverages to a direct sales outlet at the price calculated by adding sales profits to that at the time of sales. On the contrary, the liquor tax base is the total liquor tax base. On the contrary, if a alcoholic beverage manufacturer manufactures alcoholic beverages other than a set and packages alcoholic beverages to a direct sales outlet and sells alcoholic beverages in a direct sales outlet, the liquor tax base is the same as the ex-factory price, and there is no discrimination against the principle of tax equality. Accordingly, the Plaintiff’s gift tax base also includes the Plaintiff’s gift tax base.

2) Whether the principle of proportionality is violated

The Plaintiff’s tax base by arbitrarily interpreting the Liquor Tax Act from 2011 to 2013

Tax has been paid by reporting the ex-factory price at the ex-factory price excluding futures sheet packing expenses and sales closing, and the amount of tax has been paid as a result, which accounts for about 60-70% of the futures sheet ex-factory price. The dispositions that correct factual relations through a tax investigation and correct the erroneous amount of tax are consistent with the tax justice and need to achieve the public interest. Considering such fact, each of the dispositions of this case that the Defendant notified the Plaintiff that the unpaid tax amount was corrected and notified to the Plaintiff cannot be deemed to violate the principle of proportionality.

C. Sub-committee

Each disposition of this case, which corrected and notified liquor tax and education tax, including the traditional liquor gift set packing costs and sales closing costs, is legitimate in the tax base, and the plaintiff's assertion is without merit.

4. Conclusion

The plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.