Lawyerly

GR No. 171905

2012-06-20

UNITED CHURCH OF CHRIST IN PHILIPPINES v. BRADFORD UNITED CHURCH OF CHRIST

PEREZ, J.

The Court has likewise consistently rejected the pernicious practice of shifting to a new theory on appeal in the hope of a favorable result. Fair play, justice and due process require that as a rule new matters cannot be raised for the first time before an appellate tribunal.[30] Failure to assert issues and arguments "within a reasonable time" warrants a presumption that the party entitled to assert it either has abandoned or declined to assert it.[31]

GR No. 182364

2010-08-03

AT&T COMMUNICATIONS SERVICES PHILIPPINES v. CIR

CARPIO MORALES, J.

Commissioner of Internal Revenue v. Seagate Technology (Philippines)[8] teaches that petitioner, as zero-rated seller, hence, directly and legally liable for VAT, can claim a refund or tax credit certificate.

GR No. 178090

2010-02-08

PANASONIC COMMUNICATIONS IMAGING CORPORATION OF PHILIPPINES v. CIR

ABAD, J.

The VAT is a tax on consumption, an indirect tax that the provider of goods or services may pass on to his customers. Under the VAT method of taxation, which is invoice-based, an entity can subtract from the VAT charged on its sales or outputs the VAT it paid on its purchases, inputs and imports.[6] For example, when a seller charges VAT on its sale, it issues an invoice to the buyer, indicating the amount of VAT he charged. For his part, if the buyer is also a seller subjected to the payment of VAT on his sales, he can use the invoice issued to him by his supplier to get a reduction of his own VAT liability. The difference in tax shown on invoices passed and invoices received is the tax paid to the government. In case the tax on invoices received exceeds that on invoices passed, a tax refund may be claimed.

GR No. 172129

2008-09-12

CIR v. MIRANT PAGBILAO CORPORATION

VELASCO JR., J.

Zero-rated transactions generally refer to the export sale of goods and supply of services. The tax rate is set at zero. When applied to the tax base, such rate obviously results in no tax chargeable against the purchaser. The seller of such transactions charges no output tax, but can claim a refund of or a tax credit certificate for the VAT previously charged by suppliers.[23] (Emphasis added.)

GR No. 168584

2007-10-15

REPUBLIC v. RAMON S. CAGUIOA

CARPIO MORALES, J.

Third. As a general rule, tax exemptions are construed strictissimi juris against the taxpayer and liberally in favor of the taxing authority.[34] The burden of proof rests upon the party claiming exemption to prove that it is in fact covered by the exemption so claimed.[35] In case of doubt, non-exemption is favored.[36]

GR Nos. 141104 & 148763

2007-06-08

ATLAS CONSOLIDATED MINING v. CIR

CHICO-NAZARIO, J.

Such tax treatment of goods brought into the export processing zones are only consistent with the Destination Principle and Cross Border Doctrine to which the Philippine VAT system adheres. According to the Destination Principle,[22] goods and services are taxed only in the country where these are consumed. In connection with the said principle, the Cross Border Doctrine[23] mandates that no VAT shall be imposed to form part of the cost of the goods destined for consumption outside the territorial border of the taxing authority. Hence, actual export of goods and services from the Philippines to a foreign country must be free of VAT, while those destined for use or consumption within the Philippines shall be imposed with 10% VAT.[24] Export processing zones[25] are to be managed as a separate customs territory from the rest of the Philippines and, thus, for tax purposes, are effectively considered as foreign territory. For this reason, sales by persons from the Philippine customs territory to those inside the export processing zones are already taxed as exports.

GR NO. 166732

2007-04-27

INTEL TECHNOLOGY PHILIPPINES v. CIR

CALLEJO, SR., J.

Based on the above provision, export sales, or sales outside the Philippines, are subject to VAT at 0% rate if made by a VAT-registered person.[58] When applied to the tax base, the 0% rate obviously results in no tax chargeable against the purchaser. The seller of such transactions charges no output tax, but can claim a refund or tax credit certificate for the VAT previously charged by suppliers.[59]

GR NO. 168129

2007-04-24

COMMISSIONER OF INTERNAL REVENUE v. PHILIPPINE HEALTH CARE PROVIDERS

SANDOVAL-GUTIERREZ, J.

x x x The import of the above provision is plain. It requires no interpretation. It contemplates the exemption from VAT of taxpayers engaged in the performance of medical, dental, hospital, and veterinary services. In Commissioner of International Revenue v. Seagate Technology (Philippines),[7] we defined an exempt transaction as one involving goods or services which, by their nature, are specifically listed in and expressly exempted from the VAT, under the Tax Code, without regard to the tax status of the party in the transaction. In Commissioner of Internal Revenue v. Toshiba Information Equipment (Phils.) Inc.,[8] we reiterated this definition.

