(a) Whether a customs refund is included in the tax base under Article 13(1) of the Value-Added Tax Act (affirmative);

(b) Estimated and final return of value-added tax and propriety of submission of tax invoices for transactions at the main office and separately registered business places;

A. It is reasonable to view that a customs refund that was refunded by the government for raw materials for export pursuant to Article 32(1) of the Customs Act and the Act on Special Cases concerning the Refund of Customs Duties, etc. Levied on Raw Materials for Export to be returned to an entrepreneur is part of the cost of the raw materials supplied by an exporter and constitutes the price of the supplied goods. Therefore, it is included in

(b) Where a tax invoice is issued in the name of the head office with respect to customs refunds on the sales of a place of business whose business has been registered separately from the head office, and the said head office submits a scheduled tax base and final tax return and a tax invoice to the head office having jurisdiction over the said head office, it shall not be deemed that the said customs refunds have fulfilled the obligation to

(a) Article 32 of the Customs Act; Article 1 of the Special Act on the Refund of Customs Duties, etc. Levied on Raw Materials for Export; Article 13(b) of the Value-Added Tax Act; Articles 4, 5, 16, 20 of the Value-Added Tax Act; Articles 64 and 65 of the Enforcement Decree of the Value

B. Supreme Court Decision 84Nu272 delivered on July 24, 1984

Attorney Kim Jong-hee et al., Counsel for the defendant-appellant

Head of North Busan District Tax Office

Daegu High Court Decision 83Gu44 delivered on March 15, 1984

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

The grounds of appeal by the Plaintiff’s attorney are examined.

1. It is reasonable to view that customs duties imposed upon an enterpriser who imports raw materials for export made the exported goods through a local letter of credit transaction and supplied them to the exporter, and the customs duties imposed upon the exporter upon the importer upon the importer in accordance with Article 32(1) of the Customs Act and the provisions of Article 32(1) of the Act on Special Cases concerning the Refund of Customs Duties, etc. Levied on Raw Materials for Export, etc. for Export, are part of the raw materials supplied by the exporter to the exporter and thus, are included in the raw materials cost of the exported goods supplied by the exporter and constitutes the price for the supplied goods. Accordingly, it is included in the tax base provided in Article 13(1) of the Value-Added Tax Act. However, the zero tax rate is only applied

According to the decision of the court below, the plaintiff paid customs duties to the above exporter and imported the raw materials of salary products to be supplied to the above exporter by a local letter of credit opened by the non-party LAW Co., Ltd., and supplied them to the above exporter, and the above exporter supplied them to the plaintiff after the plaintiff performed the export and paid the customs duties paid at the time of import of raw materials by the government pursuant to Article 32 (1) of the Customs Act and the Act on Special Cases Concerning the Refund of Customs Duties, etc. Levied on Raw Materials for Export. Thus, the customs refund is included in the tax base under Article 13 (1) of the Value-Added Tax Act in accordance with the above legal principles. Since the customs refund is not included in the large amount of entry in the local letter of credit, it was impossible to determine in advance the amount of customs duties to be refunded after the opening of the local letter of credit. Thus, the above customs refund cannot be the basis for

The judgment of the court below to the same purport is just and there is no error in the misapprehension of the legal principles, such as theory of lawsuit. In addition, Article 82-294 of the Korea Customs Service Notice on Customs Refunds that Article 82-294 of the Korea Customs Service Notice on Customs Refunds stipulates the applicant as an exporter who is not an importer, is a natural provision in light of the above legal principles that the customs refund constitutes part of the price for the goods supplied, and as such, the customs refund should be paid to the importer who has paid the customs refund as a matter

2. Under the Value-Added Tax Act and the Enforcement Decree of the same Act, a person commencing a business independently supplying goods or services shall make a business registration at each workplace (Article 5 of the same Act); value-added tax, in principle, shall be paid at each workplace (Article 4 of the same Act); and a tax invoice issued at the time of supplying goods or services shall contain the registration number, name or title, etc. of the entrepreneur who provides the goods or services (Article 16 of the same Act). (Article 16 of the same Act) The scheduled value-added tax and final tax return shall be filed with the head of each workplace, stating the entrepreneur’s personal information, the payable tax amount, and the basis for calculation thereof, etc. (Articles 64(2) and 65(1) of the Enforcement Decree of the same Act, which shall be submitted along with the scheduled value-added tax and final tax return (Article 20 of the same Act). If the Plaintiff Company, as determined by the court below, separately from its head office, issued the final tax invoice and final tax invoice under its name to the Plaintiff and its head office’s.

The judgment below to the same purport is just, and it is not erroneous in the misapprehension of legal principles, such as the theory of lawsuit.

3. Ultimately, 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 Yoon Il-young (Presiding Justice) Gangwon-young Kim Young-ju