MAMERTO C. CORRE, Plaintiff-Appellant, vs. GUADALUPE TAN CORRE, Defendant-Appellee. [G.R. No. L-10128. November 13, 19 !.

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#$%&s' The Plaintiff is a resident of Las Vegas, Nevada, U. S. A. while the Defendant is a resident of the municipality of Cat alogan, province of Samar. Such eing the case, Plaintiff has no choice other than to file the action in the court of first instance of the latter province. (ss)e' !hether or not the fact that Defendant was so"ourning in #asay at the time he was served with summons ma$e him a resident of that place for purposes of venue. *e+,' The allegation that the Plaintiff %for the purpose of filing and maintaining this suit, temporarily resides at &'( #altoc, Santa )esa, )anila* cannot serve as asis for the purpose of determining the venue for that is not the residence contemplated y the rule. +f that were allowed, we would create a situation where a person may have his residence in one province and, to suit his convenience, or to harass the Defendant, may ring the action in the court of any other province. That cannot e the intendment of the rule. +ndeed, residence as used in said rule is synonymous with domicile. This is define as %the permanent home, the place to which, whenever a sent for usiness or pleasure, one intends to return, and depends on facts and circumstances, in the sense that they disclose intent*. %,esidence is -the permanent home, the place to which, whenever a sent for usiness or pleasure, one intends to return.*

)ines 5)ines6. +an )urray Statt 5Statt6, the appointed ancillary administrator of his estate filed an estate and inheritance ta7 return. 0e made a preliminary return to secure the waiver of the C+, on the inheritance of the )ines shares of stoc$. +n 12&3, /eatrice assigned all her rights and interests in the estate to the spouses 8isher. Statt filed an amended estate and inheritance ta7 return claiming A99+T+:ANL ;<;)#T+:NS, one of which is the estate and inheritance ta7 on the )ines= shares of stoc$ pursuant to a re%-/ro%-&0 proviso in the N+,C, hence, warranting a refund from what he initially paid. The collector denied the claim. 0e then filed in the C8+ of )anila for the said amount.

C8+ ruled that 5a6 the > share of /eatrice should e deducted from the net estate of !alter, 5 6 the intangi le personal property elonging to the estate of !alter is e7empt from inheritance ta7 pursuant to the reciprocity proviso in N+,C.

(ss)e' !hether or not the estate can avail itself of the reciprocity proviso in the N+,C granting e7emption from the payment of ta7es for the )ines shares of stoc$.

R)+-12' No. ,eciprocity must e total. +f any of the two states collects or imposes or does not e7empt any transfer, death, legacy or succession ta7 of any character, the reciprocity does not wor$.

C(R v #-s.er 1 P.-+s 93 #$%&s' !alter .. Stevenson was orn in the #hilippines of /ritish parents, married in )anila to another /ritish su "ect, /eatrice. 0e died in 12&1 in California where he and his wife moved to.

+n the #hilippines, upon the death of any citi?en or resident, or non@resident with properties, there are imposed upon his estate, oth an es&$&e $1, $1 -1.er-&$1%e ta7. /ut, under the laws of California, o1+0 -1.er-&$1%e &$3 is imposed. Also, although the 8ederal +nternal ,evenue Code imposes an estate ta7, it does not grant e7emption on the asis of reciprocity. Thus, a 8ilipino citi?en shall always e at a disadvantage. This is not what the legislators intended.

COMM(44(ONER O# (NTERNAL RE5ENUE, petitioner, vs. NORTON $1, *ARR(4ON COMPAN6, respondent. G.R. No. L-17!18, A)2)s& 31, 19!8

+n his will, he instituted /eatrice as his sole heiress to certain real and personal properties, among which are 314,444 shares of stoc$s in )indanao )other Lode

