G.R. No. L-11727 - Genato Commercial Corp. vs. Court of Tax Appeals

Genato Commercial Corporation, a domestic corporation engaged in importing general merchandise, filed a petition for review against the decision of the Court of Tax Appeals.
The dispute arose from an assessment made by the Collector of Internal Revenue amounting to P4,519.53 for deficiency in advance sales tax on importations made between February 1951 and December 1954.

During the period in question, petitioner imported merchandise from abroad and paid the advance sales tax as mandated by Section 183 (B) of the National Internal Revenue Code.
The tax was computed on the import invoice value, which, as provided by the statute, must include freight, postage, insurance, commission, customs duty, and “all similar charges.”

The Collector of Internal Revenue assessed a deficiency tax based on the difference of P0.15 per U.S. dollar between the bank’s rate of exchange (which petitioner actually paid) and the legal rate of exchange.
The assessment was made under the contention that the additional charge falls within the phrase “all similar charges” prescribed by the statute.
Petitioner contended that the P0.15 difference, charged by a local bank for procuring foreign exchange, is not analogous to the charges explicitly enumerated (i.e., freight, insurance, etc.) in the statute.

Section 183 (B) of the National Internal Revenue Code requires importers to pay advance sales tax based on the import invoice value, which includes various incidental expenses as well as all other similar charges that increase the landed cost of imported articles.
The intention of Congress, as reflected in the statute, is to ensure that every expense incurred to bring the imported merchandise into the country is encapsulated in the tax assessment.
The controversy also hinges on the proper interpretation of “all similar charges” and whether such interpretation should extend to include the difference in exchange rates paid by the importer.

Petitioner initially sought reconsideration of the deficiency assessment by the Collector, which was denied.
Petitioner invoked previous rulings and administrative circulars—specifically, the Collector’s ruling in the Isaac Gun Store case and General Circular No. V-106—to argue that the advance tax payment was final and should preclude any subsequent collection of deficiency tax.
The petitioner further relied on the doctrine of equitable estoppel, contending that the prior acceptance of paid tax should prevent additional tax collection based on later discovered discrepancies.

Whether the difference of P0.15 per U.S. dollar paid by the petitioner in the purchase of foreign exchange constitutes an "all similar charge" under Section 183 (B) of the National Internal Revenue Code.

Does the additional cost incurred by the importer, which increases the landed cost of the merchandise, align with the legislative intent of including “all similar charges”?
Can the doctrine of ejusdem generis be applied in a manner that excludes such charges from the tax base?

Whether the finality of the advance sales tax payment—made pursuant to the guidelines in General Circular No. V-106 and as amended by Republic Act No. 594—precludes the Collector from later assessing and collecting deficiency tax due to an error or discrepancy in the conversion rate.

Is the advance sales tax payment regarded merely as a deposit, or is it a final payment that nonetheless does not preclude collection of any deficiency in the event of an adjustment?
What is the proper interpretation of “finality of payment” in the context of corrections arising from conversion rate discrepancies?