GR No. 168056

2005-09-01

CONSTITUTIONALITY OF THE VALUE ADDED TAX LAW

AUSTRIA-MARTINEZ, J.

In the Philippines, the value-added system of sales taxation has long been in existence, albeit in a different mode. Prior to 1978, the system was a single-stage tax computed under the "cost deduction method" and was payable only by the original sellers. The single-stage system was subsequently modified, and a mixture of the "cost deduction method" and "tax credit method" was used to determine the value-added tax payable.[13] Under the "tax credit method," an entity can credit against or subtract from the VAT charged on its sales or outputs the VAT paid on its purchases, inputs and imports.[14]

GR NO. 153204

2005-08-31

CIR v. MANILA MINING CORPORATION

CARPIO-MORALES, J.

For a judicial claim for refund to prosper, however, respondent must not only prove that it is a VAT registered entity and that it filed its claims within the prescriptive period. It must substantiate the input VAT paid by purchase invoices or official receipts.[52]

GR NO. 150154

2005-08-09

CIR v. TOSHIBA INFORMATION EQUIPMENT

CHICO-NAZARIO, J.

It would seem that petitioner CIR failed to differentiate between VAT-exempt transactions from VAT-exempt entities. In the case of Commissioner of Internal Revenue v. Seagate Technology (Philippines),[19] this Court already made such distinction -

GR NO. 141973

2005-06-28

PHILIPPINE PHOSPHATE FERTILIZER CORPORATION v. CIR

AUSTRIA-MARTINEZ, J.

The general rule is that claimants of tax refunds bear the burden of proving the factual basis of their claims.[43] This is because tax refunds are in the nature of tax exemptions, the statutes of which are construed strictissimi juris against the taxpayer and liberally in favor of the taxing authority.[44] Taxes are the lifeblood of the nation, therefore statutes that allow exemptions are construed strictly against the grantee and liberally in favor of the government.[45]