Norton and 0arrison is a corporation organi?ed in 1211, 516 to uy and sell at wholesale and retail, all $inds of goods, wares, and merchandiseA 536 to act as agents of manufacturers in the United States and foreign countriesA and 5B6 to carry on and conduct a general wholesale and retail mercantile esta lishment in the #hilippines. Cac$ ilt is, li$ewise, a corporation organi?ed on 8e ruary 1(, 12DE primarily for the purpose of ma$ing, producing and manufacturing concrete loc$s. Under date of Culy 3', 12DE. Norton and Cac$ ilt entered into an agreement where y Norton was made the sole and e7clusive distri utor of concrete loc$s manufactured y Cac$ ilt. #ursuant to this agreement, whenever an order for concrete loc$s was received y the Norton F 0arrison Co. from a customer, the order was transmitted to Cac$ ilt which delivered the merchandise direct to the customer. #ayment for the goods is, however, made to Norton, which in turn pays Cac$ ilt the amount charged the customer less a certain amount, as its compensation or profit. 9uring the e7istence of the distri ution or agency agreement, or on Cune 14, 12D2, Norton F 0arrison acGuired y purchase all the outstanding shares of stoc$ of Cac$ ilt. Apparently, due to this transaction, the Commissioner of +nternal ,evenue, after conducting an investigation, assessed the respondent Norton F 0arrison for deficiency sales ta7 and surcharges in the amount of #B3,((3.24, ma$ing as asis thereof the sales of Norton to the #u lic. As Norton and 0arrison did not conform with the assessment, the matter was rought to the Court of Ta7 Appeals. +ssueH !hether or not the transaction su "ect to ta7 is the sale from Cac$ ilt to Norton. 0eld. The ma"ority of the Ta7 Court, in relieving Norton F 0arrison of lia ility under the assessment, made the following o servationsH The law applica le to the case is Section 1E( of the National +nternal ,evenue Code which imposes a percentage ta7 of 'I on every original sale of goods, wares or merchandise, such ta7 to e ased on the gross selling price of such goods, wares or merchandise. The term Joriginal saleJ has een defined as the first sale y every manufacturer, producer or importer. 5Sec. &, Com. Act No. &4B.6 Su seGuent sales y persons other than the manufacturer, producer or importer are not su "ect to the sales ta7. +t may not e amiss to state in this connection, the advantages to Norton in maintaining a sem lance of separate entities. +f the income of Norton should e considered separate from the income of Cac$ ilt, then each would declare such earning separately for income ta7 purposes and thus pay lesser income ta7. The com ined ta7a le Norton@Cac$ ilt income would su "ect Norton to a higher ta7. /ased upon the 12&D@12&& income ta7 return of Norton and Cac$ ilt 5;7hs. ' F E6, and assuming that oth of them are operating on the same fiscal asis and their returns are accurate, we would have the following resultH Cac$ ilt declared a ta7a le net income of #1(1,343.B1 in which the income ta7 due was computed at #B',1B'.44 5;7h. E6A whereas Norton declared as ta7a le, a net income of

#134,141.&2, on which the income ta7 due was computed at #3&,(3E.44. The total of these lia ilities is #&4,'(D.ED. :n the other hand, if the net ta7a le earnings of oth corporations are com ined, during the same ta7a le year, the ta7 due on their total which is #3E1,B4B.24 would e #'4,'(D.44. So that, even on the Guestion of income ta7 alone, it would e to the advantages of Norton that the corporations should e regarded as separate entities. C(R vs. 4EAGATE TEC*NOLOG6 8 1 4CRA 132 8actsH Seagate Technology 5Seagate6 is registered with the #hilippine e7port Kone Authority 5#;KA6 and has een issued a #;KA certificate. +t is also a VAT registered entity. An administrative claim for refund of VAT input ta7es in the amount of #0# 3E,B(2.EE was filed on :cto er D, 1222. No final action as een received y Seagate from the C+, on its claim for VAT refund. Seagate thus elevated the case to the CTA y way of petition for review in order to toll the running of the two year prescriptive period. +SSU;H !hether or not Seagate is entitled to the refund or issuance of Ta7 Credit Certificate. 0eldH L;S. As a #;KA registered enterprise within a special economic ?one, Seagate is entitled in the fiscal incentives and enefits, provided for in either #9(( or ;: 33(. +t shall moreover en"oy all privileges, enefits, advantages, or e7emptions under oth ,A '33' and ,A 'EDD. Seagate en"oys preferential ta7 treatment. +t is not su "ect to internal revenue laws and regulations and is even entitled to ta7 credits. The VAT on capital goods is an internal revenue from which Seagate as an entity is e7empt. Although the transactions involving such ta7 is are not e7empt, Seagate as a VAT registered person however is entitled to their credits. The law that originally impose the VAT in the country, as well as su seGuently amendments of that law, has een drawn from the ta7 credit method. Under the present method that relied on invoices, and entity can credit against or su tract from the VAT charged on its sales or outputs the Vat paid on its purchases, inputs and imports. PAGCOR v. C(R G.R. No. 172087, M$r%. 1 , 2011 #$%&sH #A.C:, was created pursuant to #residential 9ecree 5#.9.6 No. 14('@ A3 on Canuary 1, 12''. Simultaneous to its creation, #.9. No. 14('@ /B 5supplementing #.9. No. 14('@A6 was issued e7empting #A.C:, from the payment of any type of ta7, e7cept a franchise ta7 of five percent 5&I6 of the

