vat cases january 26 2015

8/9/2019 Vat Cases January 26 2015

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VAT cases

Republic of the Philippines

SUPREME COURT

Manila

THIRD DIVISION

G.R. No. 148083 July 21, 2006

COMMISSIONER OF INTERNAL REVENUE, petitioner,

vs.

ICOLAN!IA !RUG CORPORATION "Fo#$%#ly &'o(' )* ELMAS !RUG CO.+, respondent.

D ! I S I O N

VELASCO, JR., J.:

In cases of conflict bet"een the la" and the rules and re#ulations i$ple$entin# the la", the la"shall al"a%s prevail. Should Revenue Re#ulations deviate fro$ the la" the% see& to i$ple$ent, the%

"ill be struc& do"n.

T% F)-*

In '((), Republic *ct No. +-), other"ise &no"n as *n *ct to Ma/i$i0e the !ontribution of Senior

!iti0ens to Nation 1uildin#, 2rant 1enefits and Special Privile#es and 3or Other Purposes, #ranted

senior citi0ens several privile#es, one of "hich "as obtainin# a )4 percent discount fro$ all

establish$ents relative to the use of transportation services, hotels and si$ilar lod#in#

establish$ents, restaurants and recreation centers and purchase of $edicines an%"here in the

countr%.'

The la" also provided that the private establish$ents #ivin# the discount to senior citi0ens$a% clai$ the cost as ta/ credit.) In co$pliance "ith the la", the 1ureau of Internal Revenue issued

Revenue Re#ulations No. )5(, "hich defined ta/ credit as follo"s6

T)/ C#% 7 refers to the a$ount representin# the )48 discount #ranted to a 9ualified

senior citi0en b% all establish$ents relative to their utili0ation of transportation services,

hotels and si$ilar lod#in# establish$ents, restaurants, halls, circuses, carnivals and other

si$ilar places of culture, leisure and a$use$ent, "hich discount shall be deducted b% the

said establish$ents fro$ their #ross inco$e for inco$e ta/ purposes and fro$ their #ross

sales for value5added ta/ or other percenta#e ta/ purposes.-

In '((:, respondent 1icolandia Dru# !orporation, a corporation en#a#ed in the business of retailin#phar$aceutical products under the business st%le of Mercur% Dru#, #ranted the )4 percent sales

discount to 9ualified senior citi0ens purchasin# their $edicines in co$pliance "ith R.*. No.

+-). Respondent treated this discount as a deduction fro$ its #ross inco$e in co$pliance "ith

Revenue Re#ulations No. )5(, "hich i$ple$ented R.*. No. +-).: On *pril ':, '((;, respondent

filed its '((: !orporate *nnual Inco$e Ta/ Return declarin# a net loss position "ith nil inco$e ta/

liabilit%.;

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Petitioner no" ar#ues that the !ourt of *ppeals erred in holdin# that the )4 percent sales discount

#ranted to 9ualified senior citi0ens b% the respondent pursuant to R.*. No. +-) $a% be clai$ed as

a ta/ credit, instead of a deduction fro$ #ross inco$e or #ross sales.'

T% Cou#5* Rul'

The petition is not $eritorious.

R%%'' T)/ C#% )* T)/ !%u-o'

The proble$ ste$s fro$ the issuance of Revenue Re#ulations No. )5(, "hich "as supposed to

i$ple$ent R.*. No. +-), and the radical departure it $ade "hen it defined the ta/ credit that

"ould be #ranted to establish$ents that #ive )4 percent discount to senior citi0ens. Cnder Revenue

Re#ulations No. )5(, the ta/ credit is the a$ount representin# the )4 percent discount #ranted to a

9ualified senior citi0en b% all establish$ents relative to their utili0ation of transportation services,

hotels and si$ilar lod#in# establish$ents, restaurants, dru#stores, recreation centers, theaters,

cine$a houses, concert halls, circuses, carnivals and other si$ilar places of culture, leisure anda$use$ent, "hich discount shall be deducted b% the said establish$ents fro$ their #ross inco$e

for inco$e ta/ purposes and fro$ their #ross sales for value5added ta/ or other percenta#e ta/

purposes.': It e9uated ta/ credit "ith ta/ deduction, contrar% to the definition in 1lac&Bs Ea"

Dictionar%, "hich defined ta/ credit as6

*n a$ount subtracted fro$ an individualBs or entit%Bs ta/ liabilit% to arrive at the total ta/

liabilit%. * ta/ credit reduces the ta/pa%erBs liabilit% / / /, co$pared to a deduction "hich

reduces ta/able inco$e upon "hich the ta/ liabilit% is calculated. * credit differs fro$

deduction to the e/tent that the for$er is subtracted fro$ the ta/ "hile the latter is subtracted

fro$ inco$e before the ta/ is co$puted.';

The interpretation of an ad$inistrative #overn$ent a#enc%, "hich is tas&ed to i$ple$ent the statute,

is accorded #reat respect and ordinaril% controls the construction of the courts.'+ 1e that as it $a%,

the definition laid do"n in the 9uestioned Revenue Re#ulations can still be sub@ected to scrutin%.

!ourts "ill not hesitate to set aside an e/ecutive interpretation "hen it is clearl% erroneous. There is

no need for interpretation "hen there is no a$bi#uit% in the rule, or "hen the lan#ua#e or "ords

used are clear and plain or readil% understandable to an ordinar% reader.'= The definition of the ter$

ta/ credit is plain and clear, and the atte$pt of Revenue Re#ulations No. )5( to define it differentl%

is the root of the conflict.

T)/ C#% * 'o T)/ R%u'

Petitioner ar#ues that the ta/ credit is in the nature of a ta/ refund and should be treated as a return

for ta/ pa%$ents erroneousl% or e/cessivel% assessed a#ainst a ta/pa%er, in line "ith Section )4>c?

of Republic *ct No. =), or the National Internal Revenue !ode of '((+. Petitioner clai$s that

there should first be pa%$ent of the ta/ before the ta/ credit can be clai$ed. Ho"ever, in the

National Internal Revenue !ode, "e see at least one instance "here this is not the case. *n% V*T5

re#istered person, "hose sales are 0ero5rated or effectivel% 0ero5rated $a%, "ithin t"o >)? %ears

after the close of the ta/able 9uarter "hen the sales "ere $ade, appl% for the issuance of a ta/

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credit certificate or refund of creditable input ta/ due or paid attributable to such sales, e/cept

transitional input ta/, to the e/tent that such input ta/ has not been applied a#ainst output ta/.'( It

spea&s of a ta/ credit for ta/ due, so pa%$ent of the ta/ has not %et been $ade in that particular

e/a$ple.

