By Jun Ramirez
The Court of Tax Appeals (CTA) has reversed the decision of one of its divisions which ordered the Bureau of Internal Revenue (BIR) to refund Duty Free Philippines Corporation (DFPC) more than P93 million in “erroneously” paid value-added tax (VAT).
The tax stemmed from the importation by the government-owned DFPC of cigarettes and alcohol in 2013 for resale.
In a 15-page resolution, the court en banc said it has no jurisdiction to adjudicate dispute between or among government agencies, including government-owned or controlled corporations.
It said that under Presidential Decree (PD) 242 such dispute must be resolved by the justice secretary, the solicitor general or the Government Corporate Counsel depending on the nature of the issue.
“Even if the National Internal Revenue Code is a later act, the presidential decree which is a special law will still prevail and treated as an exception to the terms of the Tax Code,” the court stated.
It said that even the Supreme Court noted the conflicting provisions in the Tax Code and the PD, but agreed the latter shall prevail when disputes involve government offices.
The BIR said the imposition of the tax was based on Section 7 of the Tax Code.
But DFPC insisted that it has been exempted from paying taxes under its charter (RA 9593).