gross revenue.D Thereafter, on Cune 3, 12'E, #.9. No. 1B22 was issued e7panding the scope of #A.C:,Ms e7emption.& To consolidate the laws pertaining to the franchise and powers of #A.C:,, #.9. No. 1E(2( was issued. #A.C:,Ms ta7 e7emption was removed in Cune 12ED through #.9. No. 12B1, ut it was later restored y Letter of +nstruction No. 1DB4, which was issued in Septem er 12ED. :n Canuary 1, 122E, ,.A. No. ED3D,E otherwise $nown as the National Internal Revenue Code of 1997, too$ effect. Section 3' 5c6 of ,.A. No. ED3D provides that government@owned and controlled corporations 5.:CCs6 shall pay corporate income ta7, e7cept petitioner #A.C:,, the .overnment Service and +nsurance Corporation, the Social Security System, the #hilippine 0ealth +nsurance Corporation, and the #hilippine Charity Sweepsta$es :ffice. !ith the enactment of ,.A. No. 2BB'14 on )ay 3D, 344&, certain sections of the National +nternal ,evenue Code of 122' were amended. The particular amendment that is at issue in this case is Section 1 of ,.A. No. 2BB', which amended Section 3' 5c6 of the National +nternal ,evenue Code of 122' y e7cluding #A.C:, from the enumeration of .:CCs that are e7empt from payment of corporate income ta7 (ss)eH !hether or not #A.C:, is still e7empt from corporate income ta7 and VAT with the enactment of ,.A. No. 2BB'. *e+,H Les. Under Section 1 of ,.A. No. 2BB', amending Section 3' 5c6 of the National +nternal ,evenue Code of 12'', petitioner is no longer e7empt from corporate income ta7 as it has een effectively omitted from the list of .:CCs that are e7empt from it. #etitioner argues that such omission is unconstitutional, as it is violative of its right to eGual protection of the laws under Section 1, Article +++ of the Constitution. Although the asis of the e7emption of #A.C:, and Acesite from VAT in the case of The Commissioner of +nternal ,evenue v. Acesite 5#hilippines6 0otel Corporation was Section 143 5 6 of the 12'' Ta7 Code, as amended, which section was retained as Section 14E 5/6 5B6 in ,.A. No. ED3D, it is still applica le to this case, since the provision relied upon has een retained in ,.A. No. 2BB'. +t is settled rule that in case of discrepancy etween the asic law and a rule or regulation issued to implement said law, the asic law prevails, ecause the said rule or regulation cannot go eyond the terms and provisions of the asic law.DB,, No. 1(@344&, therefore, cannot go eyond the provisions of ,.A. No. 2BB'. Since #A.C:, is e7empt from VAT under ,.A. No. 2BB', the /+, e7ceeded its authority in su "ecting #A.C:, to 14I VAT under ,, No. 1(@ 344&A hence, the said regulatory provision is here y nullified.

The petition is #A,TLL .,ANT;9. Section 1 of ,epu lic Act No. 2BB', amending Section 3' 5c6 of the National +nternal ,evenue Code of 122', y e7cluding petitioner #hilippine Amusement and .aming Corporation from the enumeration of government@owned and controlled corporations e7empted from corporate income ta7 is valid and constitutional, while /+, ,evenue ,egulations No. 1(@344& insofar as it su "ects #A.C:, to 14I VAT is null and void for eing contrary to the National +nternal ,evenue Code of 122', as amended y ,epu lic Act No. 2BB'.

P.-+-//-1e *e$+&. C$re Prov-,ers v C(R G.R. No. 1!7330 9)1e 12, 2008

#$%&sHThe petitioner, a prepaid health@care organi?ation offering enefits to its mem ers. The C+, found that the organi?ation had a deficiency in the payment of the 9ST under Section 1E& of the 122' Ta7 Code which stipulated its implementationH

%:n all policies of insurance or onds or o ligations of the nature of indemnity for loss, damage, or lia ility made or renewed y any person, association or company or corporation transacting the usiness of accident, fidelity, employerMs lia ility, plate, glass, steam oiler, urglar, elevator, automatic sprin$ler, or other ranch of insurance 5e7cept life, marine, inland, and fire insurance6* The C+, sent a demand for the payment of deficiency ta7es, including surcharges and interest, for 122(@122' in the total amount of #33D,'43,(D1.1E.

The petitioner protested to the C+,, ut it didn=t act on the appeal. 0ence, the company had to go to the CTA. The latter declared "udgment against them and reduced the ta7es. +t ordered them to pay 33 million pesos for deficiency VAT for 122' and B1 million deficiency VAT for 122(. CA denied the company=s appeal an d increased ta7es to && and (E million for 122( to 122'.

