Case Digest (G.R. No. 147295)
Facts:
The Commissioner of Internal Revenue v. Acesite (Philippines) Hotel Corporation, G.R. No. 147295, February 16, 2007, the Supreme Court Second Division, Velasco, Jr., J., writing for the Court.Petitioner is the Commissioner of Internal Revenue (CIR); respondent is Acesite (Philippines) Hotel Corporation (Acesite), owner-operator of the Holiday Inn Manila Pavilion Hotel. Acesite leased portions of its premises to the Philippine Amusement and Gaming Corporation (PAGCOR) for casino operations and sold food and beverages to PAGCOR’s patrons through hotel outlets.
From January 1996 to April 1997 Acesite imposed Value-Added Tax (VAT) amounting to P30,152,892.02 on its rentals and sales to PAGCOR. PAGCOR refused to bear the VAT due to its claimed tax-exempt status; it paid Acesite only the net amounts. Fearing penalties, Acesite remitted the VAT to the CIR but later concluded that its transactions with PAGCOR were zero-rated because PAGCOR was tax-exempt.
On May 21, 1998, Acesite filed an administrative claim for refund with the CIR which went unresolved; on May 29, 1998, Acesite filed suit with the Court of Tax Appeals (CTA) for refund. By decision dated January 3, 2000, the CTA held that the transactions between Acesite and PAGCOR were effectively zero-rated under former Section 102(b)(3) of the Tax Code and ordered refund of P30,054,148.64 (after deductions for prescribed portions). Acesite’s claim was supported by an independent CPA’s attestation of actual VAT payments; the CIR did not introduce evidence contesting those payments.
The Court of Appeals (CA), in a November 17, 2000 Decision in CA-G.R. SP No. 56816, affirmed the CTA, ruling that PAGCOR was e...(Pro-only)
Issues:
- Does PAGCOR’s tax exemption under P.D. No. 1869 include indirect taxes such as VAT, thereby entitling Acesite to a zero percent (0%) VAT rate?
- Does the zero percent (0%) VAT rate under then Section 102(b)(3) of the Tax Code (now Section 108(b)(3) of R.A. 8424) legally apply to Acesite such that its VAT ...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)