Effect of Article 19(2) of the Enforcement Rule of the Value-Added Tax Act (=Invalidation)

Article 19 (2) of the Enforcement Rule of the Value-Added Tax Act delegates only the method of calculating the constructive purchase tax to be deducted under Article 17 (3) of the same Act as the parent corporation, and the Enforcement Rule of the same Act delegates only the "rate to be multiplied by the value of the agricultural products, etc. which are the basis for calculating the amount to be deducted" to the Enforcement Rule of the same Act, but it cannot be deemed null and void because it limits the object of constructive purchase tax deduction beyond the scope of delegation.

Article 17(3) of the Value-Added Tax Act, Article 62(1) of the Enforcement Decree of the same Act, Article 19(2) of the Enforcement Rule of the same Act

Supreme Court Decision 84Nu539 delivered on March 12, 1985, 84Nu384 delivered on March 26, 1985

Eastern Industrial Company

The Director of the National Tax Service

Seoul High Court Decision 84Gu114 delivered on February 21, 1985

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal by the defendant litigant are examined.

Article 17(3) of the Value-Added Tax Act provides that where the supply of goods manufactured or processed by a manufacturer using agricultural products, livestock products, fishery products, or forest products as their raw materials is subject to the exemption of value-added tax, an amount calculated under the conditions as prescribed by the Presidential Decree may be deducted as the input tax amount. Accordingly, Article 62(1) of the Enforcement Decree of the same Act provides that the amount eligible for deduction as the input tax amount shall be calculated by multiplying the value of the agricultural products, etc. supplied with the exemption of value-added tax by the rate prescribed by the Ordinance of the Ministry of Finance and Economy for each type of business. Article 19(1) of the Enforcement Decree of the same Act, which is the Ordinance of the Ministry of Finance and Economy (amended by Ordinance No. 1609 of May 1, 1984), which is delegated by the Enforcement Decree of the same Act, shall not include any agricultural products, livestock products, fishery products, and forest products imported with the exemption of value-added tax under Article 17(3) of the same Act.

Article 19(2) of the Enforcement Rule of the Value-Added Tax Act delegates only the method of calculating the constructive input tax amount to be deducted under Article 17(3) of the same Act as the parent corporation. Although the Enforcement Rule of the same Act delegates only the "rate to be multiplied by the value of the agricultural products, etc., which are the basis for calculating the amount, to the enforcement rule of the same Act, it shall not be deemed null and void since it limits the constructive input tax amount beyond the scope of delegation, although it shall be delegated to the enforcement rule of the same Act (see Supreme Court Decision 84Nu539 delivered on March 12, 195)

The judgment of the court below to the same purport is just and there is no ground to prosecute the judgment of the court below on the grounds that the above Enforcement Rule of the Value-Added Tax Act is valid, and the appeal is dismissed, and the costs of appeal are assessed against the losing party.

Justices Lee Il-young (Presiding Justice)