[Case Number] High Court Decision 2014J 2121 (Law No. 03, 2014)

[C]Supplementary Rule ](Type of Decision ]

[Determination] It does not constitute a funeral service, and it is judged that whether food is provided to literature visitors, etc. at a funeral hall does not constitute a funeral service, and it is difficult to view it as a supply essential for funeral services exempt from the value-added tax as a matter of choice of resident stay.

[Related Acts] Article 12 of the Value-Added Tax Act

[Reference Decision] High Court Decision 2014Na0417

The appeal is dismissed.

1. Summary of disposition;

A. On July 31, 201, the applicant firm operating OO after opening a business, provided food to the visitors along with the funeral services exempt from value-added tax, and reported value-added tax on the basis that the food is subject to value-added tax;

The funeral home provision service is an incidental service of funeral home subject to value-added tax exemption and filed a claim for correction on the ground of OO that it is subject to value-added tax exemption, as shown in the attached Table. In addition, it filed a claim for correction for refund of OO for the total amount of 2(Scheduled) portion and 2(Scheduled) portion(Scheduled) portion in 2013.

B. On October 30, 2013, the agency rendered a request for correction of the requesting corporation on the ground that theOO exempted the value-added tax on food services provided in addition to funeral services.

C. The applicant filed an appeal on April 9, 2014.

2. Opinion of the requesting corporation and the disposition agency;

A. The claimant corporation's assertion

The funeral home operated by the requesting corporation provides food services together with the funeral service, and after inquiring the tax office about the service, it is subject to value-added tax because the service is not the funeral service, and the same company reports the value-added tax in practice and reports it to be subject to value-added tax. However, whether to exempt the value-added tax on the supply of goods or services that are ordinarily deemed to be supplied for the main transaction in light of transaction practice, is subject to value-added tax exemption on the supply of goods or services, which are the main transaction, and the food services ordinarily supplied for the funeral service becomes known that it is an OO subject to value-added tax exemption. Accordingly, the value-added tax amount returned and paid on the basis of the erroneous interpretation of the tax office that the food services are subject

(b) Opinions of disposition agencies;

After October 30, 2013, the binding force of the judgment presented by the applicant corporation is limited to the same party and the parties are not bound by the administrative disposition to the other person, and the OO issued an established rule that accepts the intent of the OO's judicial precedents from supply to October 30, 2013 in order to prevent the legal stability and the confusion of national administration, and the disposition that refuses the applicant corporation's request for correction in accordance with the established rule of the above-mentioned institution is legitimate.

In addition, the OO cases presented by the requesting corporation do not necessarily accompany the food services, but rather provide food in many funeral parlors through the food services, and are judged to mispercing the reality that food service providers separately exist, disregarding the fact that there is a separate food service provider, and, as a result of the application of the above decision, it cannot be found at all that the food supply unit price of the funeral hall is reduced or should be reduced, and rather, the funeral hall business operator does not return the food to residents, and it is reasonable to deny the refund of value-added tax even when considering these aspects, it is reasonable to deny the refund of value-added tax.

3. Hearing and determination

A. Key issue

Whether the food service provided at a funeral hall is naturally incidental to the funeral service exempt from value-added tax.

B. Relevant statutes

(1) Value-Added Tax Act (Amended by Act No. 11873, Jun. 7, 2013)

Article 1 [Taxable Objects] (1) Value-added Tax shall be imposed on the following transactions:

1. Supply of goods or services; and

Article 7 (Supply of Services) (1) The supply of services shall be either the supply of services or having others use the goods, facilities or rights, on all contractual or legal grounds.

Article 12 [Exemption from Taxation] (1) The supply of any of the following goods or services shall be exempted from value-added tax:

5. Medical and health services (including veterinary services) prescribed by Presidential Decree, and blood;

(3) The supply of goods or services inevitably annexed to the supply of goods or services exempted under paragraph (1) shall be deemed included in such supply of goods or services exempted from taxation.

(2) Article 29 of the Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 24638, Jun. 28, 2013) (the scope of medical and health services) provides medical and health services under Article 12(1)5 of the Act (including those provided by a person who has opened a medical institution or a veterinary hospital under the Medical Service Act or the Veterinarians Act) as follows:

6. Funeral services provided by funeral service providers;

C. Facts and determination

(1) According to a claim for correction of value-added tax submitted by a disposition agency and an applicant corporation, a review report on a request for correction (see, e.g., March 24, 2014) and a notice of rejection of a request for correction, etc., the applicant corporation filed a request for correction for refund of value-added tax on the grounds that the food services provided to the visitors are corrected from taxation to tax exemption. On March 24, 2014, the disposition authority rejected the request for correction on the grounds that the food services provided to the visitors are corrected from taxation to tax exemption. On March 24, 2014, the funeral hall business operator provided food services to the door visitors who visited the funeral hall is included in the services that are naturally exempt from tax exemption due to the supply of services that are necessarily attached to the supply of exempted services, but this is deemed to apply from the portion supplied after October

(2) Comprehensively taking account of the above facts and relevant statutes, Article 12(1)5 and (3) of the Value-Added Tax Act and Article 29 subparag. 6 of the Enforcement Decree of the same Act provide that the supply of food and drink services provided by the funeral business operator as medical and health services and the supply of goods or funeral services essential thereto shall be exempted from value-added tax. The supply of food and drink services does not constitute funeral services (such as storage, chlouding, storage, burial, and installation of an empty house to have for example in the process, lease of funeral home for the deceased, etc.). In full view of the fact that the issue of whether food and drink are supplied from funeral homes is a resident choice and it is difficult to view that the supply of food to the door, etc. is necessarily incidental to the funeral service exempt from value-added tax, it is difficult to view that the applicant corporation ordinarily provides food and drink services during the taxable period from February 2, 201 through December 2 (Scheduled) of 2013.

Therefore, it is judged that there is no error in the disposition that the disposition agency refused the request for correction of the requesting corporation.

4. Conclusion

This case shall be decided as ordered in accordance with Articles 81 and 65 (1) 2 of the Framework Act on National Taxes because the petition for adjudication has no merit as a result of the review.