The !ourt of *ppeals e/pressl% reco#ni0ed the differences bet"een a ta/ credit and a ta/ refund,and stated that the sa$e are not s%non%$ous "ith each other, "hich is "h% it $odified the rulin# of

the !ourt of Ta/ *ppeals.

R%7%'u% R%ul)o'* No. 294 7*. R.A. No. :432 )'

R.A. No. :432 7*. % N)o')l I'%#')l R%7%'u% Co%

Petitioner contends that since R.*. No. +-) used the "ord $a%, the availabilit% of the ta/ credit to

private establish$ents is onl% per$issive and not absolute or $andator%. 3ro$ that startin# point,

petitioner further ar#ues that the definition of the ter$ ta/ credit in Revenue Re#ulations No. )5(

"as validl% issued under the authorit% #ranted b% the la" to the Depart$ent of 3inance to for$ulate

the needed #uidelines. It further e/plained that Revenue Re#ulations No. )5( can be har$oni0ed"ith R.* No. +-), such that the definition of the ter$ ta/ credit in Revenue Re#ulations No. )5(

is controllin#. It clai$s that to do other"ise "ould result in Section >a? of R.*. No. +-) i$pliedl%

repealin# Section )4 >c? of the National Internal Revenue !ode.

These ar#u$ents $ust also fail.

Revenue Re#ulations No. )5( is still subordinate to R.*. No. +-), and in cases of conflict, the

i$ple$entin# rule "ill not prevail over the la" it see&s to i$ple$ent. hile see$in#l% conflictin#

la"s $ust be har$oni0ed as far as practicable, in this particular case, the conflict cannot be

resolved in the $anner the petitioner "ishes. There is a #reat divide separatin# the idea of ta/

credit and ta/ deduction, as seen in the definition in 1lac&Bs Ea" Dictionar%.

The clai$ed absurdit% of Section >a? of R.*. No. +-) i$pliedl% repealin# Section )4>c? of the

National Internal Revenue !ode could onl% co$e about if it is accepted that a ta/ credit is a&in to a

ta/ refund "herein pa%$ent of ta/es $ust be $ade in order for it to be clai$ed. 1ut as sho"n in

Section '')>a? of the National Internal Revenue !ode, it is not al"a%s necessar% for pa%$ent to be

$ade for a ta/ credit to be available.

Loo&' 'o R.A. No. :432

3inall%, petitioner ar#ues that should private establish$ents, "hich count respondent in their nu$ber,

be allo"ed to clai$ ta/ credits for discounts #iven to senior citi0ens, the% "ould be earnin# and not @ust be rei$bursed for the discounts #iven.

It cannot be denied that R.*. No. +-) has a laudable #oal. Moreover, it cannot be ar#ued that it

"as the intent of la"$a&ers for private establish$ents to be the pri$ar% beneficiaries of the la".

Ho"ever, "hile the purpose of the la" to benefit senior citi0ens is praise"orth%, the concerns of the

affected private establish$ents "ere also considered b% the la"$a&ers. *s in other cases "herein

private propert% is ta&en b% the State for public use, there $ust be @ust co$pensation. In this

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particular case, it too& the for$ of the ta/ credit #ranted to private establish$ents, purposel% chosen

b% the la"$a&ers. In the si$ilar case of Commissioner of Internal Revenue v. Central Luzon Drug

Corporation,)4 scrutini0in# the deliberations of the 1ica$eral !onference !o$$ittee Meetin# on

Social Fustice on 3ebruar% :, '(() "hich finali0ed R.*. No. +-), the discussions of the la"$a&ers

clearl% sho"ed the intent that the cost of the )4 percent discount $a% be clai$ed b% the private

establish$ents as a ta/ credit. *n e/cerpt fro$ the deliberations is as follo"s6

SN. *N2*R*. In the case of private hospitals the% #ot the #rant of ':8 discount, provided

that, the private hospitals can clai$ the e/pense as a ta/ credit.

RP. *GCINO. ah could be allo"ed as deductions in the preparation of >inaudible? inco$e.

SN. *N2*R*. I5ta/ credit na lan# natin para "alan# cash5out

RP. *GCINO. Oo, ta/ credit. Ta$a. O&a%. Hospitals ba o lahat n# establish$ents na

covered.

TH !H*IRM*N. Sa &u"an lan# %on, as private hospitals lan#.

RP. *GCINO. *no ba %un# establish$ents na covered

SN. *N2*R*. Restaurant, lod#in# houses, recreation centers.

RP. *GCINO. *ll establish$ents covered si#uro

SN. *N2*R*. 3ro$ all establish$ents. *lisin na natin J%un# &u"an &un# #anon. !an "e

#o bac& to Section ha

RP. *GCINO. Oho.

SN. *N2*R*. Eetter *. To capture that thou#ht, "eBll sa% the #rant of )48 discount fro$ all

establish$ents et cetera, et cetera, provided that said establish$ents $a% clai$ the cost as

a ta/ credit. 2anon ba J%on

RP. *GCINO. ah.

SN. *N2*R*. Dahil &un# #overn$ent, the% donBt need to clai$ it.

TH !H*IRM*N. Ta/ credit.

SN. *N2*R*. *s a ta/ credit KratherL than a &u"an 7 deduction, O&a%.)'

It is clear that the la"$a&ers intended the #rant of a ta/ credit to co$pl%in# private establish$ents

li&e the respondent.

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If the private establish$ents appear to benefit $ore fro$ the ta/ credit than ori#inall% intended, it is

not for petitioner to sa% that the% shouldnBt. The ta/ credit $a% actuall% have provided #reater

incentive for the private establish$ents to co$pl% "ith R.*. No. +-), or 9uic&er relief fro$ the cut

into profits of these businesses.

R%7%'u% R%ul)o'* No. 294 Null )' Vo

3ro$ the above discussion, it $ust be concluded that Revenue Re#ulations No. )5( is null and void

for failin# to confor$ to the la" it sou#ht to i$ple$ent. In case of discrepanc% bet"een the basic la"

and a rule or re#ulation issued to i$ple$ent said la", the basic la" prevails because said rule or

re#ulation cannot #o be%ond the ter$s and provisions of the basic la".))

Revenue Re#ulations No. )5( bein# null and void, it $ust be ruled then that under R.*. No. +-),

"hich "as effective at the ti$e, respondent is entitled to its clai$ of a ta/ credit, and the rulin# of the

!ourt of *ppeals $ust be affir$ed.