+ssuesH !hether or not a health care agreement in the nature of an insurance contract and therefore su "ect to the documentary stamp ta7 59ST6 imposed under Section 1E& of ,epu lic Act ED3D 5Ta7 Code of 122'6

0eldH Les. #etition dismissed. ,atioH The 9ST is levied on the e7ercise y persons of certain privileges conferred y law for the creation, revision, or termination of specific legal relationships through the e7ecution of specific instruments. The 9ST is an e7cise upon the privilege, opportunity, or facility offered at e7changes for the transaction of the usiness. +n particular, the 9ST under Section 1E& of the 122' Ta7 Code is imposed on the privilege of ma$ing or renewing any policy of insurance 5e7cept life, marine, inland and fire insurance6, ond or o ligation in the nature of indemnity for loss, damage, or lia ility. #etitionerMs health care agreement is primarily a contract of indemnity. And in the recent case of /lue Cross 0ealthcare, +nc. v. :livares, this Court ruled that a health care agreement is in the nature of a non@life insurance policy. (ss)e' !hether or not Section 111 5A6 of the new N+,C providing for transitional input ta7 credits to ta7payers not previously covered under the VAT law is clear and unam iguous to cover goods and properties.

*e+,H Section 144 5now 14&6 defines %good or properties* to include %real properties held primarily for sale to costumers or held for lease in the ordinary course of usiness.* The statutory definition leaves no room for dou t. Thus, having een defined, the term %goods* as used in Section 14& 5now 1115A66 of the same Code could not have a different meaning. 777 As mandated y Article ' of the Civil Code, an administrative rule or regulation, to e valid, must conform and not contravene the law on which it is ased. +t cannot modify, e7pand, or su tract from the law it is intended to implement. Any rule that is not consistent with the statute itself is null and void. !hile administrative agencies, such as the /ureau of +nternal ,evenue, may issue regulations to implement statutes, they are without authority to limit the scope of the statute to less than what it provides, or e7tend or e7pand the statute eyond its terms, or in any way modify e7plicit provisions of the law. +ndeed, a Guasi@"udicial ody or an administrative agency for that matter cannot amend an act of Congress. 0ence, in case of a discrepancy etween the asic law and an interpretative or administrative ruling, the asic law prevails.

+ts health care agreement is not a contract for the provision of medical services. #etitioner does not actually provide medical or hospital services ut merely arranges for the same.+t is also incorrect to say that the health care agreement is not ased on loss or damage ecause, under the said agreement, petitioner assumes the lia ility and indemnifies its mem er for hospital, medical and related e7penses 5such as professional fees of physicians6. The term Jloss or damageJ is road enough to cover the monetary e7pense or lia ility a mem er will incur in case of illness or in"ury.

#hilamcare 0ealth Systems, +nc. v. CA.@ The health care agreement was in the nature of non@life insurance, which is primarily a contract of indemnity. Similarly, the insura le interest of every mem er of petitionerMs health care program in o taining the health care agreement is his own health. Under the agreement, petitioner is ound to indemnify any mem er who incurs hospital, medical or any other e7pense arising from sic$ness, in"ury or other stipulated contingency to the e7tent agreed upon under the contract.

Section D.14&@1 of ,, '@2&, which limits %goods* to improvements on the real property while e7cludes the real properties themselves is, therefore, struc$ down for eing contradictory to the Ta7 Code.

#or& :o1-;$%-o Deve+o/me1& Cor/. v. Comm-ss-o1er o; (1&er1$+ Reve1)e, G.R. 158885 and 170680. October ! 009

Tos.-b$ (1;orm$&-o1 E<)-/me1& =P.-+s.>, (1%. v. Comm-ss-o1er o; (1&er1$+ Reve1)e, G.R. No. 15759"!#arc$ 9! 010

R$&-o1$+e' (& -s $3-om$&-% -1 /+e$,-12s $1, /r$%&-%e &.$& 1o 1e? -ss)e -1 $ %$se %$1 be r$-se, -1 $ /+e$,-12 ?.-%. b0 ,)e ,-+-2e1%e %o)+, .$ve bee1 r$-se, -1 /rev-o)s /+e$,-12s. The C+, did not argue in his Answer that Toshi a had no right to the creditNrefund of its input VAT payments ecause the latter was VAT@e7empt and its e7port sales were VAT@e7empt transactions. The #re@Trial /rief of the C+, was eGually ereft of such allegations or arguments. The C+, li$ewise chose not to present any evidence at all during the trial efore the CTA, and also waived the su mission of a )emorandum. The C+, had waited until the CTA already rendered its 9ecision efore asserting in his )otion for ,econsideration that Toshi a was VAT@e7empt and its e7port sales were VAT@e7empt transactions. Upon the failure of the C+, to timely plead and prove efore the CTA its defenses or o "ections, the C+, is deemed to have waived the same.

#$%&sH San ,oGue filed an amended claim for refund or issuance of ta7 credit certificate representing unutili?ed input VAT for TL 3441 on purchases of goods and services and importation of goods attri uta le to ?ero@rated sales with the /+, on )arch 3E, 344B. Company filed its #etition for ,eview efore the CTA on April 14, 344B.

(ss)eH !hether T#=s "udicial claim was timely filed.

