QuestionsQuestions (BIR REVENUE MEMORANDUM CIRCULAR NO. 27-94)
It implements and circulates the Supreme Court’s Temporary Restraining Order (TRO) that directed government respondents to cease and desist from enforcing/implementing RA 7716, and it instructs the BIR and concerned persons on the effective fallout of that TRO.
Tolentino v. Secretary of Finance and Commissioner of Internal Revenue, docketed as G.R. No. 115455, et al.
Adopted on June 27, 1994, signed by Liwayway V. Chato (Commissioner of Internal Revenue).
To cease and desist from enforcing and/or implementing RA 7716, the “Expanded Value Added Tax Law,” until further orders from the Court.
Executive Secretary Teofisto Guingona, Jr., Secretary of Finance Roberto F. De Ocampo, Commissioner of Internal Revenue Liwayway V. Chato, and Commissioner of Customs Guillermo L. Parayno, Jr., and their agents/representatives/persons acting in their stead.
The BIR enjoined a stop in implementing the registration requirement for businesses newly covered by the Expanded VAT Law, as prescribed under RMO 41-94 and related issuances.
Collection of the P1,000.00 annual registration fees prescribed by the Expanded VAT Law should be stopped.
They are to be governed by the provisions of the National Internal Revenue Code (NIRC) prior to its amendment by RA 7716.
They continue paying the caterer’s tax under Section 114 of the old NIRC (i.e., prior to RA 7716).
Although copra was exempt from VAT under Section 103 of the old NIRC, as amended by RA 7716 it should be subject to 10% VAT pursuant to Section 103 of the old NIRC per the TRO instructions—i.e., the old NIRC provisions remain controlling pending Supreme Court action.
Sales of real property that became taxable under RA 7716 shall continue to be VAT exempt under Sections 99 and 100 of the old NIRC, consistent with the TRO directive that the old NIRC provisions govern.
They must be reverted to and considered remaining as non-VAT sales invoices.
Revenue Regulations No. 10-94.
They are considered ineffective until the Supreme Court has declared otherwise; pending decision, claims for refund of the P1,000.00 annual registration fee made under RA 7716 shall not be given due course.
Because the TRO maintains the supremacy of the pre-RA 7716 NIRC regime during the pendency of the cases, effectively treating RA 7716’s registration-fee-related effects as ineffective pending Supreme Court resolution.
It creates an immediate binding directive that halts enforcement/implementation of the enjoined law (RA 7716) and requires agencies to revert to the operative legal framework identified (the old NIRC provisions) until the Court issues further orders.