1ut even as this particular case is decided in this $anner, it $ust be noted that the concerns of thepetitioner re#ardin# ta/ credits #ranted to private establish$ents #ivin# discounts to senior citi0ens

have been addressed. R.*. No. +-) has been a$ended b% Republic *ct No. ():+, the /panded

Senior !iti0ens *ct of )44-. In this, the ter$ ta/ credit is no lon#er used. The )4 percent discount

#ranted b% hotels and si$ilar lod#in# establish$ents, restaurants and recreation centers, and in the

purchase of $edicines in all establish$ents for the e/clusive use and en@o%$ent of senior citi0ens is

treated in the follo"in# $anner6

The establish$ent $a% clai$ the discounts #ranted under >a?, >f?, >#? and >h? as ta/

deduction based on the net cost of the #oods sold or services rendered6 Provided , That the

cost of the discount shall be allo"ed as deduction fro$ #ross inco$e for the sa$e ta/able

%ear that the discount is #ranted. Provided, further , that the total a$ount of the clai$ed ta/deduction net of value added ta/ if applicable, shall be included in their #ross sales receipts

for ta/ purposes and shall be sub@ect to proper docu$entation and to the provisions of the

National Internal Revenue !ode, as a$ended. )-

This ti$e around, there is no conflict bet"een the la" and the i$ple$entin# Revenue Re#ulations.

Cnder Revenue Re#ulations No. 5)44;, >o?nl% the actual a$ount of the discount #ranted or a sales

discount not e/ceedin# )48 of the #ross sellin# price can be deducted fro$ the #ross inco$e, net of

value added ta/, if applicable, for inco$e ta/ purposes, and fro$ #ross sales or #ross receipts of the

business enterprise concerned, for V*T or other percenta#e ta/ purposes.) Cnder the ne" la",

there is no ta/ credit to spea& of, onl% deductions.

Petitioner can find so$e vindication in the a$end$ent $ade to R.*. No. +-) b% R.*. No. ():+,

"hich $a% be $ore in consonance "ith the principles of ta/ation, but as it "as R.*. No. +-) in

force at the ti$e this case arose, this la" controls the result in this particular case, for "hich reason

the petition $ust fail.

This case should re$ind all heads of e/ecutive a#encies "hich are #iven the po"er to pro$ul#ate

rules and re#ulations, that the% assu$e the roles of la"$a&ers. It is "ell5settled that a re#ulation

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should not conflict "ith the la" it i$ple$ents. Thus, those draftin# the re#ulations should stud% "ell

the la"s their rules "ill i$ple$ent, even to the e/tent of revie"in# the $inutes of the deliberations of

!on#ress about its intent "hen it drafted the la". The% $a% also consult the Secretar% of Fustice or

the Solicitor 2eneral for their opinions on the drafted rules. *d$inistrative rules, re#ulations and

orders have the efficac% and force of la" so lon# as the% do not contravene an% statute or the

!onstitution.

):

It is then the dut% of the a#encies to ensure that their rules do not deviate fro$ ora$end acts of !on#ress, for their re#ulations are al"a%s subordinate to la".

;V*T?. The

present respondent, "hich availed itself of the second ta/ incentive sche$e, has proven that all its

transactions "ere e/port sales. Hence, the% should be V*T 0ero5rated.

T% C)*%

1efore us is a Petition for Revie"' under Rule : of the Rules of !ourt, challen#in# the *u#ust ';,

)44' Decision)of the !ourt of *ppeals >!*? in !*52R SP No. ;;+(. The assailed Decision upheld

the *pril );, )44' Decision- of the !ourt of Ta/ *ppeals >!T*? in !T* !ase No. :+:'. The !*

Decision disposed as follo"s6

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HR3OR, pre$ises considered, the present petition for revie" is hereb% DNID DC

!OCRS and accordin#l% DISMISSD for lac& of $erit. The Decision dated *pril );, )44' of

the !ourt of Ta/ *ppeals in !T* !ase No. :+:' is hereb% *33IRMD and CPHED.

On the other hand, the dispositive portion of the !T* Decision reads6

;)? separate

applications for ta/ creditrefund of V*T input ta/es paid for the period Fanuar% ' to March

-', '((+ and *pril ' to Fune -4, '((+, respectivel%. There bein# no action on its application

for ta/ creditrefund under Section '') >1? of the '((+ National Internal Revenue !ode >Ta/

!ode?, as a$ended, private respondent filed, "ithin the t"o >)?5%ear prescriptive period

under Section ))( of said !ode, a petition for revie" "ith the !ourt of Ta/ *ppeals on March

);, '(((.

Petitioner filed its *ns"er to the petition asseveratin# that6 >'? said clai$ for ta/ creditrefund

is sub@ect to ad$inistrative routinar% investi#ation b% the 1IRA >)? respondent $iserabl% failed

to sho" that the a$ount clai$ed as V*T input ta/es "ere erroneousl% collected or that the

sa$e "ere properl% docu$entedA >-? ta/es due and collected are presu$ed to have been

$ade in accordance "ith la", hence, not refundableA >? the burden of proof is on the

ta/pa%er to establish his ri#ht to a refund in an action for ta/ refund. 3ailure to dischar#e

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such dut% is fatal to his actionA >:? respondent should sho" that it co$plied "ith the

provisions of Section )4 in relation to Section ))( of the '((+ Ta/ !odeA and >;? clai$s for

refund are strictl% construed a#ainst the ta/pa%er as it parta&es of the nature of a ta/

e/e$ption. Hence, petitioner pra%ed for the denial of respondents petition.+

Rul' o % Cou# o T)/ A%)l*

The !T* ruled that respondent "as entitled to the refund. hile the co$pan% "as re#istered "ith

the P* as an eco0one and "as, as such, e/e$pt fro$ inco$e ta/, it availed itself of the fiscal

incentive under /ecutive Order No. ));. It thereb% sub@ected itself to other internal revenue ta/es

li&e the V*T.= The !T* then found that onl% input ta/es a$ountin# to P,-++,'4).); "ere dul%

substantiated b% invoices and Official Receipts,( "hile those a$ountin# to P):,-'-.- had not

been sufficientl% proven and "ere thus disallo"ed.'4

Rul' o % Cou# o A%)l*

The !ourt of *ppeals upheld the Decision of the !T*. *ccordin# to the !*, respondent hadco$plied "ith the procedural and substantive re9uire$ents for a clai$ b% '? sub$ittin# receipts,

invoices, and supportin# papers as evidenceA )? pa%in# the sub@ect input ta/es on capital #oodsA -?

not appl%in# the input ta/es a#ainst an% output ta/ liabilit%A and ? filin# the clai$ "ithin the t"o5%ear

prescriptive period under Section ))( of the '((+ Ta/ !ode.''

