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Ponencia by Justice Lucas P. Bersamin, 2017 Bar Chairman
G.R. No. 172394. October 13, 2010
It is now settled that for purposes of determining
their tax liability, pawnshops are treated as non-
bank financial intermediaries
G.R. No. 172394. October 13, 2010
Since petitioner is a non-bank financial
intermediary, it is subject to 10% VAT for the tax
years 1996 to 2002; however, with the levy,
assessment and collection of VAT from non-bank
financial intermediaries being specifically
deferred deferred by law, then petitioner is not
liable for VAT during these tax years. But with the
full implementation of the VAT system on non-
bank financial intermediaries starting January 1,
2003, petitioner is liable for 10% VAT for said tax
year. And beginning 2004 up to the present, by
virtue of R.A. No. 9238, Petitioner is no longer
liable for VAT but it is subject to percentage tax
on gross receipts from 0% to 5%, as the case may
be.
The aforequoted pronouncement in has been
reiterated thereby affirming the non-liability for
VAT of pawnshops in taxable years 1996-2002 by
virtue of the deferment of its imposition.
Consequently, the VAT deficiency assessment and
the surcharge served on Tambunting by the BIR
lacked legal basis and must be cancelled.
As earlier mentioned, however, Tambunting paid
to the BIR 25% of its VAT liability for the years
2000 to 2002 pursuant to a settlement
agreement. The tax liability in question herein
includes taxable year 2000 only. To align with the
result herein, therefore, Tambunting is entitled to
a refund of any amount paid pursuant to the
settlement agreement corresponding to taxable
year 2000 only.
G.R. No. 173373
The rule that tax deductions, being in the nature
of tax exemptions, are to be construed in
strictissimi juris against the taxpayer is well
settled. Corollary to this rule is the principle that
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when a taxpayer claims a deduction, he must
point to some specific provision of the statute in
which that deduction is authorized and must be
able to prove that he is entitled to the deduction
which the law allows. An item of expenditure,
therefore, must fall squarely within the language
of the law in order to be deductible. A mere
averment that the taxpayer has incurred a loss
does not automatically warrant a deduction from
its gross income.
As the CTA En Banc held, TTT did not properly
prove that it had incurred losses. The subasta
books it presented were not the proper evidence
of such losses from the auctions because they did
not reflect the true amounts of the proceeds of
the auctions due to certain items having been left
unsold after the auctions. The rematado books
did not also prove the amounts of capital because
the figures reflected therein were only the
amounts given to the pawnees. It is interesting to
note, too, that the amounts received by the
pawnees were not the actual values of the
pawned articles but were only fractions of the
real values.
G.R. No. 188260
Section 112 of the National Internal Revenue
Code 1997 provides:
SEC. 112. Refunds or Tax Credits of Input Tax.
(A) Zero-rated or Effectively Zero-rated Sales--Any
VAT-registered person, whose sales are zero-
rated or effectively zero-rated may, within two
(2) years after the close of the taxable quarter
when the sales were made, apply for the issuance
of a tax credit certificate or refund of creditable
input tax due or paid attributable to such sales,
except transitional input tax, to the extent that
such input tax has not been applied against
output tax: Provided, however, That in the case of
zero-rated sales under Section 106(A)(2)(a)(1), (2)
and (B) and Section 108(B)(1) and (2), the
acceptable foreign currency exchange proceeds
thereof had been duly accounted for in
accordance with the rules and regulations of the
Bangko Sentral ng Pilipinas (BSP): Provided,
further, That where the taxpayer is engaged in
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zero-rated or effectively zero-rated sale and also
in taxable or exempt sale of goods or properties
or services, and the amount of creditable input
tax due or paid cannot be directly and entirely
attributed to any one of the transactions, it shall
be allocated proportionately on the basis of the
volume of sales.
xxxx
G.R. No. 188260
A claim for refund or tax credit for unutilized
input VAT may be allowed only if the following
requisites concur, namely:
(a) the taxpayer is VAT-registered;
(b) the taxpayer is engaged in zero-rated or
effectively zero-rated sales;
(c) the input taxes are due or paid;
(d) the input taxes are not transitional input
taxes;
(e) the input taxes have not been applied against
output taxes during and in the succeeding
quarters;
(f) the input taxes claimed are attributable to
zero-rated or effectively zero-rated sales;
(g) for zero-rated sales under Section 106(A)(2)(1)
and (2); 106(B); and 108(B)(1) and (2), the
acceptable foreign currency exchange proceeds
have been duly accounted for in accordance with
the rules and regulations of the Bangko Sentral ng
Pilipinas;
(h) where there are both zero-rated or effectively
zero-rated sales and taxable or exempt sales, and
the input taxes cannot be directly and entirely
attributable to any of these sales, the input taxes
shall be proportionately allocated on the basis of
sales volume; and
(i) the claim is filed within two years after the
close of the taxable quarter when such sales were
made.
G.R. No. 161759
