CTA Case No. 5078 (Decision)

REPUBLIC: OF THE PHILIPPINES nF ,. ., APPkALC" r~:,n~f-l~~L'T'l �J l r~.~.._.nv. L .:> QUEZON CITY LA CARLOTli :Ml LL DISTRICT }�..-'i.Ul.Tl-PURPOSE COOPERATIVE, C.T.A. CASE :tiO. )076 COM!MJ S':IOfiER OF HffERflAL Promulgared: ~~ SEP 12~~- .� - / }~ - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~ - - - - - - - - - - X DECISION tl��,::::. 'JT'L~:i-��:-�� i'-��'~�;�...J. ;>-.�,.:��:�..'i��l"1"�.l�,�-�..�,�;L� l ��:-�',�:~.�.-..:-:.1'�-'l.-t"�J�:i.i 1",::::.!"11!11:! �-� ... �� 1v ., -�� �� pa.h:! V'alue-Added Tax rt�)�~��t~��1,h___\-}.1--1 f I�.�)1� 1�,:._:.::.��i�1�t.;..: ,_V.1/� 1)�..1--...Jl�1�lt:.-". ��1� I�.�)�1__1.t., () <t.-1�1�~�� 1...t,:'.1-��.�.1�...)t��1�-J.,+-�.~~ �r:J:.-.t�lt�1 C._t _'J.l[r) p-1.,-.,1�r-_~t:;r;1-. j tJ��1u t11e u.n(�:;nt.1-..~,�,;e.rted evid':jil�.>& of petitioner a.re stated as follo\~.r:::: ' i 1. Ps-titioner i:; a. multi -pu.rpo:;;:;.- cooperativ' duly organized ;::�.nd .:::�~::bUng by virtue of tlie Cooperattve Code or ttl' Pllilippines �f.r.r.:�.;...,. �,.:��.���-�~~.)-,�::,.�.,.:\ d.� l-K�1 o""t!."lt�!�l� pt::-i'I�t:'J".H"~�rtL .!;-:Ttl''v-.b~ o�1� t.'.t1-1e Pt�11�11�pp1n~.:::�;~;. It is 1177 "

DECISICN- C.L!. CASE 110. 5078 -2- under Certificate or Registration No. IL0-021, dated March 27, 1991 (E;:ll. Ft). 2. I>etitic�ner is D. licetEE?d Sugar Trader ~hitll authority� to c�pera.te a.s <:Ech tor crop yea.rs 1991-1992 under Certificate. of Regi<:-tr::J.tion No STB-92 -099, d::J.ted October 22, 1991, issued by It transacts business } Petitioner h:::t':: for it;3 rnernbers planters of sugar cane herein:::dt~::-r r.s-ferred to :::ts Produco:::-r. For crop year 1992, the }�1�=-lt�v,:::.ct""',.-; tr; .C_".]-1�C�Cc-/~-!�!- ,��.����:-:'<..+!.".:t."�."�' ~ '-� �.._.�_ ....���� �-+ h~-~.. vi 1�._t.�._::. tJ�.r....�l,:�_:.:.!�r�ltJ-..)"._".'!"C._�. ~1,:vr.v:.t-~~ ac"c<�J�l-��C0if�l'~J.f..} -~ p...�:v.t<""ti,~v�tl.v:>f ::_:,s evidenced by :::t Deed or .L!..ssignment (Exh. E). The Producer soh:l in f:?.'~7C::�r c�f tlle (:.:)c�perat.ive, petitioner herein, its produce r� r�-. -. ���A na1� c-}� At .- .. r�ac-11 -!-1- .-. t.-l.�1�.~-~. t."~� �.-:. d���n�':r::.' '�.--.' '-� 1':::' lrJ'::;.-'..-_t-1.� t-�i�'.��..Jt�"1� '.:-:.:�'1� . .r.e -I 11 r nrh..-1�'�-�~ r-�r c_ ~� H~I \~-)r<-:; . 1~- \)J. ~-" ~� .-..-..-. �"'11�1 t�an--lli�t�a �'1�,.-le:.t�t -~:,t.ctu�--�:.o�.-il'-.->::'::�., 1L��-r.'--�'�7��t��':-::�'.-.:�.r'.�--:�� :-::)-+..1. '----1� V.-...-f..:-�.+t:-:-,. 1, I_i_t..- ._ �-.-.1.- t.�J�.