The case holding that public utility charges, such as electricity charges, water supply and sewerage charges, etc., received by the commercial management company shall be included in the value-added tax base for the management services.

The case holding that public utility charges, such as electricity charges, water supply and sewerage charges, etc., received by the commercial management company shall be included in the value-added tax base for the management services.

Articles 1, 7 and 13 of the Value-Added Tax Act

[Plaintiff-Appellant] Plaintiff 1 and 10 others (Law Firm Gyeong, Attorneys Park Jong-soo et al., Counsel for plaintiff-appellant)

Shin Jong-sung, Inc.

Head of Central Tax Office

Seoul High Court Decision 2001Nu6274 delivered on November 23, 2001

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

According to the reasoning of the judgment of the court below and the judgment of the court of first instance cited by the court below, the court below acknowledged the facts as stated in its reasoning after compiling the employment evidence. As to the plaintiff's assertion that public utility charges, such as electricity and water supply and drainage fees, among the management fees received from merchants, are merely paid on behalf of merchants, and should be excluded from value-added tax because they are not paid for the provision of the plaintiff's operation and management services, since the plaintiff's collection of public utility charges such as electricity and water supply fees, etc. from merchants, the plaintiff collected a certain amount of management fees calculated in proportion to the store's area, not based on actual usage of electricity, etc., exceptionally, when collecting electricity and water supply fees from restaurants that conduct night business, etc., the court below did not select a method of installing measuring instruments provided by the Korea Electric Power Corporation, etc. to receive electricity and water supply charges from them, and it also determined that the plaintiff's payment of the total amount of electricity and water supply charges, including the total amount of value-added tax, should be included in the tax base of input tax, etc.

In light of the relevant statutes and the records, the above recognition and determination by the court below is just, and there is no error of law such as misunderstanding of legal principles as to the tax base of value-added tax, and on the other hand, it is not different on the ground that management expenses, such as electricity and water rates omitted from reporting, are not leaked, and they were deposited in the bank account under the name of

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 on the bench.

Justices Shin Shin-chul (Presiding Justice)