*e+,H 134OB4 day rule is mandatory and "urisdictional. Claim for refund was denied for eing premature. C(R v. Ro0$+ (1&ero%e$1 L-1es 38 4CRA 9

M-1,$1$o (( Geo&.erm$+ P$r&1ers.-/ v C(R, GR 193301, M$r%. 11, 2013 #$%&sH +n the course of its usiness, a power generating company ought a motor vehicle which formed part of its assets used in its usiness operations. !hen the motor vehicle was already fully depreciated, the company sold the motor vehicle. 5AT &re$&me1& o1 (so+$&e, Tr$1s$%&-o1 R)+-12H The SC held that while the sale of the motor vehicle is an isolated transaction, it may e deemed an incidental transaction which is su "ect to 13I VAT. +t does not follow that an isolated transaction cannot e an incidental transaction for VAT purposes. Section 14& of the Ta7 Code which provides that a transaction %in the course of trade or usiness* includes %transactions incidental thereto*. 0ence, the sale of motor vehicle is considered an incidental transaction made in the course of trade or usiness which should e su "ect to the 13I VAT. C(R v 4$1 Ro<)e Po?er Cor/or$&-o1, T$2$1-&o M-1-12 Cor/or$&-o1 $1, P.-+e3 M-1-12 Cor/or$&-o1, GR 18788 , #ebr)$r0 12, 2013

Although disagreeing with the position ta$en y the /ureau of +nternal ,evenue, Connel /ros. had forthwith de%o&ited the amount assessed y the same, and the deposit was later converted into %a'(ent, followed y a formal reGuest for refund and then, upon denial thereof, y the corresponding petition for review in the Court of Ta7 Appeals. Thus, u%on de(and, the amount representing the ta7es sought to e collected y the .overnment was %laced at t$e latter& di&%o&ed, su "ect only to the ta7payerMs claim that it was not legally due. 0ence, the reason for the imposition of a surcharge P which is non@payment within the period prescri ed y law P did not, in effect, e7ist in Connel /rosM case. The case initially referred to a similar claim for refund of payments made of the corporate franchise ta7 P provided in section 3&2 of the Ta7 Code, as amended y ,ep. Act No. B2, effective in 12D( P of &I of the gross earnings or receipts of a corporation that had, since 12B4, a municipal franchise imposing a ta7 of 1I the earnings for the first 34 years and 3I for the ne7t 1& years. The ta7payer maintained that the application of the Ta7 Code impaired its vested rights under said municipal franchise. The claim for refund had an e7change of views, etween the /ureau of +nternal ,evenue and the ta7payer, that dragged for a num er of years, culminating, in Septem er 12(1, in an assessment for deficiency franchise ta7, for the period from Canuary 12&( to Septem er 12(4, plus 3&I surcharge Although the claim of impairment of contractual o ligation was overruled, for the reason that the municipal franchise contained an e7press reservation that it was su "ect to amendment or repeal, !e e7empted the ta7payer from the payment of the surcharge upon the authority of the Connel /ros.M case. ,egardless of our present opinion on the applica ility to the +mus case of the view ta$en in the Connel /ros.M case concerning the payment of surcharges, the

fact is that, in such case, there had een no failure to pay the ta7 assessed therein, so that there really was no legal "ustification for the imposition of surcharges. The circumstance that +mus ;lectric Co. had be)un y demanding a refund of the %a'(ent& it $ad (ade, for the period from 12DE to 12&1, pursuant to the Ta7 Code, to which it later claimed, it could not e made su "ect without violating rights vested under its municipal franchise, may, perhaps, account for the reliance upon the Connel /ros.M case, although the issue etween the electric company and the .overnment, eventually, ecame one for collection of the deficiency franchise ta7 from 12&( to 12(4. At any rate, neither case nor oth suffice to outweigh the a ove@mentioned si7 cases declaring that the provision imposing surcharges is mandatory. The alleged good faith of the ta7payer herein is P apart from eing insufficient to "ustify a departure from the rule laid down and repeatedly applied in said cases P merely ased upon the advice said to have een given y its counsel. C(R vs. :P( G.R. No. 1380!2 A/r-+ 17, 2007

!as not in the old Section 3'4 ut was only later on inserted in the renum ered Section 33E in 122'.

Ta7 assessments y ta7 e7aminers are presumed correct and are made in good faith. The ta7payer has the duty to prove otherwise. +n the a sence of proof of any irregularities in the performance of duties, an assessment duly made y /+, e7aminer and approved y his superior officers will not e distri uted. All presumptions are in favor of the correctness of ta7 assessments.