Section 7. Jurisdiction. - The Court of Tax Appeals
shall exercise exclusive appellate jurisdiction to
review by appeal, as herein provided:
xxxx
2. Decisions of the Commissioner of Customs in
cases involving liability for Customs duties, fees or
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other money charges; seizure, detention or
release of property affected; fines, forfeitures or
other penalties imposed in relation thereto; or
other matters arising under the Customs Law or
other law or part of law administered by the
Bureau of Customs;
xxxx
G.R. No. 180651
Double taxation means taxing the same property
twice when it should be taxed only once; that is,
"taxing the same person twice by the same
jurisdiction for the same thing."
It is obnoxious when the taxpayer is taxed twice,
when it should be but once. Otherwise described
as "direct duplicate taxation," the two taxes must
be imposed on the same subject matter, for the
same purpose, by the same taxing authority,
within the same jurisdiction, during the same
taxing period; and the taxes must be of the same
kind or character.
G.R. No. 160206
To warrant forfeiture, Section 2530(a) and (f) of
the Tariff and Customs Code of the Philippines
(RA 1125) requires that the importation must
have been unlawful or prohibited. According to
Section 3601 of the TCCP: "[a]ny person who shall
fraudulently import or bring into the Philippines,
or assist in so doing, any article, contrary to law,
or shall receive, conceal, buy, sell, or in any
manner facilitate the transportation,
concealment, or sale of such article after
importation, knowing the same to have been
imported contrary to law, shall be guilty of
smuggling."
G.R. No. 160206 July 15, 2015
The Tariff and Customs Code of the Philippines
contained a counterpart provision that reads:
Section 2402. Review by Court of Tax Appeals. -
The party aggrieved by a ruling of the
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Commissioner in any matter brought before him
upon protest or by his action or ruling in any case
of seizure may appeal to the Court of Tax
Appeals, in the manner and within the period
prescribed by law and regulations.
Unless an appeal is made to the Court of Tax
Appeals in the manner and within the period
prescribed by laws and regulations, the action or
ruling of the Commissioner shall be final and
conclusive.
Conformably with the foregoing provisions, the
action of the Collector of Customs was
appealable to the Commissioner of Customs,
whose decision was subject to the exclusive
appellate jurisdiction of the CTA, whose decision
was in turn appealable to the CA.
G.R. No. 160206 July 15, 2015
The M/V Don Martin and its cargo of rice were
seized and forfeited for allegedly violating Section
2530 (a), (f), (k) and (1), paragraph (1), of the
TCCP, to wit:
Section 2530. Property Subject to Forfeiture
Under Tariff and Customs Laws. Any vehicle,
vessel or aircraft, cargo, articles and other objects
shall, under the following conditions, be subject
to forfeiture:
a. Any vehicle, vessel or aircraft, including cargo,
which shall be used unlawfully in the importation
or exportation of articles or in conveying and/or
transporting contraband or smuggled articles in
commercial quantities into or from any Philippine
port or place. The mere carrying or holding on
board of contraband or smuggled articles in
commercial quantities shall subject such vessel,
vehicle, aircraft or any other craft to forfeiture;
Provided, That the vessel, or aircraft or any other
craft is not used as duly authorized common
carrier and as such a carrier it is not chartered or
leased; x x x
xxxx
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f. Any article the importation or exportation of
which is effected or attempted contrary to law, or
any article of prohibited importation or
exportation, and all other articles, which, in the
opinion of the Collector have been used, are or
were entered to be used as instruments in the
importation or exportation of the former; x x x
xxxx
k. Any conveyance actually being used for the
transport of articles subject to forfeiture under
the tariff and customs laws, with its equipage or
trappings, and any vehicle similarly used,
together with its equipage and appurtenances
including the beast, steam or other motive power
drawing or propelling the same. The mere
conveyance of contraband or smuggled articles
by such beast or vehicle shall be sufficient cause
for the outright seizure and confiscation of such
beast or vehicle, but the forfeiture shall not be
effected if it is established that the owner or the
means of conveyance used as aforesaid, is
engaged as common carrier and not chartered or
leased, or his agent in charge thereof at the time
has no knowledge of the unlawful act;
1. Any article sought to be imported or exported:
(1) Without going through a customhouse,
whether the act was consummated, frustrated or
attempted; x x x.
xxxx
Conformably with the foregoing, therefore, the
respondents should establish probable cause
prior to forfeiture by proving: (1) that the
importation or exportation of the 6,500 sacks of
rice was effected or attempted contrary to law,
or that the shipment of the 6,500 sacks of rice
constituted prohibited importation or
exportation; and (2) that the vessel was used
unlawfully in the importation or exportation of
the rice, or in conveying or transporting the rice,
if considered as contraband or smuggled articles
in commercial quantities, into or from any
Philippine port or place.
G.R. No. 188016
