BICOLANDIA DRUG CORP. vs.

COMMISSIONER OF INTERNAL REVENUE

G.R. No. 142299
June 22 2!!"
FACTS#
Petitioner Bicolandia Drug Corporation is a domestic corporation principally engaged in the retail of
pharmaceutical products. Petitioner has a drugstore located in Naga City under the name and business style of
"Mercury Drug."
Pursuant to the provisions of R.A. No. !"#$ entitled "An Act to Ma%imi&e the Contribution of 'enior Citi&ens to
Nation Building$ (rant Bene)ts and 'pecial Privileges and for *ther Purposes$" also +no,n as the "'enior Citi&ens Act$"
and Revenue Regulations No. #-.!$ petitioner granted to /uali)ed senior citi&ens a #01 sales discount on their
purchase of medicines covering the period from 2uly 3.$ 3.." to December "3$ 3..!.
4hen petitioner )led its corresponding corporate annual income ta% returns for ta%able years 3.." and 3..!$
it claimed as a deduction from its gross income the respective amounts of P50$""0 and P636$000 representing the
#01 sales discount it granted to senior citi&ens. *n March #5$ 3..6$ ho,ever$ alleging error in the computation and
claiming that the aforementioned #01 sales discount should have been treated as a ta% credit pursuant to R.A. No.
!"# instead of a deduction from gross income$ petitioner )led a claim for refund or credit of overpaid income ta% for
3.." and 3..!$ amounting to P6#$#36 and P""!$60$ respectively.
ISSUE#
4hether or not the 'enior Citi&ens Discount is deductible from (ross 7ncome8
RULING#
'ec. !.Privileges for the 'enior citi&ens. 9 :he senior citi&ens shall be entitled to the follo,ing;
.. the grant of t,enty percent <#01= discount from all establishments relative to utili&ation of transportation
services$ hotels and similar lodging establishments$ restaurants and recreation centers and purchase of medicines
any,here in the country; Provided$ :hat private establishments may claim the cost as ta% credit.
:he term "cost" in the above provision refers to the amount of the #01 discount e%tended by a private
establishment to senior citi&ens in their purchase of medicines. :his amount shall be applied as a ta% credit$ and may
be deducted from the ta% liability of the entity concerned. 7f there is no current ta% due or the establishment reports a
net loss for the period$ the credit may be carried over to the succeeding ta%able year. :his is in line ,ith the
interpretation of this Court in Commissioner of 7nternal Revenue v. Central >u&on Drug Corporation ,herein it a?rmed
that R.A. No. !"# allo,s private establishments to claim as ta% credit the amount of discounts they grant to senior
citi&ens.
:he Court notes that petitioner$ ,hile praying for the reinstatement of the C:A Resolution$ dated December $
3..5$ directing the issuance of ta% certi)cates in favor of petitioner for the respective amounts of P!6$6!.@" and
P3"6$.0@.!5 representing overpaid income ta% for 3.." and 3..!$ as+s for the refund of the same.
7n this regard$ petitionerAs claim for refund must be denied. :he la, e%pressly provides that the discount given
to senior citi&ens may be claimed as a ta% credit$ and not a refund. :hus$ ,here the ,ords of a statute are clear$ plain
and free from ambiguity$ it must be given its literal meaning and applied ,ithout attempted interpretation.