C(R vs. #or&)1e Tob$%%o Cor/or$&-o1, [G.R. Nos. 1!7278-7 , 9)+0 21, 2008" #$%&s' ,espondent 8TC is a domestic corporation that manufactures cigarettes pac$ed y machine under several rands. #rior to Canuary 1, 122', Section 1D3 of the 12'' Ta7 Code su "ected said cigarette rands to ad valorem ta7. Anne7 9 of ,.A. No. D3E4 prescri ed the cigarette rands= ta7 classification rates ased on their net retail price. :n Canuary 1, 122', ,.A. No. E3D4 too$ effect. Sec. 1D& thereof now su "ects the cigarette rands to specific ta7 and also provides thatH 516 the e7cise ta7 from any rand of cigarettes within the ne7t three 5B6 years from the effectivity of ,.A. No. E3D4 shall not e lower than the ta7, which is due from each rand on :cto er 1, 122(A 536 the rates of e7cise ta7 on cigarettes enumerated therein shall e increased y 13I on Canuary 1, 3444A and 5B6 the classification of each rand of cigarettes ased on its average retail price as of :cto er 1, 122(, as set forth in Anne7 9 shall remain in force until revised y Congress.

#ACT4H +n :cto er 3E, 12EE, petitioner assessed /#+ of deficiency percentage and documentary stamp ta7 for the year 12E(, in the total amount of #132,DEE,4&(.(B. A letter reply y respondent was sent on 9ecem er 14, 12EE stating among otherH ... we shall inform you the ta7payer=s decision on whether to pay of protest the assessment, CTA ruled that /#+ failed to protest on time under Sec 3'4 of N+,C of 12E(.

(44UEH !hether or not the assessments issued to /#+ for deficiency percentage and documentary stamp ta7es for 12E( had already ecome final and un@ appeala le.

The Secretary of 8inance issued ,, No. 1'@22 to implement the provision for the 13I e7cise ta7 increase. ,, No. 1'@22 added the Gualification that %the new specific ta7 rate 777 shall not e lower than the e7cise ta7 that is actually eing paid prior to Canuary 1, 3444.* +n effect, it provided that the 13I ta7 increase must e ased on the e7cise ta7 actually eing paid prior to Canuary 1, 3444 and not on their actual net retail price.

*e+,H +n merely notifying /#+ of his findings. C+, relied on the provisions of the former Section 3'4 prior to its amendment y ,A ED3D. The sentence %the ta7payers shall e informed in writing of the law and the facts on which the assessment is madeQ* 8TC filed 3 separate claims for refund or ta7 credit of its purportedly overpaid e7cise ta7es for the month of Canuary 3444 and for the period Canuary 1@ 9ecem er B1, 3443. +t assailed the validity of ,, No. 1'@22 in that it enlarges Section 1D& y providing the aforesaid Gualification. +n this petition, petitioner C+, alleges that the literal interpretation given y the CTA and the CA of Section

1D& would lead to a lower ta7 imposa le on 1 Canuary 3444 than that imposa le during the transition period, which is contrary to the legislative intent to raise revenue.

(ss)e' Should the 13I ta7 increase e ased on the net retail price of the cigarettes in the mar$et as outlined in Section 1D& of the 122' Ta7 CodeR

its purchases of "et fuel from #etron Corporation from Canuary to Cune 3444.@ C T A d e n i e d S i l $ a i r = s p e t i t i o n o n t h e g r o u n d t h a t a s the e7cise ta7 wasimposed on #etron Corporation as the manufacturer of p e t r o l e u m products, any claim for refund should e filed y the latterA and wherethe urden of ta7 is shifted to the purchaser, the amount passed onto it is no longer a ta7 ut ecomes an added c o s t o f t h e g o o d s purchased.

*e+,' L;S. Section 1D& is clear and uneGuivocal. +t states that during the transition period, i.e., within the ne7t B years from the effectivity of the 122' Ta7 Code, the e7cise ta7 from any rand of cigarettes shall not e lower than the ta7 due from each rand on 1 :cto er 122(. This Gualification, however, is conspicuously a sent as regards the 13I increase which is to e applied on cigars and cigarettes pac$ed y machine, among others, effective on 1 Canuary 3444. Clearly, Section 1D& mandates a new rate of e7cise ta7 for cigarettes pac$ed y machine due to the 13I increase effective on 1 Canuary 3444 without regard to whether the revenue collection starting from this period may turn out to e lower than that collected prior to this date.

The lia ility for e7cise ta7 on petroleum products that are e i n g removed from its refinery is imposed on the manufacturerNproducer 5Section 1B4 of the N+,C of 122'.6 The right to claim for the refund of e7cise ta7es paid on p e t r o l e u m products lies with #etron Corporation who paid and remitted the e7ciseta7 to the /+,. ,espondent, on the other hand, may only claim from#etron Corporation the reim ursement of the ta7 urden shifted to theformer y the latter. The e7cise ta7 parta$ing the nature of an indirectta7, is clearly the lia ility of the manufacturer or seller who has theoption whether or not to shift the urden of the ta7 to the purchaser.! here the urden of the ta7 is shifted to the SpurchaserT, the amountpassed on to it is no longer a ta7 ut ecomes an added cost on the goods purchased which constitutes a part of the purchase price.