} tJ~.L-A- �q-~--V-�-J;r�1-!1Q~Ci <:1 ( 11-- '�- 1,v_ of sugar prc<hlcE?d. 4. By ,Iirtue of ;:tnc�ther contract more �narti.:::ularl-r,�l Special Power of petitioner t11e entire super-r,::ri::::ion and management of t11e suga.r cane produced. Petitioner in turn unclertates to have the sugar caw:. milled and t11e finished product sold. Thereafter, petitioner shall pa.y tlw producer the sum received less t11e above- mentir)nHl deductions. The corresponding quedans are issu.ed in the narne of the CooperatiT,le wit11 an annotation that it is for the (�nl�:-.r� (--.--;r�r��--r-"=<ti�l�' i'1n-'nnb.:::.r� ,.-.,f ::"JhY~nt�,t ._, .�.....�. -� ..., -� �-�l. �:=-�!� Jr-.--�.V::..r-l~1- ��� .....,. '-'� 'J�.-� ��JI.,..r~ '..\ '"~ t::f .1J t;; -..... . 1178

DEUSWR- C_! A. ClS'� NG. 5078 -3- l 1) Q__ (_~.l \f�W;:~')f�-,�_("..,.,. _ .-J.~_.?r.--Q� 1 Jr._. A then Deputy .lJ.. De.:Aerio .. it is exerrmt fron1 all taxes and fees ~ '111-->tc:.��i c��)� ���f r-��f:1.. r-.-��t�f-1' t�,e;,!�, j- t_� .l..l. �._, .l. �-� lr-��.�1-.-..�.�.it..�ti..�J-.��---��!�1 {.)- ~"-{'":"7\l�J,.j~ '��-���.i:-.�1 -:_~�,_t�..:�..:... ��- ._._r..,. -���-� \_ t�-t�-1l]J-�C�-�' (�J�~:.;'.,o:1u-l . . ,=Base-d on the foregoing and pursuant to Article 61 of the Cooperative Code, you are' exempt f.rom all taxes and fees imposed nrttls-r th' internal revenue laws and other tax laws. indude t.lle 10% ':,r;::tlue-a.dded tax V.Jllicll might be .p:::�::=:::ed )!l cr t'ill�?d tc vou by tlle seller /vendor on Tlu':: ex-e-r.nption :::hall \)e for a period of ten ( 11)) ~rear:=: on1~v.� red::.oned from tlie tiate of 'IlOUr r- registration ~,.�lith tl1e CDA �:)11 I�..1arch 27_. 1991. It is emphasized however, that the exemption of the cooperative does not extend to tho individual members thereof. x x x." (Emphasis Ours.) o. Subsequently_. in letter dat<1 Odol)er 21.. 1991, 1vlr. .\:)-.[.;�-_. , ,p_:--:.:�.�0�:.:�()�1()�(l. l-�-�<�it"TYT1 l�t1�t-V��l�rI-lt�"C�1 �r Ir)~~"il..tl..-(-)1.lt" t~l-k.�...t. 1�L,::-:. !t-k,ac.l 1~�c;vc-1.<:J;"�('j :":t' �:l1r.:-ct.ive to all personnel m tlw district ofiices especi:::tlly tllose �::;.s�::igned m t1H suga.r centrals to allov;r the T.,..,Tithdr::nva.l qf Tl'tl� t'.�n,:.:_:.. ) �nt tt-..-. r<..-��1�.'-�-�'.\�.�.".�7..-,-:.�_-�:.�."�,:.:�''�J� ~ -,:-",�].,u�-:;::.�::;..�!� ~;-)-T'�1 �,.��..\..--.' ,1-.-)�r�-�;- .�:�>f��':>�.tl�TIF'<>;;C~�' T\~ �� lt~..jl._'_J._t. f:l-C<;>; f.:-�'d~TIT' ll"lt" \�..�~1� -Llt:::' J , of the Ta.x 1179

