Court: ``If nicotine is extracted from the leaves and stems, tobacco...taxes should be paid'' = South Korea

A South Korean court has dismissed a lawsuit seeking to exempt an importer of nicotine concentrate used in e-cigarette liquid from paying 25.2 billion won (approximately 2.8 billion yen) in taxes. The vendor must use the undiluted solution.
Although it was argued that the raw material was tobacco stems and did not qualify as tobacco, the court determined that it was extracted from tobacco leaves and stems.
According to the Korean legal community, the 6th administrative division of the Seoul Administrative Court on the 25th decided to
・In a lawsuit filed by sales company A against the Ministry of Health and Welfare to cancel the taxation of the National Health Promotion Contribution, the court ruled in favor of the Ministry's disposition.
From January 2017 to July 2020, Company A imported e-cigarette liquid using nicotine concentrate made by Company B in China. A
The company made an import declaration that the raw material for the concentrate was extracted from tobacco stalks. According to the current Tobacco Business Law, tobacco is defined as a product made entirely or in part from tobacco leaves. Company A's
If, as claimed, the raw materials were extracted from the large stems from which the leaves grow, then legally it is not tobacco. They are not subject to the national health promotion contribution and individual consumption tax.
However, the Ministry determined that the concentrate imported by Company A was extracted from tobacco leaves and stems, not from large stalks, and therefore fell under the category of tobacco.
In December 2021, a national health promotion contribution of approximately 25.2 billion won was imposed. Company A objected to this and filed an administrative lawsuit. The court upheld the ministry's position. The ministry is the Chinese regulatory authority
It was determined that materials secured from the embassy in China and other sources were more reliable. The court stated, ``Company A has proven to the reasonable satisfaction of the authorities that the raw material contains tobacco leaves.''
"The evidence presented is not sufficient to overturn this, so the punishment imposed on the premise that it was tobacco is legal." First, Company A claimed to have made use of large tobacco stalks, but in reality
It wasn't. The ministry first submitted information about Company C, a Chinese state-funded tobacco processing company from which Company B supplies raw materials. The embassy in China said, ``Company C produces products using raw materials other than tobacco.''
"Nicotine liquid manufactured using tobacco leaf veins as a raw material (produced by Company C) falls under the category of nicotine manufactured using tobacco leaves as a raw material under the Tobacco Excise Tax Act."
. The court stated, ``It appears that the waste part of the tobacco plant, including the leaf veins, was used, but it is difficult to see that only the stem was used.'' ``It would take a very large amount to extract nicotine from the stem alone,'' the court said.
``There is a lack of objective data to show that Chinese companies purchased this amount of stems.'' Furthermore, ``In Company A, whether or not only tobacco stalks were used to manufacture nicotine is
This is an extremely important standard for determining individual consumption taxes, tobacco consumption taxes, national health promotion contributions, etc. However, at the time of import, there was no objective documentation to prove this, and the supplier did not have any information regarding this.
"It's hard to accept that because they didn't take responsibility for what happened," he added.