The Gualification added y ,, No. 1'@22 imposes a ta7 which is the higher amount etween the ad valorem ta7 eing paid at the end of the B@year transition period and the specific ta7 under Section 1D&, as increased y 13IP a situation not supported y the plain wording of Section 1D& of the 122' Ta7 Code. Administrative issuances must not override, supplant or modify the law, ut must remain consistent with the law they intend to carry out. ,evenue generation is not the sole purpose of the passage of the 122' Ta7 Code. The shift from the ad valorem system to the specific ta7 system in the Code is li$ewise meant to promote fair competition among the players in the industries concerned and to ensure an eGuita le distri ution of the ta7 urden. 4(L@A(R =4(NGAPORE> PTE, LTD vs.COMM(44(ONER O# (NTERNAL RE5ENUEG.R. No. 173 98, #ebr)$r0 !, 2008 #$%&s' :n 9ecem er 12, 3441, Sil$air filed with the /ureau o f + n t e r n a l ,evenue 5/+,6 a written application for the refund of #D,&(',D&4.'2e7cise ta7es it claimed to have paid on

(ss)e' !hether or not the petitioner is the proper party to claim for refundor ta7 credit.

*e+,' No, The proper party to Guestion, or see$ a refund of, an indirectta7 is the statutory ta7payer, the person on whom the ta7 is imposed y law and who paid the same even if he shifts the urden thereof toanother. Section 1B4 5A6 536 of the N+,C provides that Junless otherwise specifically allowed, the return shall e filed and t h e e7cise ta7 paid y the manufacturer or producer efore removal of d o m e s t i c p r o d u c t s f r o m p l a c e o f p r o d u c t i o

n . J T h u s , # e t r o n Corporation, not Sil$air, is the statutory ta7payer which is entitled toclaim a refund ased on Section 1B& of the N+,C of 122' and ArticleD536 of the Air Transport Agreement etween ,# and Singapore.Sil$air ases its claim for refund or ta7 credit on Section 1B& 5 6 of the N+,C of 122' which readsSec. 1B&. #etroleum #roducts sold to +nternational Carriers and;7empt ;ntities of Agencies.

!hen the clause ecame effective in 12ED, the Commissioner of +nternal ,evenue assessed an additional ta7 on the increased amount of the coverage of the said policies. Said ta7 was to cover the deficiency documentary stamps ta7 for said year. The Court of Appeals ruled that there is only one policy and the automatic increase is not a separate policyA that said increase of coverage is not covered y another documentary stamp ta7. (44UE' !hether or not there is only one policy.

#etroleum products sold to thefollowing are e7empt from e7cise ta7H5 6 ;7empt entities or agencies covered y ta7 treaties,conventions, and other international agreements for their use and consumptionH #rovided, however, That the country of said foreign international carrier or e7empt entities or agencies e7empts from similar ta7es petroleum products sold to #hilippine carriers, entities or agenciesA and Article D536 of the Air Transport Agreement e t w e e n t h e .overnment of the ,epu lic of the #hilippines and the .overnmentof the ,epu lic of Singapore 5Air Transport Agreement etween ,# and Singapore6 The e7emption granted under Section 1B& 5 6 of the N+,C of 122' a n d A r t i c l e D 5 3 6 o f t h e A i r T r a n s p o r t A g r e e m e n t e t w e e n , # a n d Singapore cannot, without a clear showing of legislative intent, ec o n s t r u e d a s i n c l u d i n g i n d i r e c t t a 7 e s . S t a t u t e s g r a n t i n g t a 7 e7emptions must e construedin strictissimi " urisagainst theta7payer and li erally in favor of the t a 7 i n g a u t h o r i t y , a n d i f a n e7emption is found to e7ist, it must not e enlarged y construction.

*ELD' Les. Section D2, Title V+ of the +nsurance Code defines an insurance policy as the written instrument in which a contract of insurance is set forth. Section &4 of the same Code provides that the policy, which is reGuired to e in printed form, may contain any word, phrase, clause, mar$, sign, sym ol, signature, num er, or word necessary to complete the contract of insurance. +t is thus clear that any rider, clause, warranty or endorsement pasted or attached to the policy is considered part of such policy or contract of insurance. The su "ect insurance policy at the time it was issued contained an %automatic increase clause.* Although the clause was to ta$e effect only in 12ED, it was written into the policy at the time of its issuance. The distinctive feature of the %"unior estate uilder policy* called the %automatic increase clause* already formed part and parcel of the insurance contract, hence, there was no need for an e7ecution of a separate agreement for the increase in the coverage that too$ effect in 12ED when the assured reached a certain age. The said increase however is imposa le with documentary stamp ta7es. The original documentary stamps ta7 paid y Lincoln #hilippine covers the original amount of the policies without the pro"ected increase. The said increase was already definite at the time of the issuance of the policy. Thus, the amount insured y the policy at the time of its issuance necessarily included the additional sum covered y the automatic increase clause ecause it was already determina le at the time the transaction was entered into and formed part of the policy. !hile ta7 avoidance schemes and arrangements are not prohi ited, ta7 laws cannot e circumvented in order to evade the payment of "ust ta7es. +n the case at ar, to claim that the increase in the amount insured 5 y virtue of the automatic increase clause incorporated into the policy at the time of issuance6 should not e included in the computation of the documentary stamp ta7es due on the policy would e a clear evasion of the law reGuiring that the ta7 e computed on the asis of the amount insured y the policy.

