The effect of the proviso of Article 19 (1) of the Enforcement Rule of the Value-Added Tax Act.

The proviso of Article 19(1) of the Enforcement Rule of the Value-Added Tax Act only delegates the method of calculating the constructive purchase tax amount to be deducted under Article 17(3) of the Act, which is the parent law, to the same Enforcement Decree, and stipulates the "rate to be multiplied by the value of the agricultural products, etc. which are the basis for calculating the amount," which is the basis for the above Enforcement Rule. It goes against the delegation scope of the parent law, and is invalid without the ground of delegation.

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

Supreme Court Decision 84Nu539 Decided March 12, 1985

Seoul High Court Decision 200Na1484 decided May 20

The Director of the Korean Tax Office

Seoul High Court Decision 86Gu53 delivered on June 19, 1986

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal Nos. 1 and 2 are examined.

1. According to the facts established by the judgment below, the plaintiff purchased and processed ginseng exempt from value-added tax under Article 12 (1) 1 of the Value-Added Tax Act, Article 28 (1) 3 of the Enforcement Decree of the Value-Added Tax Act, and Article 10 (1) of the Enforcement Decree of the same Act, and sold them at each time, and paid value-added tax after deducting the constructive input tax amount, the defendant denied constructive input tax deduction under Article 19 (1) of the Enforcement Rule of the same Act (Ordinance of the Ministry of Finance and Economy No. 1609 of May 1, 1984) and imposed the value-added tax

In addition, the judgment of the court below, on its reasoning, concluded that the proviso of Article 19(1) of the above Rule is invalid in violation of Article 17(3) of the Value-Added Tax Act, which is the basis for delegation, and thus, the disposition of this case, which applied the above Rule, was unlawful, and ordered

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 forestry products supplied with the exemption of value-added tax as raw materials, the amount calculated under the conditions as prescribed by the Presidential Decree may be deducted as the input tax amount.

Generally, value-added tax shall be imposed on the supply of goods or services or on the import of goods (Article 1(1) of the Act). Article 17(1) of the Act provides that, in principle, the value-added tax to be paid by an entrepreneur to the Government in order to transfer the tax amount to the final consumer shall be imposed more than the amount of value-added tax (the input tax deduction) on the goods or services supplied by him/her, less the tax amount on the import of goods or services used or to be used for his/her own business (2). In comparison with the provision of paragraph (1) of the above Article, Article 17(3) provides that the so-called input tax shall be levied on the amount calculated by deducting the tax amount on the supply of goods or services used or to be used for his/her own business (the so-called input tax amount) from the amount of value-added tax on the goods or services supplied by him/her (the so-called input tax amount). Accordingly, the final consumer is exempt from the so-called input tax amount due to its inconsistency with the purport of the so-called input tax exemption.

Article 62 (1) of the Enforcement Decree of the same Act provides that the amount calculated by multiplying the value of agricultural products provided with value-added tax exemption by the rate prescribed by the Ordinance of the Ministry of Finance and Economy for each type of business and each type of business shall be deducted pursuant to the provisions of paragraph (3) of the same Article, and the Enforcement Rule of the same Act (Ordinance of the Ministry of Finance and Economy No. 1609, May 1, 1984; hereinafter the same shall apply), which is the Ordinance of the Ministry of Finance

However, Article 19(1) of the above Rule provides that "The rate determined by the Ordinance of the Ministry of Finance and Economy under Article 62 of the Decree shall be 5/105," and that "this shall not apply to the manufacturing industry of goods for which the constructive purchase tax amount of which is not deducted pursuant to the attached Table 3," and this provision delegates only the method of calculating the constructive purchase tax amount to be deducted pursuant to Article 17(3) of the parent law, which is the provision of the law, to the same Enforcement Decree, and the "rate" which is to be multiplied by the value of the agricultural products for which the calculation of the amount is based, shall be defined as the object of the constructive purchase tax deduction within the scope delegated to the Enforcement Rule, and therefore, the proviso of Article 19(1) of the above Rule does not conflict with the delegation scope of the mother law and is enacted without any ground for delegation (see Supreme Court Decision 84Nu539, Mar. 12, 1985).

In addition, Article 88 of the Enforcement Decree of the Value-Added Tax Act provides that "the matters necessary for the enforcement of this Decree shall be prescribed by Presidential Decree)" shall be the basis for delegation. However, this provision is merely a provision that provides for the issuance of an order or enforcement rule necessary for the enforcement of the Value-Added Tax Act or the Enforcement Decree of the same Act, and it cannot be deemed that the enactment of the Act on the Requirements for Taxation is a comprehensive delegation provision.

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

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Dal-sik (Presiding Justice)