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Section 76 of the NIRC outlines the mechanisms
and remedies that a corporate taxpayer may opt
to exercise, viz:
Section 76. Final Adjusted Return.- Every
corporation liable to tax under Section 27 shall
file a final adjustment return covering the total
taxable income for the preceding calendar of
fiscal year. If the sum of the quarterly tax
payments made during the said taxable year is
not equal to the total tax due on the entire
taxable income of that year, the corporation shall
either:
(A) Pay the balance of the tax still due; or
(B) Carry over the excess credit; or
(C) Be credited or refunded withthe excess
amount paid, as the case may be.
In case the corporation is entitled to a tax credit
or refund of the excess estimated quarterly
income taxes paid, the excess amount shown on
its final adjustment return may be carried over
and credited against the estimated quarterly
income tax liabilities for the taxable quarters of
the succeeding taxable years. Once the option to
carry over and apply the excess quarterly income
tax against income tax due for the taxable years
of the succeeding taxable years has been made,
such option shall be considered irrevocable for
that taxable period and no application for cash
refund or issuance of a tax credit certificate shall
be allowed therefor. The two options are
alternative and not cumulative in nature, that is,
the choice of one precludes the other.
G.R. No. 188016
Section 76 of the NIRC of 1997 is clear and
unequivocal in providing that the carry-over
option, once actually or constructively chosen by
a corporate taxpayer, becomes irrevocable. The
Court explains: Hence, the controlling factor for
the operation of the irrevocability rule is that the
taxpayer chose an option; and once it had already
done so, it could no longer make another one.
Consequently, after the taxpayer opts to carry-
over its excess tax credit to the following taxable
period, the question of whether or not it actually
gets to apply said tax credit is irrelevant.
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G.R. No. 210836
Under Section 129 of the NIRC, as amended,
excise taxes are imposed on two kinds of goods,
namely: (a) goods manufactured or produced in
the Philippines for domestic sales or consumption
or for any other disposition; and (b) things
imported. Undoubtedly, the excise tax imposed
under Section 129 of the NIRC is a tax on
property.
With respect to imported things, Section 131 of
the NIRC declares that excise taxes on imported
things shall be paid by the owner or importer to
the Customs officers, conformably with the
regulations of the Department of Finance and
before the release of such articles from the
customs house, unless the imported things are
exempt from excise taxes and the person found
to be in possession of the same is other than
those legally entitled to such tax exemption. For
this purpose, the statutory taxpayer is the
importer of the things subject to excise tax.
G.R. No. 210836
Excise tax on petroleum products is essentially a
tax on property, the direct liability for which
pertains to the statutory taxpayer (i.e.,
manufacturer, producer or importer). Any excise
tax paid by the statutory taxpayer on petroleum
products sold to any of the entities or agencies
named in Section 135 of the National Internal
Revenue Code (NIRC) exempt from excise tax is
deemed illegal or erroneous, and should be
credited or refunded to the ayor pursuant to
Section 204 of the NIRC. This is because the
exemption granted under Section 135 of the NIRC
must be construed in favor of the property itself,
that is, the petroleum products.
G.R. No. 210836
Section 135 of the NIRC states:
Sec. 135. Petroleum Products Sold to
International Carriers and Exempt Entities or
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Agencies. Petroleum products sold to the
following are exempt from excise tax:
(a) International carriers of Philippine or foreign
registry on their use or consumption outside the
Philippines: Provided, That the petroleum
products sold to these international carriers shall
be stored in a bonded storage tank and may be
disposed of only in accordance with the rules and
regulations to be prescribed by the Secretary of
Finance, upon recommendation of the
Commissioner;
(b) Exempt entities or agencies covered by tax
treaties, conventions and other international
agreement for their use or consumption:
Provided, however, That the country of said
foreign international carrier or exempt entities or
agencies exempts from similar taxes petroleum
products sold to Philippine carriers, entities or
agencies; and
(c) Entities which are by law exempt from direct
and indirect taxes. (Emphasis supplied.)
Pursuant to Section 135(c), supra, petroleum
products sold to entities that are by law exempt
from direct and indirect taxes are exempt from
excise tax. The phrase which are by law exempt
from direct and indirect taxes describes the
entities to whom the petroleum products must
be sold in order to render the exemption
operative. Section 135(c) should thus be
construed as an exemption in favor of the
petroleum products on which the excise tax was
levied in the first place. The exemption cannot be
granted to the buyers that is, the entities that
are by law exempt from direct and indirect taxes
because they are not under any legal duty to
pay the excise tax.
G.R. No. 210836
Section 204 of the NIRC explicitly allowed CCC as
the statutory taxpayer to claim the refund or the
credit of the excise taxes thereby paid, viz.:
Sec. 204. Authority of the Commissioner to
Compromise, Abate and Refund or Credit Taxes.
The Commissioner may
xxxx
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(c) Credit or refund taxes erroneously or illegally
received or penalties imposed without authority,
refund the value of internal revenue stamps
when they are returned in good condition by the
purchaser, and, in his discretion, redeem or
change unused stamps that have been rendered
unfit for use and refund their value upon proof of
destruction. No credit or refund of taxes or
penalties shall be allowed unless the taxpayer
files in writing with the Commissioner a claim for
credit or refund within two (2) years after
payment of the tax or penalty: Provided,
however, That a return filed showing an
overpayment shall be considered as a written
claim for credit or refund.
G.R. No. 210836
In cases involving excise tax exemptions on
petroleum products under Section 135 of the
NIRC, the Court has consistently held that it is the
statutory taxpayer, not the party who only bears
the economic burden, who is entitled to claim the
tax refund or tax credit. But the Court has also
made clear that this rule does not apply where
the law grants the party to whom the economic
burden of the tax is shifted by virtue of an
exemption from both direct and indirect taxes. In
which case, such party must be allowed to claim
the tax refund or tax credit even if it is not
considered as the statutory taxpayer under the
law.
G.R. No. 190506
Following the Philippine VAT system's adherence
to the Cross Border Doctrine and Destination
Principle, the VAT implications are that "no VAT
shall be imposed to form part of the cost of goods
destined for consumption outside of the
territorial border of the taxing authority."
G.R. No. 190506
PEZA-registered enterprises, which would
necessarily be located within ECQZONES, are VAT-
exempt entities, not because of Section 24 of Rep.
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Act No. 7916, as amended, which imposes the
five percent (5%) preferential tax rate on gross
income of PEZA-registered enterprises, in lieu of
all taxes; but, rather, because of Section 8 of the
same statute which establishes the fiction that
ECOZONES are foreign territory.
W 30 days from the receipt of the CIR's decision
Section 8 of Rep. Act No. 7916, as amended,
mandates that the PEZA shall manage and
operate the ECOZONES as a separate customs
territory; thus, creating the fiction that the
ECOZONE is a foreign territory. As a result, sales
made by a supplier in the Customs Territory to a
purchaser in the ECOZONE shall be treated as an
exportation from the Customs Territory.
Conversely, sales made by a supplier from the
ECOZONE to a purchaser in the Customs Territory
shall be considered as an importation into the
Customs Territory.
G.R. No. 190506
We should also take into consideration the nature
of VAT as an indirect tax. Although the seller is
statutorily liable for the payment of VAT, the
amount of the tax is allowed to be shifted or
passed on to the buyer. However, reporting and
remittance of the VAT paid to the BIR remained
to be the seller/supplier's obligation. Hence, the
proper party to seek the tax refund or credit
should be the suppliers, not the petitioner.
G.R. No. 193321. October 19, 2016
(1)
An administrative claim must be filed with the CIR
within two years after the close of the taxable
quarter when the zero-rated or effectively zero-
rated sales were made.
(2)
The CIR has 120 days from the date of submission
of complete documents in support of the
administrative claim within which to decide
whether to grant a refund or issue a tax credit
certificate. The 120-day period may extend
beyond the two-year period from the filing of the
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administrative claim if the claim is filed in the
later part of the two-year period. If the 120-day
period expires without any decision from the CIR,
then the administrative claim may be considered
to be denied by inaction.
(3)
A judicial claim must be filed with the CTA within
denying the administrative claim or from the
expiration of the 120-day period without any
action from the CIR.
(4)
All taxpayers, however, can rely on BIR Ruling No.
DA-489-03 from the time of its issuance on 10
December 2003 up to its reversal by this Court in
Aichi on 6 October 2010, as an exception to the
mandatory and jurisdictional 120+30 day periods.
G.R. No. 193321. October 19, 2016
The petitioner timely filed its administrative claim
on April 11, 2003, within the two-year
prescriptive period after the close of the taxable
quarter when the zero-rated sales were made.
The respondent had 120 days, or until August 9,
2003, to decide the petitioner's claim.
Considering that the respondent did not act on
the petitioner's claim on or before August 9,
2003, the latter had until September 8, 2003, the
last day of the 30-day period, within which to file
its judicial claim. However, it brought its petition
for review in the CTA only on March 10, 2004, or
184 days after the last day for the filing. Clearly,
the petitioner belatedly brought its judicial claim
for refund, and the CTA did not acquire
jurisdiction over the petitioner's appeal.
G.R. No. 193321. October 19, 2016
The two-year prescriptive period refers to the
period within which the taxpayer can file an
administrative claim, not the judicial claim with
the CTA.
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Ponencia by Justice Lucas P. Bersamin, 2017 Bar Chairman