Hence, this Petition.')

T% I**u%

Petitioner raises this sole issue for our consideration6

hether or not respondent is entitled to the refund or issuance of ta/ credit certificate in the

a$ount ofP,-++,'4).); as alle#ed unutili0ed input ta/es paid on do$estic purchase of

capital #oods and services for the period coverin# Fanuar% ' to Fune -4, '((+.'-

T% Cou#@* Rul'

The Petition has no $erit.

Sol% I**u%>

Entitlement to Refund

To support the issue raised, petitioner advances the follo"in# ar#u$ents6

I. The !ourt of *ppeals erred in not holdin# that respondent bein# re#istered "ith the

Philippine cono$ic one *uthorit% >P*? as an KeLco0one KeL/port KeLnterprise, its

business is not sub@ect to V*T pursuant to Section ) of Republic *ct No. +('; in relation to

Section '4- >no" Sec. '4(? of the Ta/ !ode, as a$ended b% R.*. ++';.

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II. The !ourt of *ppeals erred in not holdin# that since respondent is QMPT fro$ Value5

*dded Ta/ >V*T?, the capital #oods and services it purchased are considered not used in

V*T ta/able business, hence, is not allo"ed an% ta/ creditrefund on V*T input ta/ previousl%

paid on such capital #oods pursuant to Section .'4;5' of Revenue Re#ulations No. +5(:,

and of input ta/es paid on services pursuant to Section .'4-5' of the sa$e re#ulations.

III. The !ourt of *ppeals erred in not holdin# that ta/ refunds bein# in the nature of ta/

e/e$ptions are construed stri"tissimi #uris a#ainst clai$ants.'

These issues have previousl% been addressed b% this !ourt in Commissioner of Internal Revenue v.

oshiba Information $%uipment &Phils.',': Commissioner of Internal Revenue v. Cebu o(o

Corporation,'; andCommissioner of Internal Revenue v. )eagate e"hnolog( &Philippines'.'+

*n entit% re#istered "ith the P* as an eco0one'= $a% be covered b% the V*T s%ste$. Section )-

of Republic *ct +(';, as a$ended, #ives a P*5re#istered enterprise the option to choose

bet"een t"o fiscal incentives6 a? a five percent preferential ta/ rate on its #ross inco$e under the

said la"A or b? an inco$e ta/ holida% provided under /ecutive Order No. )); or the O$nibusInvest$ent !ode of '(=+, as a$ended. If the entit% avails itself of the five percent preferential ta/

rate under the first sche$e, it is e/e$pt fro$ all ta/es, includin# the V*TA'( under the second, it is

e/e$pt fro$ inco$e ta/es for a nu$ber of %ears, )4 but not fro$ other national internal revenue ta/es

li&e the V*T.)'

The !* and !T* found that respondent had availed itself of the fiscal incentive of an inco$e ta/

holida% under /ecutive Order No. ));. This !ourt respects that factual findin#. *bsent a sufficient

sho"in# of error, findin#s of the !T* as affir$ed b% the !* are dee$ed conclusive.)) Moreover, a

perusal of the pleadin#s and supportin# docu$ents before us indicates that "hen it re#istered as a

V*T5entit% 55 a fact ad$itted b% the parties 55 respondent intended to avail itself of the inco$e ta/

holida%.)-

Veril%, bein# a 9uestion of fact, the t%pe of fiscal incentive chosen cannot be a sub@ect ofthis Petition, "hich should raise onl% 9uestions of la".

1% availin# itself of the inco$e ta/ holida%, respondent beca$e sub@ect to the V*T. It correctl%

re#istered as a V*T ta/pa%er, because its transactions "ere not V*T5e/e$pt.

Notabl%, "hile an eco0one is #eo#raphicall% "ithin the Philippines, it is dee$ed a separate custo$s

territor%) and is re#arded in la" as forei#n soil.): Sales b% suppliers fro$ outside the borders of the

eco0one to this separate custo$s territor% are dee$ed as e/ports); and treated as e/port

sales.)+ These sales are 0ero5rated or sub@ect to a ta/ rate of 0ero percent.)=

Not"ithstandin# the fact that its purchases should have been 0ero5rated, respondent "as able toprove that it had paid input ta/es in the a$ount of P,-++,'4).);. The !T* found, and the !*

affir$ed, that this a$ount "as substantiall% supported b% invoices and Official ReceiptsA)( and

petitioner has not challen#ed the co$putation. *ccordin#l%, this !ourt upholds the findin#s of the

!T* and the !*.

On the other hand, since '44 percent of the products of respondent are e/ported, -4 all its

transactions are dee$ed e/port sales and are thus V*T 0ero5rated. It has been sho"n that

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respondent has no output ta/ "ith "hich it could offset its paid input ta/.-' Since the sub@ect input ta/

it paid for its do$estic purchases of capital #oods and services re$ained unutili0ed, it can clai$ a

refund for the input V*T previousl% char#ed b% its suppliers.-) The a$ount ofP,-++,'4).); is e/cess

input ta/es that @ustif% a refund.

;Ta/ !ode? then prevailin# at the ti$e of the sale. The

!ourt of Ta/ *ppeals >!T*? and the !ourt of *ppeals co$$onl% ruled that the sale is not sub@ect to

V*T. e affir$, thou#h on a $ore une9uivocal rationale than that utili0ed b% the rulin#s under

revie". The fact that the sale "as not in the course of the trade or business of ND! is sufficient in

itself to declare the sale as outside the covera#e of V*T.

The facts are culled pri$aril% fro$ the rulin# of the !T*.

Pursuant to a #overn$ent pro#ra$ of privati0ation, ND! decided to sell to private enterprise all of its

shares in its "holl%5o"ned subsidiar% the National Marine !orporation >NM!?. The ND! decided to

sell in one lot its NM! shares and five >:? of its ships, "hich are -,+44 DT T"een5Dec&er,

loec&ner t%pe vessels.' The vessels "ere constructed for the ND! bet"een '(=' and '(=, then

initiall% leased to Eu0on Stevedorin# !o$pan%, also its "holl%5o"ned subsidiar%. Subse9uentl%, the

vessels "ere transferred and leased, on a bareboat basis, to the NM!.)