	GR No. 171905 2012-06-20	UNITED CHURCH OF CHRIST IN PHILIPPINES v. BRADFORD UNITED CHURCH OF CHRIST PEREZ, J.
The Court has likewise consistently rejected the pernicious practice of shifting to a new theory on appeal in the hope of a favorable result. Fair play, justice and due process require that as a rule new matters cannot be raised for the first time before an appellate tribunal.[30] Failure to assert issues and arguments "within a reasonable time" warrants a presumption that the party entitled to assert it either has abandoned or declined to assert it.[31]
	GR No. 182364 2010-08-03	AT&T COMMUNICATIONS SERVICES PHILIPPINES v. CIR CARPIO MORALES, J.
Commissioner of Internal Revenue v. Seagate Technology (Philippines)[8] teaches that petitioner, as zero-rated seller, hence, directly and legally liable for VAT, can claim a refund or tax credit certificate.
	GR No. 178090 2010-02-08	PANASONIC COMMUNICATIONS IMAGING CORPORATION OF PHILIPPINES v. CIR ABAD, J.
The VAT is a tax on consumption, an indirect tax that the provider of goods or services may pass on to his customers. Under the VAT method of taxation, which is invoice-based, an entity can subtract from the VAT charged on its sales or outputs the VAT it paid on its purchases, inputs and imports.[6] For example, when a seller charges VAT on its sale, it issues an invoice to the buyer, indicating the amount of VAT he charged. For his part, if the buyer is also a seller subjected to the payment of VAT on his sales, he can use the invoice issued to him by his supplier to get a reduction of his own VAT liability. The difference in tax shown on invoices passed and invoices received is the tax paid to the government. In case the tax on invoices received exceeds that on invoices passed, a tax refund may be claimed.
	GR No. 172129 2008-09-12	CIR v. MIRANT PAGBILAO CORPORATION VELASCO JR., J.
Zero-rated transactions generally refer to the export sale of goods and supply of services. The tax rate is set at zero. When applied to the tax base, such rate obviously results in no tax chargeable against the purchaser. The seller of such transactions charges no output tax, but can claim a refund of or a tax credit certificate for the VAT previously charged by suppliers.[23] (Emphasis added.)
	GR No. 168584 2007-10-15	REPUBLIC v. RAMON S. CAGUIOA CARPIO MORALES, J.
Third. As a general rule, tax exemptions are construed strictissimi juris against the taxpayer and liberally in favor of the taxing authority.[34] The burden of proof rests upon the party claiming exemption to prove that it is in fact covered by the exemption so claimed.[35] In case of doubt, non-exemption is favored.[36]
	GR Nos. 141104 & 148763 2007-06-08	ATLAS CONSOLIDATED MINING v. CIR CHICO-NAZARIO, J.
Such tax treatment of goods brought into the export processing zones are only consistent with the Destination Principle and Cross Border Doctrine to which the Philippine VAT system adheres. According to the Destination Principle,[22] goods and services are taxed only in the country where these are consumed. In connection with the said principle, the Cross Border Doctrine[23] mandates that no VAT shall be imposed to form part of the cost of the goods destined for consumption outside the territorial border of the taxing authority. Hence, actual export of goods and services from the Philippines to a foreign country must be free of VAT, while those destined for use or consumption within the Philippines shall be imposed with 10% VAT.[24] Export processing zones[25] are to be managed as a separate customs territory from the rest of the Philippines and, thus, for tax purposes, are effectively considered as foreign territory. For this reason, sales by persons from the Philippine customs territory to those inside the export processing zones are already taxed as exports.
	GR NO. 166732 2007-04-27	INTEL TECHNOLOGY PHILIPPINES v. CIR CALLEJO, SR., J.
Based on the above provision, export sales, or sales outside the Philippines, are subject to VAT at 0% rate if made by a VAT-registered person.[58] When applied to the tax base, the 0% rate obviously results in no tax chargeable against the purchaser. The seller of such transactions charges no output tax, but can claim a refund or tax credit certificate for the VAT previously charged by suppliers.[59]
	GR NO. 168129 2007-04-24	COMMISSIONER OF INTERNAL REVENUE v. PHILIPPINE HEALTH CARE PROVIDERS SANDOVAL-GUTIERREZ, J.
x x x The import of the above provision is plain. It requires no interpretation. It contemplates the exemption from VAT of taxpayers engaged in the performance of medical, dental, hospital, and veterinary services. In Commissioner of International Revenue v. Seagate Technology (Philippines),[7] we defined an exempt transaction as one involving goods or services which, by their nature, are specifically listed in and expressly exempted from the VAT, under the Tax Code, without regard to the tax status of the party in the transaction. In Commissioner of Internal Revenue v. Toshiba Information Equipment (Phils.) Inc.,[8] we reiterated this definition.
	GR No. 168056 2005-09-01	CONSTITUTIONALITY OF THE VALUE ADDED TAX LAW AUSTRIA-MARTINEZ, J.
In the Philippines, the value-added system of sales taxation has long been in existence, albeit in a different mode. Prior to 1978, the system was a single-stage tax computed under the "cost deduction method" and was payable only by the original sellers. The single-stage system was subsequently modified, and a mixture of the "cost deduction method" and "tax credit method" was used to determine the value-added tax payable.[13] Under the "tax credit method," an entity can credit against or subtract from the VAT charged on its sales or outputs the VAT paid on its purchases, inputs and imports.[14]
	GR NO. 153204 2005-08-31	CIR v. MANILA MINING CORPORATION CARPIO-MORALES, J.
For a judicial claim for refund to prosper, however, respondent must not only prove that it is a VAT registered entity and that it filed its claims within the prescriptive period. It must substantiate the input VAT paid by purchase invoices or official receipts.[52]
	GR NO. 150154 2005-08-09	CIR v. TOSHIBA INFORMATION EQUIPMENT CHICO-NAZARIO, J.
It would seem that petitioner CIR failed to differentiate between VAT-exempt transactions from VAT-exempt entities. In the case of Commissioner of Internal Revenue v. Seagate Technology (Philippines),[19] this Court already made such distinction -
	GR NO. 141973 2005-06-28	PHILIPPINE PHOSPHATE FERTILIZER CORPORATION v. CIR AUSTRIA-MARTINEZ, J.
The general rule is that claimants of tax refunds bear the burden of proving the factual basis of their claims.[43] This is because tax refunds are in the nature of tax exemptions, the statutes of which are construed strictissimi juris against the taxpayer and liberally in favor of the taxing authority.[44] Taxes are the lifeblood of the nation, therefore statutes that allow exemptions are construed strictly against the grantee and liberally in favor of the government.[45]

CIR v. SEAGATE TECHNOLOGY