DECISION- C.I.A. CASE NO. 5078 -4- ; �, j Exemnt.ion Certificate. Dertinent lI")' Ortion of v11l1ich reads as follo\AFS J. � " (E.xl:l. D): "In n~p1y theret(\ please be ad�vised that I 1Ewe mstruded ;:1.11 rny district oific:es, especially t.ho;::e assigned in the sugar centrals, that they may allow the withdrawal of such processed sugar by cooperatives without the prepayment of advance Value-Added Tax (VAT) upon showing of the Tax Exemption Certificate issued by our Office. Ho~Never, .#. e have alsoJ instructed t11e-m that t11ev should inform tlle coo.perative of the .pos:::ibilitv' ' that Vile either,� ( 1) Assess the indiVidual member if withdrawals are made in their individual� names considering that the exemption of the cooperative does not extend to the individual member; or (2) Assess the cooperatives themselves if proven that they have engaged in a .systematic and business-like manner the trading of such processed sugar, i.e.,� t)u.ying an(:i selling activities, etc., more so. if the funds used were borrowed. To our, mind, these activities no longer constitute t1w ordinary ancr usual functions of a cooperative but rather are the activities of a sugar trader. for t11e purpose of making profit." (Highlight Ours.) 7. In a letter dated March. 3. 1992 (Exll. H), Acting R~gional Director ivhriano A. Aguilar, Jr., warned and instructed Central. Azucarera de La Carlota. to comply with the provisions of Revenue o, Regulations He 7-89, November 1979, regarding t11e advance�, 1180

DECISION- C.I.A. CASE HO. 5078 -5- r"""fl.f'llPd a.t '�l;'l.tl"l(lrc�:-n.llrll ()"f su�-'rlr qu.o+----- n�=-�1ct�r��p.t�tt ,.-.,!- AT tl�lp. !J '-\ i T;l .1.�-� .1..11. �' �~�: ..(-~ r'"�;' !">.i. J '�" y. �" � 1- � I . - � ' ~ !,j "�" '- �6'-� � "ii,~'f.'~l\,;~" *' lJV" I�To -B };;�~l � n A p.+"lll p�-�. nr~~-0� ";~1.C-��t�l� ~ t�)� �-� �-�1 -� . -t, .- ,-. "�1 ;.:1.'-�() (h�j 1�~-�1� b~-;~r Ivia.r<:tt 3, 1992 Central }~;,zucarera de La Carlot.a 1I �� J T �:; r�itu� .L.,a! ��t_��-�_:!-_.J..-1�,.--;,_t.�...~.. �-�J. __ ,. Gent.lern.en: \ ,�. It 11as come to the attention of tllis Office t11a.t you. are alkiv�ring t.lie Vlitlldra.\l,r-al from your mill premi:;e:3 of refined sugar milled by members of La Carlota h'lill District 1vlulti-Purpose Cooperative, Inc.. \Vit11out prior aclvance payment of tlle 10% Value:.. Added Ta:i{ bv the o-v.mers/sellers thereof. in clearI . � vic�la.t.ion of SE?ction 4 of Revenue Regulations No. 7- d9 dated N�o\'er.nber f., 19i)9. ) ..1.1Jt11ougll under, .~. ..rtkie 61 of tlle Cooperative C.:xle, La. Carlot.a 1vli11 District Multi-P~1rpose C<)(.