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VAT cases

The NM! shares and the vessels "ere offered for public biddin#. *$on# the stipulated ter$s and

conditions for the public auction "as that the "innin# bidder "as to pa% a value added ta/ of '48

on the value of the vessels.- On - Fune '(==, private respondent Ma#sa%sa% Eines, Inc.

>Ma#sa%sa% Eines? offered to bu% the shares and the vessels for P';=,444,444.44. The bid "as

$ade b% Ma#sa%sa% Eines, purportedl% for a ne" co$pan% still to be for$ed co$posed of itself,

1ali"a# Navi#ation, Inc., and 3IM Ei$ited of the Marden 2roup based in Hon#&on# >collectivel%,private respondents?. The bid "as approved b% the !o$$ittee on Privati0ation, and a Notice of

*"ard dated ' Ful% '(== "as issued to Ma#sa%sa% Eines.

On )= Septe$ber '(==, the i$ple$entin# !ontract of Sale "as e/ecuted bet"een ND!, on one

hand, and Ma#sa%sa% Eines, 1ali"a# Navi#ation, and 3IM Ei$ited, on the other. Para#raph ''.4) of

the contract stipulated that KvLalue5added ta/, if an%, shall be for the account of the

PCR!H*SR.: Per arran#e$ent, an irrevocable confir$ed Eetter of !redit previousl% filed as

bidders bond "as accepted b% ND! as securit% for the pa%$ent of V*T, if an%. 1% this ti$e, a for$al

re9uest for a rulin# on "hether or not the sale of the vessels "as sub@ect to V*T had alread% been

filed "ith the 1ureau of Internal Revenue >1IR? b% the la" fir$ of S%cip Sala0ar Hernande0

2at$aitan, presu$abl% in behalf of private respondents. Thus, the parties a#reed that should nofavorable rulin# be received fro$ the 1IR, ND! "as authori0ed to dra" on the Eetter of !redit upon

"ritten de$and the a$ount needed for the pa%$ent of the V*T on the stipulated due date, )4

Dece$ber '(==.;

In Fanuar% of '(=(, private respondents throu#h counsel received V*T Rulin# No. :;=5== dated '

Dece$ber '(== fro$ the 1IR, holdin# that the sale of the vessels "as sub@ect to the '48 V*T. The

rulin# cited the fact that ND! "as a V*T5re#istered enterprise, and thus its transactions incident to

its nor$al V*T re#istered activit% of leasin# out personal propert% includin# sale of its o"n assets

that are $ovable, tan#ible ob@ects "hich are appropriable or transferable are sub@ect to the '48

KV*TL.+

Private respondents $oved for the reconsideration of V*T Rulin# No. :;=5==, as "ell as V*T Rulin#

No. -(:5== >dated '= *u#ust '(==?, "hich $ade a si$ilar rulin# on the sale of the sa$e vessels in

response to an in9uir% fro$ the !hair$an of the Senate 1lue Ribbon !o$$ittee. Their $otion "as

denied "hen the 1IR issued V*T Rulin# Nos. 44+5=( dated ) 3ebruar% '(=(, reiteratin# the earlier

V*T rulin#s. *t this point, ND! dre" on the Eetter of !redit to pa% for the V*T, and the a$ount

of P':,')4,444.44 in ta/es "as paid on '; March '(=(.

On '4 *pril '(=(, private respondents filed an *ppeal and Petition for Refund "ith the !T*, follo"ed

b% a Supple$ental Petition for Revie" on ' Ful% '(=(. The% pra%ed for the reversal of V*T Rulin#s

No. -(:5==, :;=5== and 44+5=(, as "ell as the refund of the V*T pa%$ent $ade a$ountin#

to P':,')4,444.44.=

The !o$$issioner of Internal Revenue >!IR? opposed the petition, first ar#uin#that private respondents "ere not the real parties in interest as the% "ere not the transferors or

sellers as conte$plated in Sections (( and '44 of the then Ta/ !ode. The !IR also s9uarel%

defended the V*T rulin#s holdin# the sale of the vessels liable for V*T, especiall% citin# Section - of

Revenue Re#ulation No. :5=+ >R.R. No. :5=+?, "hich provided that KV*TL is i$posed on an% sale or

transactions dee$ed sale of ta/able #oods >includin# capital #oods, irrespective of the date of

ac9uisition?. The !IR ar#ued that the sale of the vessels "ere a$on# those transactions dee$ed

sale, as enu$erated in Section of R.R. No. :5=+. It see$s that the !IR particularl% e$phasi0ed

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Section >?>i? of the Re#ulation, "hich classified chan#e of o"nership of business as a

circu$stance that #ave rise to a transaction dee$ed sale.

In a Decision dated )+ *pril '((), the !T* re@ected the !IRs ar#u$ents and #ranted the

petition.( The !T* ruled that the sale of a vessel "as an isolated transaction, not done in the

ordinar% course of ND!s business, and "as thus not sub@ect to V*T, "hich under Section (( of theTa/ !ode, "as applied onl% to sales ' % -ou#*% o #)% o# u*'%**. The !T* further held that

the sale of the vessels could not be dee$ed sale, and thus sub@ect to V*T, as the transaction did

not fall under the enu$eration of transactions dee$ed sale as listed either in Section '44>b? of the

Ta/ !ode, or Section of R.R. No. :5=+. 3inall%, the !T* ruled that an% case of doubt should be

resolved in favor of private respondents since Section (( of the Ta/ !ode "hich i$ple$ented V*T is

not an e/e$ption provision, but a classification provision "hich "arranted the resolution of doubts in

favor of the ta/pa%er.

The !IR appealed the !T* Decision to the !ourt of *ppeals,'4 "hich on '' March '((+, rendered a

Decision reversin# the !T*.'' hile the appellate court a#reed that the sale "as an isolated

transaction, not $ade in the course of ND!s re#ular trade or business, it nonetheless found that thetransaction fell "ithin the classification of those dee$ed sale under R.R. No. :5=+, since the sale of

the vessels to#ether "ith the NM! shares brou#ht about a chan#e of o"nership in NM!. The !ourt

of *ppeals also applied the principle #overnin# ta/ e/e$ptions that such should be strictl% construed

a#ainst the ta/pa%er, and liberall% in favor of the #overn$ent.')

Ho"ever, the !ourt of *ppeals reversed itself upon reconsiderin# the case, throu#h a Resolution

dated : 3ebruar% )44'.'- This ti$e, the appellate court ruled that the chan#e of o"nership of

business as conte$plated in R.R. No. :5=+ $ust be a conse9uence of the retire$ent fro$ or

cessation of business b% the o"ner of the #oods, as provided for in Section '44 of the Ta/ !ode.

