tax cases - vat.docx
TRANSCRIPT
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TAX CASES VAT
ABAKADA GURO PARTY LIST VS EXECUTIVE SECRETARY
Motion for Reconsideration by petitioners Association of Pilipinas
Shell Dealers, Inc. in G.R. No. 16861, on the !ro"nds that#
I. $his %onorable &o"rt erred in "pholdin! the constit"tionality of
Section 11'(A)(*) and Section 11'(+) of the NIR&, as aended
by the -A$ /a0, iposin! liitations on the ao"nt of inp"t
A$ that ay be claied as a credit a!ainst o"tp"t A$, as 0ell
as Section 11(&) of the NIR&, as aended by the -A$ /a0,
re"irin! the !o2ernent or any of its instr"entalities to
0ithhold a 34 5nal 0ithholdin! A$ on their !ross payents on
p"rchases of !oods and ser2ices, and 5ndin! that the "estioned
pro2isions#
A. are not arbitrary, oppressi2e and cons5scatory as to ao"nt
to a depri2ation of property 0itho"t d"e process of la0 in2iolation of Article III, Section 1 of the 187 Philippine
&onstit"tion
+. do not 2iolate the e"al protection cla"se prescribed "nder
Article III, Section 1 of the 187 Philippine &onstit"tion and
&. apply "niforly to all those belon!in! to the sae class and
do not 2iolate Article I, Section *8(1) of the 187 Philippine
&onstit"tion.
II. $his %onorable &o"rt erred in "pholdin! the constit"tionality
of Section 11'(+) of the NIR&, as aended by the -A$ /a0,
iposin! a liitation on the ao"nt of inp"t A$ that ay be
claied as a credit a!ainst o"tp"t A$ not0ithstandin! the
5ndin! that the ta9 is not pro!ressi2e as e9horted by Article I,
Section *8(1) of the 187 Philippine &onstit"tion.
Petitioner Garcia reply#
the no pass-onprovision for the sale of service for power generation
because both the Senate and the House were in agreement that the
VAT burden for the sale of such service shall not be passed on to theend-consumer. As to the no pass-onprovision for sale of petroleum
products, petitioners argue that the fact that the presence of such
a no pass-onprovision in the House version and the absence thereof
in the Senate Bill means there is no conflict because "a House
provision cannot be in conflict with something that does not eist.
&o"rt:s R"lin!#
It is incorrect to concl"de that there is no clash bet0een
t0o opposin! forces 0ith re!ard to the no pass-
onpro2ision for A$ on the sale of petrole" prod"cts
erely beca"se s"ch pro2ision e9ists in the %o"se2ersion 0hile it is absent in the Senate 2ersion. It is
precisely the absence of s"ch pro2ision in the Senate bill
and the presence thereof in the %o"se bills that ca"ses
the con;ict. $he absence of the pro2ision in the Senate
bill sho0s the Senate:s disa!reeent to the intention of
the %o"se of Representati2es acons"er.
OTHER TAX RELATED ISSUES IN THE CASE
As to the other National Internal Re2en"e &ode (NIR&)
pro2isions fo"nd in Senate +ill No. 13', i.e., percenta!e
ta9es, franchise ta9es, a"seent and e9cise ta9es,
these pro2isions are needed so as to c"shion the e=ects
of A$ on cons"ers. As 0e said in o"r decision, certain
!oods and ser2ices 0hich 0ere s"b?ect to percenta!e ta9and e9cise ta9 0o"ld no lon!er be A$ e9ept, th"s, the
cons"er 0o"ld be b"rdened ore as they 0o"ld be
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payin! the A$ in addition to these ta9es. $h"s, there is
a need to aend these sections to soften the ipact of
A$. $he &o"rt 5nds no reason to re2erse the earlier
r"lin! that the Senate introd"ced aendents that are
!erane to the s"b?ect atter and p"rposes of the
ho"se bills
Petitioners also reiterate their ar!"ent that the inp"t
ta9 is a property or a property ri!ht. In the sae breath,
the &o"rt reiterates its 5ndin! that it is not a property ora property ri!ht, and a A$>re!istered person:s
entitleent to the creditable inp"t ta9 is a ere
stat"tory pri2ile!e.
$he ri!ht to credit inp"t ta9 as a!ainst the o"tp"t ta9 is
clearly a pri2ile!e created by la0, a pri2ile!e that also
the la0 can liit. It sho"ld be stressed that a person
has no 2ested ri!ht in stat"tory pri2ile!es.
