CTA Case No. 941 (Decision)

PUELIC OFTHE PHILIPIN COURT OF TAX MAnILA APPEAL

PROJECTS,ING.. THE SCUTEAN INOUSTRIAL Petitioner,

a verous - CAE O.941 C.T.A.

REVEUE THE COHMIOSICNER CF INTENAL Re apondent. Waew0,1962

DECISION

Petitioner Scuthero Znduetrial Projects. Inc.

seeks to zecover fron respondent Coanisioner 3n

alleged over-payoent of advance caloe tax cn in-

portations etfected oy it.

Fotitiooer is engaged Sn tho manufacture of

gaivantzed Lron sheetn, n new and neceouary industry

under the prcvisiong of Nepublic Acts Nos. 35 and

9ol. It taported raw materials. consisting of anti-

mony ingoto, steel strapped load ingotm. cold zeiled

block coeto. aanonium chlorice and Lranding ink

whtch arrivod at the Port of Cebu tn Nioveouer and

Deceaner i9 9. and on which it oia only lc of the

customs duty in occordance with the dininiching or-

emption pcowisien of Section l of anpublic Act No

9

Subsequently. petitioner aloo paid ice of the

odvanco ooloo ton on the imported raw aaterials.

cutod, aaong othar thiogs. on the full custoas

duty. instoad of on the anount actually paxd by It.

460

C.T.. CAaS HO. 941 DECISICN

2

Cn tha theory thet the advance aoles tax ohould

be computed, aong othere. on the lc t the ovntons

duty whtch it actually naid, petitionor recueated

renpondent fer ti xefud ot the tot oi ancunt ct 5.128.44 ov-paid advance ales tax.The -

quest fer refund having beon deniod, the instant op

ponl wan inot ituted. However, in the asmcrandum sube

aitted ia support ot its appeai, petitioner seexs to

recovor cnly the uount of 646.99, tho correctneso

which amount is aet diaputod by zespondont in case of a

doeision adverse to him. Consecuently, take it that

this anpeal 1 iimttod oniy to the rocovery of F646.99.

Tho only question ratsed for our consideration

is the interpretataon of ehe phrase eustoas duty

found n Sectsoa.18(o) et the Tax Code. The perti

nent roviuions or this law reads

SEC. 183. X X

when the artcloc areimported. the per- centege taxes ontablished in sectlona ens pert ot origin tt there is any, including plun x x xi and tventy-iive Ber cantu #ive. and ono hundrad ighcy-six of thi Code shall bc paxd in advance by the im- porter, in accordance with gogulatlons prosulgated by the secretary of Finance and pricrito the relaaso or such articles fron custots Cuatody, aased on the inpczt torrect y th Philippine Consul at zhe custose duty. and all eimilar charges Oection ono hundred aight y-ix. x a hundred eighty-tour. one hundred e ighty invoieo value theroot, curtttiod to as freight..postago. insurance, ccaaiusion, t C (b) Salaatax n lonoted articles of articles wnumerated in

461

CACASE NO DECIGIO

-3-

It is suggested on behalf cf the respondent

thet the custons cuty adverted to above ohould pe intezpreted es ierring to tie Icc euutcas cuty

on the Imported articles, whether wholly or par-

tially paid by the importer. In othar words, St is

argued that for the purpose of cemputing the a-

vancs aalec tax, the full custons cuty should be

included in the total landed cost ot the articles

plue mark-up, negardless of the amount ot custons

duty due and actually patd.

The suggestion is without merit. Tho advance

eales tax is based on the Import invoice value of

the imported arttcle, including oxpenaes at the eine

it was rsceived by the iaperter. plus mark-up. In the detemination of this tax, landed costs" has

beea interpreted as Bynonymoun with the phrase totel

value. whtch mnans the import invoice valua of the

articie. including freight, poctage. insurance,com- mission, custcms duty. and all ainilar chargeo The

landed cost plus mark-up xepreeents theoreeically

the selliog price of the imported arttcle (Mayon Motor.

Ine. vs. Acting Conmiasiooer of Internal Hevenue. G, a.

N0.L-15CO0Narch 29.196l. sinee he el1ing price

of the Srported article is determined by its landed coot cr Inport invotce value, Sncluding expenses at the tiae it ws received by the importer. plusnark-up, what is nct related to the artiele no an actual expense cannot be doterntnat ive or ite aelling price. Ag a

4 6 2

DECISI CAT.A CASE RO

Coroliary. ft cannot bn o banis of the advance oaloo

tax. And, it. os in the caar ot bar, the importor

in antitled so o custons duty axemption of yox und

an concequence thereoi actuelly pays oniy ic ot

the full custcas cuty. the iatter pereentage of duty

should be coneidaraa in the computaczon of the cd-

vanco oalon tax.

In tine, m rule and go ncid that m phaoee

cuotonn cuty found in Saction 1B3f of the Ta 1M Code ohould ie intarpnutol to nean the anount of

cuctoms duty legally due and paid by the isporter

earca.the espondsnt Comseioner of In

tefnal asvenue is hereby ordered te reiund to peti-

:A tioner Scuthern Industrial Prejects, lxo. the sum ot 646.99.o 06t.

SO CROENED

Nantia, Moveaoar 2u, i9el.

Prsiding -Judge ZFMNCY

wg coneur:

Aosociata udge

D OA

ACMAI M. UALI Aseociate Judgu

463