The !ourt of *ppeals also a#reed "ith the !T* that the classification of transactions dee$ed sale

"as a classification statute, and not an e/e$ption statute, thus "arrantin# the resolution of an%doubt in favor of the ta/pa%er .'

To the $ind of the !ourt, the ar#u$ents raised in the present petition have alread% been ade9uatel%

discussed and refuted in the rulin#s assailed before us. videntl%, the petition should be denied. et

the !ourt finds that Section (( of the Ta/ !ode is sufficient reason for upholdin# the refund of V*T

pa%$ents, and the subse9uent dis9uisitions b% the lo"er courts on the applicabilit% of Section '44 of

the Ta/ !ode and Section of R.R. No. :5=+ are ulti$atel% irrelevant.

* brief reiteration of the basic principles #overnin# V*T is in order. V*T is ulti$atel% a ta/ on

consu$ption, even thou#h it is assessed on $an% levels of transactions on the basis of a fi/ed

percenta#e.':

It is the end user of consu$er #oods or services "hich ulti$atel% shoulders the ta/, asthe liabilit% therefro$ is passed on to the end users b% the providers of these #oods or

services'; "ho in turn $a% credit their o"n V*T liabilit% >or input V*T? fro$ the V*T pa%$ents the%

receive fro$ the final consu$er >or output V*T?.'+ The final purchase b% the end consu$er

represents the final lin& in a production chain that itself involves several transactions and several

acts of consu$ption. The V*T s%ste$ assures fiscal ade9uac% throu#h the collection of ta/es on

ever% level of consu$ption,'= %et assua#es the $anufacturers or providers of #oods and services b%

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enablin# the$ to pass on their respective V*T liabilities to the ne/t lin& of the chain until finall% the

end consu$er shoulders the entire ta/ liabilit%.

et V*T is not a sin#ular5$inded ta/ on ever% transactional level. Its assess$ent bears direct

relevance to the ta/pa%ers role or lin& in the production chain. Hence, as affir$ed b% Section (( of

the Ta/ !ode and its subse9uent incarnations,

'(

the ta/ is levied onl% on the sale, barter or e/chan#eof #oods or services b% persons "ho en#a#e in such activities, ' % -ou#*% o #)% o# u*'%**.

These transactions outside the course of trade or business $a% invariabl% contribute to the

production chain, but the% do so onl% as a $atter of accident or incident. *s the sales of #oods or

services do not occur "ithin the course of trade or business, the providers of such #oods or services

"ould hardl%, if at all, have the opportunit% to appropriatel% credit an% V*T liabilit% as a#ainst their

o"n accu$ulated V*T collections since the accu$ulation of output V*T arises in the first place onl%

throu#h the ordinar% course of trade or business.

That the sale of the vessels "as not in the ordinar% course of trade or business of ND! "as

appreciated b% both the !T* and the !ourt of *ppeals, the latter doin# so even in its first decision

"hich it eventuall% reconsidered.

)4

e cite "ith approval the !T*s e/planation on this point6

In I$%#)l 7. Coll%-o# o I'%#')l R%7%'u%, 2.R. No. E5+(), Septe$ber -4, '(:: >(+

Phil. (()?, the ter$ carr%in# on business does not $ean the perfor$ance of a sin#le

disconnected act, but $eans conductin#, prosecutin# and continuin# business b% perfor$in#

pro#ressivel% all the acts nor$all% incident thereofA "hile o' u*'%** conve%s the idea

of business bein# done, not fro$ ti$e to ti$e, but all the ti$e. KF. *ranas, CPD*TD

N*TION*E INTRN*E RVNC !OD >ITH *NNOT*TIONS?, p. ;4=5( >'(==?L.

Cou#*% o u*'%** is "hat is usuall% done in the $ana#e$ent of trade or business. KI$

7. ;%%&* B Ru**%l, (( So. +;', +;, '-: Miss. ;:, cited in ords Phrases, Vol. '4,

>'(=?L.

hat is clear therefore, based on the aforecited @urisprudence, is that course of business or

doin# business connotes re#ularit% of activit%. In the instant case, the sale "as an isolated

transaction. The sale "hich "as involuntar% and $ade pursuant to the declared polic% of

2overn$ent for privati0ation could no lon#er be repeated or carried on "ith re#ularit%. It

should be e$phasi0ed that the nor$al V*T5re#istered activit% of ND! is leasin# personal

propert%.)'

This findin# is confir$ed b% the Revised !harter )) of the ND! "hich bears no indication that the

ND! "as created for the pri$ar% purpose of sellin# real propert%.)-

The conclusion that the sale "as not in the course of trade or business, "hich the !IR does notdispute before this !ourt,) should have definitivel% settled the $atter. *n% sale, barter or e/chan#e

of #oods or services 'o ' % -ou#*% o #)% o# u*'%** is not sub@ect to V*T.

Section '44 of the Ta/ !ode, "hich is i$ple$ented b% Section >?>i? of R.R. No. :5=+ no" relied

upon b% the !IR, is captioned Value5added ta/ on sale of #oods, and it e/pressl% states that

KtLhere shall be levied, assessed and collected on ever% sale, barter or e/chan#e of #oods, a value

added ta/ / / /. Section '44 should be read in li#ht of Section ((, "hich la%s do"n the #eneral rule

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VAT cases

on "hich persons are liable for V*T in the first place and on "hat transaction if at all. It $a% even be

noted that Section (( is the ver% first provision in Title IV of the Ta/ !ode, the Title that covers V*T in

the la". 1efore an% portion of Section '44, or the rest of the la" for that $atter, $a% be applied in

order to sub@ect a transaction to V*T, it $ust first be satisfied that the ta/pa%er and transaction

involved is liable for V*T in the first place under Section ((.

It "ould have been a different $atter if Section '44 purported to define the phrase in the course of

trade or business as e/pressed in Section ((. If that "ere so, reference to Section '44 "ould have

been necessar% as a $eans of ascertainin# "hether the sale of the vessels "as in the course of

trade or business, and thus sub@ect to

V*T. 1ut that is not the case. hat Section '44 and Section >?>i? of R.R. No. :5=+ elaborate on is

not the $eanin# of in the course of trade or business, but instead the identification of the

transactions "hich $a% be dee$ed as sale. It "ould beco$e necessar% to ascertain "hether under

those t"o provisions the transaction $a% be dee$ed a sale, onl% if it is settled that the transaction

occurred in the course of trade or business in the first place. If the transaction transpired outside the

course of trade or business, it "ould be irrelevant for the purpose of deter$inin# V*T liabilit%"hether the transaction $a% be dee$ed sale, since it an%"a% is not sub@ect to V*T.

