Escolar Documentos
Profissional Documentos
Cultura Documentos
*
G.R. No. 149073. February 16, 2005.
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* FIRST DIVISION.
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put tax) and the seller is not allowed any tax credit on VAT (input
tax) previously paid; A VAT-registered purchaser of goods,
properties or services that are VAT-exempt, is not entitled to any
input tax on such purchases despite the issuance of a VAT invoice
or receipt.—Taxable transactions are those transactions which are
subject to value-added tax either at the rate of ten percent (10%)
or zero percent (0%). In taxable transactions, the seller shall be
entitled to tax credit for the value-added tax paid on purchases
and leases of goods, properties or services. An exemption means
that the sale of goods, properties or services and the use or lease
of properties is not subject to VAT (output tax) and the seller is
not allowed any tax credit on VAT (input tax) previously paid. The
person making the exempt sale of goods, properties or services
shall not bill any output tax to his customers because the said
transaction is not subject to VAT. Thus, a VAT-registered
purchaser of goods, properties or services that are VAT-exempt, is
not entitled to any input tax on such purchases despite the
issuance of a VAT invoice or receipt.
Same; Same; Under the value-added tax system, a zero-rated
sale by a VAT-registered person, which is a taxable transaction for
VAT purposes, shall not result in any output tax, but the input tax
on his purchase of goods, properties or services related to such
zero-rated sale shall be available as tax credit or refund.—Now,
having determined that respondent is engaged in taxable
transactions subject to VAT, let us then proceed to determine
whether it is subject to 10% or zero (0%) rate of VAT. To begin
with, it must be recalled that generally, sale of goods and supply
of services performed in the Philippines are taxable at the rate of
10%. However, export sales, or sales outside the Philippines, shall
be subject to value-added tax at 0% if made by a VAT-registered
person. Under the value-added tax system, a zero-rated sale by a
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QUISUMBING, J.:
1
In its Decision dated July 6, 2001, the Court of Appeals, in
CA-G.R. 2SP No. 60304, affirmed 3
the Resolutions dated May
31, 2000 and August 2, 2000, of the Court of Tax Appeals
(CTA) ordering the Commissioner of Internal Revenue
(CIR) to allow a partial refund or, alternatively, to issue a
tax credit certificate in favor of Cebu Toyo Corporation in
the sum of P2,158,714.46, representing the unutilized
input value-added tax (VAT) payments.
The facts, as culled from the records, are as follows:
Respondent Cebu Toyo Corporation is a domestic
corporation engaged in the manufacture of lenses and
various optical components used in television sets,
cameras, compact discs and other similar devices. Its
principal office is located at the Mactan Export Processing
Zone (MEPZ) in Lapu-Lapu City, Cebu. It is a subsidiary of
Toyo Lens Corporation, a non-resident corporation
organized under the laws of Japan. Respondent is a zone
export enterprise registered with the Philippine Economic
Zone Authority (PEZA), pursuant
4
to the provisions of
Presidential Decree No. 66. It is also registered with 5
the
Bureau of Internal Revenue (BIR) as a VAT taxpayer.
As an export enterprise, respondent sells 80% of its
products to its mother corporation, the Japan-based Toyo
Lens Corporation, pursuant to an Agreement of Offsetting.
The rest are sold to various enterprises doing business in
the MEPZ.
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(1) The sale and actual shipment of goods from the Philippines to a
foreign country, irrespective of any shipping arrangement that
may be agreed upon which may influence or determine the
transfer of ownership of the goods so exported and paid for in
acceptable foreign currency or its equivalent in goods or services,
and accounted for in accordance with the rules and regulations of
the Bangko Sentral ng Pilipinas (BSP);
(2) Sale of raw materials or packaging materials to a nonresident
buyer for delivery to a resident local export-oriented enterprise to
be used in manufacturing, processing, packing or repacking in the
Philippines of the said buyer’s goods and paid for in acceptable
foreign currency and accounted for in accordance with the rules
and regulations of the Bangko Sentral ng Pilipinas (BSP);
(3) Sale of raw materials or packaging materials to export-oriented
enterprise whose export sales exceed seventy percent (70%) of total
annual production;
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8 CA Rollo, p. 60.
454
“SO ORDERED.”
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11 Should be P2,158,714.52.
12 Rollo, p. 29.
13 SEC. 24. Exemption from Taxes Under the National Internal Revenue
Code.—Any provision of existing laws, rules and regulations to the
contrary notwithstanding, no taxes, local and national, shall be imposed
on business establishments operating within the
456
14 15
Act No. 7916, as amended by Rep. Act No. 8748. Thus,
since respondent was not subject to VAT, the
Commissioner contended that the capital goods it
purchased must be deemed not used in VAT taxable
business and therefore it was not entitled to refund of input
taxes on such capital goods pursuant
16
to Section 4.106-1 of
Revenue Regulations No. 7-95.
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17 Rollo, p. 31.
18 SEC. 23. Fiscal Incentives.—Business establishments operating
within the ECOZONES shall be entitled to the fiscal incentives as
provided for under Presidential Decree No. 66, the law creating the Export
Processing Zone Authority, or those provided under Book VI of Executive
Order No. 226, otherwise known as the Omnibus Investment Code of
1987.
Furthermore, tax credits for exporters using local materials as inputs
shall enjoy the same benefits provided for in the Export Development Act
of 1994.
458
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19 Rollo, p. 25.
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20 Id., at p. 13.
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(q) Transactions which are exempt under international agreements to which the
Philippines is a signatory or under special laws, except those under Presidential
Decree Nos. 66, 529 and 1590;
...
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seller is not allowed any tax credit on VAT (input tax) previously paid.
The person making the exempt sale of goods, properties or services
shall not bill any output tax to his customers because the saidz
transaction is not subject to VAT. On the other hand, a VAT-registered
purchaser of VAT-exempt goods/properties or services which are exempt
from VAT is not entitled to any input tax on such purchase despite the
issuance of a VAT invoice or receipt.
461
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25 Supra, note 6.
26 See Revenue Regulations No. 7-95, Section 4.102-2.
27 CA Rollo, p. 36.
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464
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