\pera.tive, Inc. may be exempt from all taxes and fees hnposed under tlle internal revenue regulations and other t:tx la~Ns, yet this exemption does not however extend to its individual members. Correspondingly~ individual members thereof cannot invoke the exemption privileges of the cooperative_ Accordingly, tlle ::;ugar ca.ne and. t11e resulting refined sugar O\~'lled by tlH;. planters- members and sold tl1roug11 tJ1e cooperative is subject to the 1O:~ Value-Added Tax ad':Jance payment prior t(.) its removal from mill premises. Attached herev,;ritll are xerox copies of letters clearly defining tile status of memt)ers of the cooperative signed by De.r.;.utv' Cornmissioners Victor Deoferio and Eufrado . 1181

DECISION- C.LA.. C.&Sf. HO. 5078 -6- S::tntc�s. dated October 1, 1991 and November 18, 1 (! �~:�j 1 t�;::.�::;r-.,:::..,��t< ~rAl>r {Jll�l.-i ;::.1��-�rp,!�l�t-ip u-�ll[Jt�r� )' ._ �-� � - �.r .,:) ,_, �-� .a. 0 .. .J. ... .� .;. .' .... �-� �-� i-� �-� �-� ,._.J. ' �-� ,.. . tr' '1'("�1'"'t1... �1:-.:1...1t.�;:'-:'. t.".~i--!A.... t_"A...!..�,.-....,..1�,::._:.. 1�!�l.,.c;. tl"1_V_ ...�..t�~.... d �V fY''lf.)!Jflpf~IT c.;;t;; rl�,"~"o' .lly ~'�lith tli.e pre�vision c.f Revenue Regu.lations No. 7-39, ot1lerv./iss. you \Vill 1"-�.:> liable th � the penalty pre::.(:ribe.J under Se(tion 255 in relation to Section 254 and 274 of th'?.' National Internal Revenue Code, ;:::ts amended. Very truly yours, (Sj::r(l.) MARIANO Ao. AGUILAR, JR.�'"I '' Actg. Regional Director Er1cls. - a./s L.:J Carlc�t:J !vH11 District I.Iu.lti-Purpose Cooperat.i~lB, Inc. F:IYf) .~ F:IJ I~~"). 51 7 de La Carlota. indi:::;crirninately applied .t.1e provisions of Revenue 10% a.dvance payment for \'AT on tl1e 'Vvitlldravv-als made by 9. By virtue of the Tax Exemption Certificate (dated Oct�:)ber 1, 1991 :~ .issued 1);.r respondent pursuant to the t:t.x exernption pnvileges granted to Cooperatives under Sec. 61 of R.A. 69}3 (Cooperati"lE' Code of tl1e Philippines) and the letter of "1 �1991 thr�-ug111'.""" t.1..'l;~:� .PL�:r_l.�i.�~r=.:..t,�1-J- \-.+��l:1~7-_tir:j�J�. :lf.l_".\�,.t.�~-()~J-.,.... ;"J:'.r {., I. 1 p}'�E-:t;J..t1.t011--"..�"f 1.) W , t.::. 1~.,..o1�un-� -�-.~:..>.. 1 '\�Vrote- Centr:::tl ,i!."zucarera de La Carlota to allow V�lithdrawals of the 1182

Dt:CISIUH- C.T .A. CA.Sf NO. 5078 -7- 1o On 1viarch 25.. 1992, petitioner tl1rou.g11 its tax consulta.nt ""~'�?rote the Regional Director of Revenue Region No. 6-B, � t�lc-t!�p,��r��.-. --, r�,.., o ....u<=>nu<=> R""'gu1atr 1.... �-�..,.. o1 t l S 1"!�\4.To . --1��~--1�-...�!J. -���-� t-r���1;:�:-�, \.�_-.�v;:::,r�fl.~. t-�t=:.>.\,1J. .L.J,...�.�, ,�.-.�."-,.�..,r�r-}l.ap.1;~:T ~�"t.t:.l-1 .1.'-t:=''s""V" '!ii;i "'."V" '(Y !.....&. 7 -.?:,q be(:;:mse it 1 a.p~)ea.rs tl1a.t the Central did not make an-.:l .. .. .a. I diEtinction bet.';~;Teen the individual member and the Cooperative. II 'J � 1 'Tl � tl- r � r -r C<=>tltral zucat�.ora r�t of i . 