*ccordin#l%, the !ourt rules that #iven the undisputed findin# that the transaction in 9uestion "as not

$ade in the course of trade or business of the seller, ND! that is, the sale is not sub@ect to V*T

pursuant to Section (( of the Ta/ !ode, no $atter ho" the said sale $a% he" to those transactions

dee$ed sale as defined under Section '44.

In an% event, even if Section '44 or Section of R.R. No. :5=+ "ere to find application in this case,

the !ourt finds the discussions offered on this point b% the !T* and the !ourt of *ppeals >in its

subse9uent Resolution? essentiall% correct. Section >?>i? of R.R. No. :5=+ does classif% as a$on#

the transactions dee$ed sale those involvin# chan#e of o"nership of business. Ho"ever, Section>? of R.R. No. :5=+, reflectin# Section '44 of the Ta/ !ode, clarifies that such chan#e of

o"nership is onl% an attendin# circu$stance to retire$ent fro$ or cessation of businessK, L "ith

respect to all #oods on hand KasL of the date of such retire$ent or cessation.): Indeed, Section >?

of R.R. No. :5=+ e/pressl% characteri0es the chan#e of o"nership of business as onl% a

circu$stance that attends those transactions dee$ed sale, "hich are other"ise stated in the

sa$e section.);

HR3OR, the petition is DNID. No costs.

SO ORDRD.

Quisumbing, Chairman, Carpio, Carpio-Morales, elas"o, !r., !.!., concur.

COMMISSIONER OF INTERNAL

REVENUE,

Petitioner,

G.R. No. 149834

Present

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VAT cases

!"ers#s!

TRUST$ORT%& PA$NS%OP,

INC.,

Res'on(ent.

)PUNO, J ., C*+ir'erson,

SANOVAL!GUTIERRE-,

CORONA,

A-CUNA, +n(

GARCIA, JJ.

Pro#/0+te(

M+ 2, 2

5!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!5

ECISION

SANOVAL!GUTIERRE-, J .

At 6+r is + Petition 7or Re"ie on Certior+ri #n(er R#/e 4 o7 t*e 199: R#/es

o7 Ci"i/ Pro;e(#re, +s +en(e(, +ss+i/in0 t*e e;ision res'on(ent P+ns*o'? is + (oesti;

;or'or+tion en0+0e( in t*e '+ns*o' 6#siness.

On M+r;* 11, 1991, t*e Coissioner o7 Intern+/ Re"en#e >CIR? iss#e(

Re"en#e Meor+n(# Or(er >RMO? No. 1!91, ;/+ssi7in0 t*e '+ns*o'

6#siness +s @+in to t*e /en(in0 in"estorBs 6#siness +;ti"it +n( s#6De;tin0 6ot* tot*e /en(in0 in"estorBs t+5 6+se( on t*eir 0ross in;oe, '#rs#+nt to t*en Se;tion

11 o7 t*e N+tion+/ Intern+/ Re"en#e Co(e >NIRC? o7 19::, +s +en(e(.

T*is RMO +s ;/+ri7ie( 6 Re"en#e Meor+n(# Cir;#/+r >RMC? No. 43!

91 (+te( M+ 2:, 1991, +n(+tin0 inter alia t*+t '+ns*o' o'er+tors @s*+//

6e;oe /i+6/e to t*e /en(in0 in"estorBs t+5 on t*eir 0ross in;oe 6e0innin0

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VAT cases

+n#+r 1, 1991 t*+t @>s?in;e t*e (e+(/ine 7or t*e 7i/in0 o7 'er;ent+0e t+5 ret#rn

+n( t*e '+ent o7 t*e t+5 on /en(in0 in"estors ;o"erin0 t*e 7irst H#+rter o7 1991

*+s +/re+( /+'se(, t+5'+ers +re 0i"en #' to #ne 3, 1991 it*in *i;* to '+ t*e

s+i( t+5 it*o#t 'en+/t t*+t i7 t*e t+5 is '+i( +7ter s+i( (+te, @t*e ;orres'on(in0

'en+/ties s*+// 6e +ssesse( +n( ;o'#te( 7ro A'ri/ 21, 1991 +n( t*+t sin;e '+ns*o's +re ;onsi(ere( /en(in0 in"estors, t*e +re +/so s#6De;t to (o;#ent+r

st+' t+5es.

P#rs#+nt to t*ese iss#+n;es, t*e #re+# o7 Intern+/ Re"en#e >IR?, Re"en#e

Re0ion No. :, Ce6# Cit, iss#e( Assessent Noti;e No. 81!PT!13!94!9:!!:3,

(+te( #ne 13, 199:, +0+inst res'on(ent P+ns*o' (e+n(in0 '+ent o7

(e7i;ien; 'er;ent+0e t+5 7or t*e e+r 1994 +o#ntin0 to P2,18,33.19, in;/#si"e

o7 s#r;*+r0es +n( interests. In +((ition to t*+t +o#nt, + ;o'roise 'en+/to7 P93,. +s +/so i'ose(.

Fee/in0 +00rie"e(, res'on(ent P+ns*o', on #/ 4, 199:, 7i/e( it* t*e

Re"en#e Re0ion No. : +n +(inistr+ti"e 'rotest, +//e0in0 t*+t + '+ns*o' 6#siness

is (i77erent 7ro + lending investor’s 6#siness, *en;e, s*o#/( not 6e s#6De;te( to

t*e /en(in0 in"estorBs t+5.

Its 'rotest not *+"in0 6een +;te( #'on, res'on(ent P+ns*o' e/e"+te( t*e

+tter to t*e O77i;e o7 'etitioner CIR.

On O;to6er 12, 1998, 'etitioner CIR iss#e( + +rr+nt o7 /e"

+n(Jor (istr+int +0+inst res'on(ent P+ns*o', *i;* +;t +s ;onsi(ere( + 7in+/

(e;ision (enin0 t*e /+tterBs 'rotest.


18/22

VAT cases

/en(in0 in"estorBs t+5, +re *ere6 (e;/+re( NULL and VOID 7or 6ein0

;ontr+r to /+ +n( t*e Constit#tion. A;;or(in0/, Assessent Noti;e

No. 81!PT!13!94!9:!!:3, (+te( #ne 13, 199:, is

/ieise CANCELLED and SET ASIDE.

