Whether Article 19(2) of the former Enforcement Rule of the Value-Added Tax Act (amended by Ordinance of the Ministry of Strategy and Finance No. 1609 of May 1, 1984) is effective (negative)

Article 19 (2) of the former Enforcement Rule of the Value-Added Tax Act (amended by Ordinance of the Ministry of Government Administration and Home Affairs No. 1609 of May 1, 1984) delegates only the method of calculating the constructive purchase tax amount to be deducted under Article 17 (3) of the Value-Added Tax Act, which is its mother law provision, to the Enforcement Decree, and the "ratio" which is to be multiplied by the value of agricultural products, etc., which are the basis for calculating the amount to be deducted under the Enforcement Rule, is a provision of the constructive purchase tax amount to be deducted outside the scope of delegation by the mother law

Article 17(3) of the Value-Added Tax Act, Article 62(1) of the Enforcement Decree of the Value-Added Tax Act, Article 19(2) of the former Enforcement Rule of the Value-Added Tax Act (amended by Ordinance of the Ministry of Strategy and Finance No. 1609

Supreme Court Decision 84Nu538 delivered on March 12, 1985 (dong) 84Nu5550 delivered on March 12, 1985

Plaintiff 1 and three others

Racing Head of the Tax Office

Daegu High Court Decision 84Gu52 delivered on June 28, 1984

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

The grounds of appeal are examined.

1. According to the facts established by the judgment below, the plaintiffs, who are those who run the business of manufacturing and selling the rice milk using rice as the raw materials for each business establishment, were supplied with the Domination process of imported rice by local governments and exempted from value-added tax pursuant to Article 12 (1) 7 of the Value-Added Tax Act, and manufacture and sell the rice oil as raw materials, and voluntarily paid value-added tax after deducting the constructive purchase tax amount from the constructive purchase tax, the defendant denied the constructive purchase tax deduction pursuant to Article 19 (2) of the Enforcement Decree of the above Act and imposed the value-added tax in this case.

In addition, the judgment of the court below on its reasoning, Article 19 (2) of the above Rule is invalid in violation of Article 17 (3) of the Value-Added Tax Act, which is the applicable law to delegation, and therefore, it concluded that the disposition of this case was unlawful by applying the above Rule and ordered its revocation.

2. Article 17 (3) of the Value-Added Tax Act provides for the so-called constructive input tax deduction, on the basis that, in case where an entrepreneur who runs the manufacturing business imposes a tax on the goods manufactured or processed with agricultural, livestock, fishery, or forest products supplied with the goods exempted from value-added tax as raw materials, the amount calculated as prescribed by the Presidential Decree may be deducted as the input tax amount.

Generally, value-added tax is imposed on the supply of goods or services or on the import of goods (Article 1(1) of the Act). In order to transfer this tax amount to the final consumer, Article 17(1) of the Act provides for the so-called input tax deduction, in principle, that the amount of value-added tax to be paid by an entrepreneur to the Government, is the amount obtained by deducting (1) the tax amount on the supply of goods or services used or to be used for his/her own business from (2) the tax amount on the supply of goods or services used or to be used for his/her own business.

In comparison with the above Paragraph 1, if an entrepreneur who received an exemption from value-added tax and received an entire payment of the output tax in relation to the supply of goods manufactured or processed by using the agricultural products as the raw materials, etc. (the input tax deduction) is more applicable than the case where the entrepreneur receives an exemption from value-added tax (the input tax deduction from time) and the final consumer purchases high-priced goods added to the value-added tax (the input tax amount) originally exempted from value-added tax, and thus, if so, it is interpreted as a provision for the deduction of the so-called constructive input tax amount because it becomes unreasonable result contrary to the purport of the exemption from value-added tax in supplying the agricultural products, etc.

Under this provision, Article 62(1) of the Enforcement Decree of the same Act provides that the amount calculated by multiplying the value of agricultural products, etc. supplied with the exemption of value-added tax shall be deducted by the rate prescribed by the Ordinance of the Ministry of Finance and Economy for each type of business and each type of business, and Article 19(1) of the Enforcement Decree of the same Act (amended by Ordinance of the Ministry of Finance and Economy No. 1609 of May 1, 1984), which is the Ministry of Finance and Economy, shall be 110-10 (5/105 in cases where the agricultural products, livestock products, fishery products, and forest products are offered with the exemption of value-added tax under Article 17(3) of the same Act, shall not be included in the amount imported with the exemption of value-added tax on the agricultural products, etc. provided that the same provision does not apply to the cases of smuggling, smuggling, salop and receipt, and that only the method of calculating the purchase tax amount to be deducted under Article 17(3) of the same Act, which does not violate the Enforcement Rule.

The theory of lawsuit argues that Article 19 (2) of the Enforcement Rule of the above Act provides the deduction rate as "Decree", but it does not mean that the language of Article 19 (1) and (2) of the above Enforcement Rule provides the deduction rate as the language of Article 19 (2) of the above Enforcement Rule, and if the domestic affairs deduction rate is prescribed as zero, no input tax amount to be deducted, which results in the absence of an input tax amount to be deducted, and it cannot be deemed null

In this regard, the court below's decision that the disposition of this case was unlawful is just and there is no different opinion because there is a misapprehension of legal principles such as the theory of lawsuit.

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 So-young (Presiding Justice) Lee So-young (Presiding Justice) Lee So-young (Presiding Justice) Lee So-young, Lee So-young, Kim So-young, Lee So-young, Kim So-young, Kim So-young, Kim Jong