G.R. No. 193321. October 19, 2016
There is a certain distinction between a receipt
and an invoice. The Court has reiterated the
distinction in this wise:
for administrative claims for tax refund or tax
credit.
G.R. No. 193321. October 19, 2016

Section 113 of the NIRC of 1997 provides that a
VAT invoice is necessary for every sale, barter or
exchange of goods or properties, while a VAT
official receipt properly pertains to every lease of
goods or properties; as well as to every sale,
barter or exchange of services.
The Court has in fact distinguished an invoice
from a receipt in Commissioner of Internal
Revenue v. Manila Mining Corporation:
A "sales or commercial invoice" is a written
account of goods sold or services rendered
indicating the prices charged therefor or a list by
whatever name it is known which is used in the
ordinary course of business evidencing sale and
transfer or agreement to sell or transfer goods
and services.
In a claim for tax refund or tax credit, the
applicant must prove not only entitlement to the
grant of the claim under substantive law. It must
also show satisfaction of all the documentary and
evidentiary requirements for an administrative
claim for a refund or tax credit. Hence, the mere
fact that petitioner's application for zero-rating
has been approved by the CIR does not, by itself,
justify the grant of a refund or tax credit. The
taxpayer claiming the refund must further comply
with the invoicing and accounting requirements
mandated by the NIRC, as well as by revenue
regulations implementing them.F

A "receipt" oh the other hand is a written

acknowledgment of the fact of payment in money
or other settlement between seller and buyer of
goods, debtor or creditor, or person rendering
services and client or customer.

A VAT invoice is the seller's best proof of the sale

of goods or services to the buyer, while a VAT
receipt is the buyer's best evidence of the
payment of goods or services received from the
seller. A VAT invoice and a VAT receipt should not
be confused and made to refer to one and the
same thing. Certainly, neither does the law intend
the two to be used alternatively.

G.R. No. 193321. October 19, 2016

Under VAT Ruling No. 011-03, the sales of goods

and services rendered by the petitioner to PPP
were subject to zero-percent (0%) VAT, and
required no prior approval for zero rating based
on Revenue Memorandum Circular 74-99.13 This
notwithstanding, the petitioner's claim for refund
must still be denied for its failure as the taxpayer
to comply with the substantiation requirements

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