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  • Interpretation
  • No.257
  • Date
  • 1990/04/06
  • Issue
    • Is the provision of the Rules Governing the Levy of Taxes on Commodity, which has treated imported compressors used in the assembly of vehicular air conditioners/heaters as being in the category of air conditioners and levied commodity tax accordingly, unconstitutional?
  • Holding
    •        The former Article 4, Paragraph 1, Subparagraph 16, of the Commodity Tax Act was intended to levy commodity tax on “any and all air conditioners or heaters that regulate temperature by means of electric power.”  Article 103-1, Paragraph 2, Subparagraph 6, of the Rules Governing the Levy of Taxes on Commodity, as amended and promulgated by the Executive Yuan on July 21, 1975, provides that imported compressors used in the assembly of vehicular air conditioners are treated as being in the category of air conditioners and commodity tax should be levied accordingly.  Undoubtedly, the term used therein is not entirely consistent with the provision of the Commodity Tax Act first mentioned above.  However, the said Regulations consider that compressors of the kind are not only the primary machine parts of air conditioners/heaters, but are also intended for use in the assembly of vehicular air conditioners/heaters only, that they still fall in the category of electrical appliances as provided for under said Act, and that the relevant taxpayers are not liable for additional tax burden because no more commodity tax would be levied upon completion of such air conditioners/heaters.  The aforesaid Regulations have treated imported compressors used in the assembly of vehicular air conditioners/heaters as being in the category of air conditioners and levied commodity tax accordingly for the purposes of simplifying the collection procedure, preventing tax evasion and maintaining equality of taxation, which does not contradict Article 19 of the Constitution.
  • Reasoning
    •        The former Article 4, Paragraph 1, Subparagraph 16, of the Commodity Tax Act was intended to levy commodity tax on “any and all air conditioners or heaters that regulate temperature by means of electric power.”  In addition, Articles 12 and 16 thereof provide, respectively, “The commodity tax shall be levied on any and all goods imported from abroad that are subject to such commodity tax, the taxable amount of which is determined based on the valuation made by the Customs, plus any import duties levied thereon,” and “[The commodity tax] for the goods imported from abroad shall be levied by the Customs at the same time customs duties are levied.” Pursuant to Article 22 of said Act, as well as Article 103-1, Paragraph 2, Subparagraph 6, of the Rules Governing the Levy of Taxes on Commodity, as amended and promulgated by the Executive Yuan on July 21, 1975, which provides, “ In respect of the imported compressors used in the assembly of vehicular air conditioners, the commodity tax shall be levied and the duty-paying value shall be determined by multiplying the aggregate amount of the duty-paying value of customs duty as determined by the Customs plus other import duties by four.  In addition, an aluminum certificate of inspection for commodity tax shall be issued thereafter.” The foregoing is supplementary to the provision related to the conversion of commodity tax for the imported compressors used in the assembly of vehicular air conditioners/heaters into that for air conditioners/heaters.  Undoubtedly, the term used therein is not entirely consistent with the provision of the Commodity Tax Act first above mentioned.  However, the said Regulations consider the nature of such compressors as unusual in that compressors of the kind are not only the primary machine parts for air conditioners/heaters, but also intended for use in the assembly of vehicular air conditioners/heaters only, that they still fall in the category of electrical appliances as provided for under the former Article 4, Paragraph 1, Subparagraph 16(3), of said Act. Furthermore, the various components of a vehicular air conditioner/heater are not in one piece and in one fixed form while in an automobile.  If no commodity tax for vehicular air conditioners/heaters is levied on such compressors, it would be difficult to impose commodity tax on such various machine parts and components for vehicular air conditioners/heaters as are imported by dividing up the whole into separate parts.  Besides, the other parts and components for vehicular air conditioners/heaters that are imported concurrently with, or prior or subsequent to, such compressors or the air conditioners/heaters whose assembly has been completed would not be subject to additional commodity tax. Since the original commodity tax is levied on air conditioners/heaters, which is clearly prescribed by law, and no additional taxable item is added or original tax rate is changed, the relevant taxpayers are not liable for any additional tax burden.  The aforesaid Regulations are also for the purposes of simplifying the collection procedure, preventing tax evasion and maintaining equality of taxation, and hence are not in conflict with Article 19 of the Constitution. 
      
    • *Translated by Vincent C. Kuan
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