SO ORERE.

T*e CTA r#/e(, +on0 ot*ers, t*+t 7or t+5+tion '#r'oses, + '+ns*o'

6#siness ;+nnot 6e ;/+ssi7ie( +s + lending investor +s 6ot* +re s#6De;t to (i77erent

t+5 tre+tents. T*#s, t*e + not 6e tre+te( +/ie 7or t*e '#r'ose o7 i'osin0

t*e /en(in0 in"estorBs t+5.

On M+ 24, 2, t*e CTA /ieise (enie( 'etitioner CIRBs Motion 7or

Re;onsi(er+tion.


19/22

VAT cases

$e #'*o/( t*e ;*+//en0e( e;ision o7 t*e Co#rt o7 A''e+/s +77irin0 t*+t o7

t*e CTA. T*e H#estion r+ise( 7or o#r reso/#tion is not + no"e/ one.

In Commissioner of Internal Revenue v. Michael J. Lhuillier Pawnshop,((? +n( >77? o7 t*e

NIRC o7 198, pawnshops and lending investors were sube!ted to

di""erent ta# treat$ents% thus

>3? Other Fied !aes. T*e 7o//oin0 7i5e( t+5es s*+// 6e

;o//e;te( +s 7o//os, t*e +o#nt st+te( 6ein0 7or t*e *o/e e+r, *en

not ot*erise s'e;i7ie(

5 5 5

>((? Lending Investors

1. In ;*+rtere( ;ities +n( 7irst ;/+ss #ni;i'+/ities, one

t*o#s+n( 'esos

2. In se;on( +n( t*ir( ;/+ss #ni;i'+/ities, 7i"e

*#n(re( 'esos

3. In 7o#rt* +n( 7i7t* ;/+ss #ni;i'+/ities +n(

#ni;i'+/ (istri;ts, to *#n(re( 7i7t 'esos Provided , T*+t

/en(in0 in"estors *o (o 6#siness +s s#;* in ore t*+n one

'ro"in;e s*+// '+ + t+5 o7 one t*o#s+n( 'esos.

5 5 5

>77? &awnshops, one t*o#s+n( 'esos.

"econd . Congress never intended pawnshops to be treated in

the sa$e wa' as lending investors. Se;tion 11 o7 t*e NIRC o7 19::,

+s ren#6ere( +n( re+rr+n0e( 6 E.O. No. 2:3, +s 6+si;+// /i7te(

7ro Se;tion 1: >7orer/ Se;. 29, NIRC o7 19::, +s +en(e( 6

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VAT cases

P.. 1:39, Se't. 1:, 198? o7 t*e NIRC o7 198, whi!h treated both

ta# sube!ts di""erentl'. Se;tion 1: o7 t*e /+tter Co(e re+(s +s

7o//os

Se;. 1:. Percentage ta on dealers in securities# lending

investors. e+/ers in se;#rities s*+// '+ + t+5 eH#i"+/ent to si5 'er;ent >? o7 t*eir 0ross in;oe. Lending investorss*+// '+ + t+5

eH#i"+/ent to 7i"e 'er;ent >? o7 t*eir 0ross in;oe. >As +en(e( 6

P.. No. 1:39, P.. No. 199, +n( P.. No. 1994?.

(e note that the de"inition o" lending investors "ound in

Se!tion )*+ ,u- o" the NIC o" )/01 is not "ound in the NIC o"

)/++% as a$ended b' E.O. No. 2+3% where Se!tion ))1 invo4ed b'

the CI is "ound. 5owever% as e$phasi6ed earlier% both the NIC

o" )/01 and NIC o" )/++ dealt with pawnshops and lending

investors di""erentl'. Veril' then% it was the intent o" Congress to

deal with both sube!ts di""erentl'. 5en!e% we $ust li4ewise

interpret the statute to !on"or$ to su!h legislative intent.

!hird . Se!tion ))1 o" the NIC o" )/++% as a$ended b' E.O.No. 2+3% sube!ts to per!entage ta# dealers in se!urities and lending

investors onl'. There is no $ention o" pawnshops. Under the

$a#i$ expressio unius est exclusio alterius% the $ention o" one thing

i$plies the e#!lusion o" another thing not $entioned. Thus% i" a

statute enu$erates the things upon whi!h it is to operate%

ever'thing else $ust ne!essaril' and b' i$pli!ation be e#!luded

"ro$ its operation and e""e!t >$era v. Fernande%# L!3134, M+r;* 3,19:9, 89 SCRA 199, 23?. This rule% as a guide to probable

legislative intent% is based upon the rules o" logi! and natural

wor4ings o" the hu$an $ind > Repu&lic v. 'sten%o# L!33:,

Se'te6er 11, 198, 99 SCRA 1, ?.

Fourth. The 7I had ruled several ti$es prior to the issuan!e

o" 8O No. )*9/) and 8C No. :39/) that pawnshops were not

sube!t to the *; per!entage ta# i$posed b' Se!tion ))1 o" the

NIC o" )/++% as a$ended b' E.O. No. 2+3. This was even

ad$itted b' the CI in 8O No. )*9/) itsel". Considering thatSe!tion ))1 o" the NIC o" )/++% as a$ended% was pra!ti!all' li"ted

"ro$ Se!tion )+* o" the NIC o" )/01% as a$ended% and there being

no !hange in the law% the interpretation thereo" should not have

been altered.

5 5 5


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VAT cases

5 5 5 .A. No. ++)1 > (n (ct Restructuring the $alue)added !a

*$(!+ ",stem# -idening Its !a ase and 'nhancing Its (dministrative#

and for !hese Purposes (mending and Repealing the Relevant

Provisions of the /ational Internal Revenue Code# as amended# and for

Other Purposes.? repealed Se!tion ))1 o" NIC o" )/++% as a$ended%

whi!h was the basis o" 8O No. )*9/) and 8C No. :39/), t*#s

5 5 5

Sin!e Se!tion ))1 o" the NIC o" )/++% whi!h breathed li"e on

the


22/22

VAT cases

J. Lhuillier Pawnshop to t*e inst+nt ;+se. On;e + ;+se *+s 6een (e;i(e( one +,

+n ot*er ;+se in"o/"in0 e5+;t/ t*e s+e 'oint +t iss#e, +s in t*e ;+se +t 6+r,

s*o#/( 6e (e;i(e( in t*e s+e +nner .

vat cases january 26 2015

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