+"t, as the state is free to distrib"te the b"rden of a ta9
0itho"t re!ard to the partic"lar p"rpose for 0hich it is
to be "sed, there is no 0arrant in the &onstit"tion forsettin! the ta9 aside beca"se a co"rt thinA$ /a0 is ascertainable 0ithatheatical certainty.o As I aintained in y Dissenting Opinion, a ta9
eas"re ay be 2alidly challen!ed and stricA$ /a0, the State reco!niCes that the persons
0ho pre>pay that inp"t A$, "s"ally the dealers or
retailers, are not the persons 0ho are liable to payfor the ta9. $he A$ syste, as ipleented
thro"!h the pre2io"s A$ la0 and the ne0 ->A$
/a0, s"arely holds the end cons"er as the
ta9payer liable to sho"lder the inp"t A$.
Nonetheless, "nder the echanis foisted in the
ne0 ->A$ /a0, the dealer or retailer 0ho pre>pays
the inp"t A$ is 2irt"ally precl"ded fro reco2erin!
the pre>paid inp"t A$, since the la0 only allo0s
s"ch reco2ery "pon the cessation of the b"siness.
Indeed, the only 0ay said class of ta9payers canreco2er this pre>paid inp"t A$ 0as if it 0ere to
cease operations at the end of e2ery "arter.o It is not tr"e then that the inp"t A$ prepaid for the 5rst
"arter can be reco2ered in the second, third or fo"rth
"arter of that year, or at any tie in the ne9t year for
that atter since the ao"nt of prepaid inp"t A$
acc""lates 0ith e2ery s"cceedin! prepayent of inp"t
A$. Moreo2er, the acc""lation of the prepaid inp"t A$
diinishes the act"al 2al"e of the ref"ndable ao"nts,
considerin! the established principle of Btie>2al"e ofoneyB, as e9plained in y Dissenting Opinion.
COMMISSIONER OF INTERNAL REVENUE vs. SEAGATE
TECHNOLOGY (PHILIPPINES)
+"siness copanies re!istered in and operatin! fro
the Special -conoic one in Na!a, &eb" E liadded ta9es or A$.
Altho"!h e9port sales are not deeede9ept transactions, they are nonetheless Cero>rated.
%ence, in the present case, the distinction bet0een
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e9ept entitiesand e9ept transactionshas little
si!ni5cance, beca"se the net res"lt is that the
ta9payer is not liable for the A$. Respondent, a A$>
re!istered enterprise, has coplied 0ith all re"isites
for claiin! a ta9 ref"nd of or credit for the inp"t A$ it
paid on capital !oods it p"rchased. $h"s, the &o"rt of
$a9 Appeals and the &o"rt of Appeals did not err in
r"lin! that it is entitled to s"ch ref"nd or credit.
FRespondent is a resident forei!n corporation d"lyre!istered 0ith the Sec"rities and -9chan!e
&oission to do b"siness in the Philippines, 0ith
principal oHce address at the ne0 &eb" $o0nship @ne,
Special -conoic one, +aran!ay &antao>an, Na!a,
&eb"
*. FPetitioner is s"ed in his oHcial capacity, ha2in!
been d"ly appointed and epo0ered to perfor the
d"ties of his oHce, incl"din!, aon! others, the d"ty
to act and appro2e clais for ref"nd or ta9 credit
. FRespondent is re!istered 0ith the Philippine -9port
one A"thority (P-A) and has been iss"ed P-A
&erti5cate No. 7>' p"rs"ant to Presidential Decree
No. 66, as aended, to en!a!e in the an"fact"re of
recordin! coponents priarily "sed in cop"ters for
e9port. S"ch re!istration 0as ade on 6 "ne 17
-ADSIa
. FRespondent is A$ F(al"e Added $a9)>re!isteredentity as e2idenced by A$ Re!istration &erti5cation
No. 7>'8>'''6''> iss"ed on * April 17
3. A$ ret"rns for the period 1 April 18 to ' "ne
1 ha2e been 5led by Frespondent
6. An adinistrati2e clai for ref"nd of A$ inp"t ta9es
in the ao"nt of P*8,6,**6.8 0ith s"pportin!
doc"ents (incl"si2e of the P1*,*67,81.' A$ inp"t
ta9es s"b?ect of this Petition for Re2ie0), 0as 5led on @ctober 1 0ith Re2en"e District @Hce No. 8,
$alisay &eb"
7. No 5nal action has been recei2ed by Frespondent
fro Fpetitioner on FrespondentJs clai for A$
ref"nd.
&lais for ta9 ref"ndKta9 credit are constr"ed in
Jstrictissimi jurisJ a!ainst the ta9payer. $his is d"e to
the fact that clais for ref"ndKcredit Fparta
re!istered entity, tho"!h, it 0as still s"b?ect to thepayent of other national internal re2en"e ta9es,
liyear prescripti2e period. S"ch
payents 0ere E to the e9tent of the ref"ndable
2al"e E d"ly s"pported by A$ in2oices or oHcial
receipts, and 0ere not yet o=set a!ainst any o"tp"t
A$ liability.