Port Integrated Steel Co., Ltd. (Attorneys Kim Jong-jin et al., Counsel for the plaintiff-appellant)

Head of the Tax Office

June 27, 1990

The plaintiff's claim is dismissed.

Litigation costs shall be borne by the plaintiff.

The imposition of value-added tax of KRW 328,682,40 on January 7, 1989 by the defendant against the plaintiff on January 7, 1989 shall be revoked.

The judgment that the lawsuit costs shall be borne by the defendant

1. Details of taxation; and

The plaintiff shall bear the total construction cost of the above 1, 6, 7, 9 through 12, 16, 19 (the evidence No. 10 shall be proved No. 2, the evidence No. 12 shall be the same as the evidence No. 3), No. 8, 15 evidence No. 1, No. 10 and 14 shall be reported to the State for the above 9-day construction work, and the plaintiff shall be exempted from the total construction cost of the above 10-day construction work for the above 19-day construction work for the above 19-day construction work for the above 9-day construction work for the above 10-day construction work, and the remaining construction cost No. 20-day construction work for the Ministry of Construction and Transportation shall be notified to the Minister of Construction and Transportation for the above 19-day construction work for the same 9-day construction work for the above 9-day construction work for the above 9-day construction work for the above 9-day construction work for the above 19-year construction work for the plaintiff.

2. Whether the instant taxation disposition is lawful

(1) The Plaintiff’s instant harbor facilities are not subject to the imposition of value-added tax, since it reverted to the State at the same time with the notification of completion of construction under Article 21-5(4) of the Industrial Base Development Promotion Act and Article 12 of the Harbor Act, and the State original acquisition thereof is not subject to the Plaintiff’s supply of goods subject to the imposition of value-added tax, and therefore there is no room for establishing a quid pro quo relationship with the Plaintiff’s acquisition of right of free use under the premise that the Plaintiff’s act of donation was not subject to the imposition of value-added tax. (2) The Plaintiff’s supplier of goods or services independently from the business under Article 2(1) of the Value-Added Tax Act continues to be in the form of business to create value-added value-added tax, and thus, the Plaintiff’s act of donation does not constitute a taxpayer under the Value-Added Tax Act, and thus, the Plaintiff’s provision of goods or services is not subject to the imposition of value-added tax on behalf of the State.

Therefore, the plaintiff's act of supplying goods and services, which is a public facility newly established by the execution of the plaintiff's industrial base development project, is nothing more than 1 of Article 21-5 (2) and (4) of the Industrial Base Development Promotion Act, and it cannot be deemed that the ownership of the port facility of this case belongs to the State or a local government, which is subject to value-added tax, because it cannot be deemed that the plaintiff's act of supplying goods and services belongs to the State within the scope of the supply of goods and services, as stated in the relevant provisions of the Enforcement Decree of the Value-Added Tax Act (Article 1 (1) 1 of the Act), since the plaintiff's act of supplying goods and services can only be viewed as a non-taxable act of supplying goods and services within the extent of the value-added tax imposed on the government (Article 7 (1) 1 of the Value-Added Tax Act). The plaintiff's act of supplying goods and services constitutes a non-taxable act of supplying goods and services within the scope of the construction cost of the construction project (Article 7 (1) of the Act).

3. Conclusion

Therefore, since the taxation disposition of this case is legitimate, the plaintiff's claim of this case seeking revocation is dismissed without merit, and the costs of lawsuit are assessed against the losing party. It is so decided as per Disposition.

July 25, 1990

Judges Lee Jae-soo (Presiding Judge)