Comm-ss-o1er o; (1&er1$+ Reve1)e vs L-1%o+1 P.-+-//-1e L-;e (1s)r$1%e Com/$10, (1%.

379 SCRA 423

Facts* #rior to 12ED, Lincoln #hilippine Life +nsurance Company, +nc. 5now called Cardine@C)A Life +nsurance Company, +nc.6 used to issue policies called %Cunior ;state /uilder #olicy*. A clause therein provides for an automatic increase in the amount of life insurance coverage upon attainment of a certain age y the insured without the need of issuing a new policy. The clause was to ta$e effect in the year 12ED. 9ocumentary stamp ta7es due on the policy were paid y Lincoln #hilippine only on the initial sum assured.

China Banking Corporation v. Commissioner of Internal Revenue, G.R. 172359. October 2, 2009.

R$&-o1$+eH Special savings deposit 5SS96 accounts which have the same features as a time deposit account, i.e., a fi7ed term in order to earn a higher interest rate, is su "ect to the 9ocumentary Stamp Ta7 59ST6 imposed under Section 1E4 5now 1'26 of the 122' National +nternal ,evenue Code. #etitioner=s claim that their Savings #lus 9eposit is a regular savings account since it is evidenced y a pass oo$, hence, not su "ect to 9ST is untena le. A deposit account which has the same features as a time deposit account, i.e., a fi7ed term in order to earn a higher interest rate, is su "ect to the 9ocumentary Stamp Ta7 imposed under Section 1E4 of the 122' National +nternal ,evenue Code. A pass oo$ representing an interest@earning deposit account issued y a an$ Gualifies as a certificate of deposit drawing interest. A document to e deemed a certificate of deposit reGuires no specific form as long as there is some written memorandum that the an$ accepted a deposit of a sum of money from a depositor. !hat is important and controlling is the nature or meaning conveyed y the pass oo$ and not the particular la el or nomenclature attached to it, inasmuch as su stance, not form, is paramount. 0ence, whether or not SS9s are su "ect to documentary stamp ta7 is dependent on the nature and specific features thereof. +t is thus conceded that if the SS9s are more a$in to a time deposit account then the same would e su "ect to documentary stamp ta7. 0owever, if the SS9s are more a$in to a regular savings deposit account then the same would not e su "ect to documentary stamp ta7. TAM:UNT(NG PAAN4*OP, (NC. 54. COMM(44(ONER O# (NTERNAL RE5ENUE- 5ALUE ADDED TAB, DOCUMENTAR6 4TAMP TAB #ACT4' #etitioner was assessed for deficiency Value Added Ta7 and 9ocumentary Stamp Ta7 on the premise that, for the Value Added Ta7, it was engaged in the sale of services. (44UE4H 516 +s #etitioner lia le for the Value Added Ta7R 536 Can the imposition of surcharge and interest e waived on the imposition of deficiency 9ocumentary Stamp Ta7R *ELDH 516 N:. Since #etitioner is considered a non@ an$ financial intermediary, it is su "ect to 14I VAT for the ta7 years 122( to 3443 ut since the collection of Value Added Ta7 from non@ an$ financial intermediaries was specifically deferred y law, #etitioner is not lia le for Value Added Ta7 during these ta7 years. !ith the full implementation of the Value Added Ta7 system on non@ an$ financial intermediaries starting Canuary 1, 344B, #etitioner is lia le for 14I

Value Added Ta7 for said ta7 year. And eginning 344D up to the present, y virtue of ,.A. No. 23BE, petitioner is no longer lia le for VAT ut it is su "ect to percentage ta7 on gross receipts from 4I to &I, as the case may e. 536 L;S. #etitionerMs argument against lia ility for surcharges and interest P that it was in good faith in not paying documentary stamp ta7es, it having relied on the rulings of respondent C+, and the CTA that pawn tic$ets are not su "ect to documentary stamp ta7es P was found to e meritorious. .ood faith and honest elief that one is not su "ect to ta7 on the asis of previous interpretations of government agencies tas$ed to implement the ta7 law are sufficient "ustification to delete the imposition of surcharges and interest.