1 1>.;' !:1 t>�)>-.;i'tu-l~r,� ~t-1(~1 ;-;J,(_:I._.1.\~) 1 () 1 . 1~�. 1r}.:~:1, ~ .'J .J.o.. � """ de La Carlda :::a1d t11e BIR. petitioner informed tl1e Bureau tllat it shall be pa.ying the \lt1..T under protest in order not to delay the rel-t~;;J~:::e c.f the sugar (Exh. K). Thus it paid under protest the VAT from ..1;..pri1 7-24, 1992, the sum of P 1,533,317.66, itemized as follov?s: Exhibits Da.te O.R.No. Amount L 4-07-92 Ol~i7615 L p :Y)7.273.24 lvl 4-07-92 01.37616 L 327,&29.42 N 4-2 ()-~j2 0140749 L 240,599.7& 0 4-2()-(~2 0 140.)43 L &6,000.00. p 4-20-92 0140902 L 67.295.72 Q 4-20-92 01409()1 L 11(),726.00 R 4-20-92 01409()0 L 271,093.50 s 4-24-92 0 141135 L 64 ')00.00 TOTAL VAT PAID p 1.5.~5l317.66 12. On February" 11, 1994, petitioner filed a claim for On March 18, 1994 petit1�-:;,ner inf�:::.rm.::-d respondent that it is appealing its claim ior 1183

DECISION- L!.A. CAS! HO. 5078 -8 - NatL:na.1 Inte.rna.l "Revenue Code, in order to toll the running of tl1e Hence, lr"�',t� ;�:.;�.�-c���,--��-1~�1�nI.-�''-"�t'\!P�-� f-~-i-P-..t;,�l� ('-;,"-'�-1 1-(�._J.ti.� a iJ l�-l� �,.--11� r�t� :�-~-tll~I l ~�-~� l~at'tni�1�1,_g fOt" 1�P.,_.f1Ll11tJ"1. . '.1' ;"�1- �r� f"r t�wcr�,f�lr����lp..,t clat'tll ':.:-':."�v, t.�:.'!J..,. ,_�,-.\T'..j!j.-.'-.1\�1,--..)l_1. t_. t!,i1'L�1���c-� ~�-�-+l�-c--�1�-�.i�~��:-�'.iL�'�..,.-!�.�1. -.) -._.._.1..,..._. .~.tt. ... J.l. () 1 P""v'tit.t('J��t1.P, .f�~~ r ......., st�=-t nt ,�1 ,t."'=.-:.;f',1.1. dt"�-., 1r....u....t..1�''L-i��..�.��r�i��w�.�t�� !"1'1.:�:-:�:�,�,--+l �..�...<!.1 f.'..}..-1�C.,:. �C-��":>:!1.�I1'=��:�::'1.j�~:t:1;;1.tJ:-3. t~tJ1. e�:~�. 1.J~.i. ,_, T1J� vP.titl�('..)n for� ri-"'f�::;'�llt T----T� 1r��.�.�,-�-���..t.t�.l r�J-.-.o,.,�.-�.-�-.t"-.iL<�..�...�-.rt.�l ,--.-�~'..f1 1r�.-.��':�"�.':-:'tttl�:_..-�J,._t.���.1::-:.�:.,t�.t .t...�t�::�:'�-.c,~ 1n_.�-�c�-t�lt.�.+�l�.�;-:�.,1+1��t -,;i.��t~~c1..-_, f.j-:":.;-..r.,�.l-r=J.-t-.P�. .d 1.11 ... t:7 ,:.s.._____ -.!�1�' e _. t��-�r� a ~1r�,1.~!:,::r' ��!�::�-�'�:�..11�.+r..t-:."1� .. <t.-.tt.-L,.t�:.' .t.! 1 ;:� t�\~��l1l �n.LJ..-;~�. t��t-t f...} r�e:.c..�l111t1� (-..J..~..,I b�~;1r tllP>,.. r._�.r.)_l'J1. f t 1�11 ..... ._.,__, _ :.1' 'J '.---+l"=.�"�fd�-l�.��.1Lt� 1 1 1�:� �,',-1''�.--+i1'-_::,,..d��l':;�;~'t-L�r�� tu~T�,- Utd� �.�.��~-';--::'[ .�.:::�''r=:.:t''-t~�J�.���.A-l (�J�1� ;D;-�U.l.P,. () 0 f tllE:�? R-P.v>V l�~c�'.=.:~:''d f :Rules c.f Court is t(:< determine petitioner's entitlement to the clairn. Tv'-titl� T~ l�1�._:::.:, 1..�:-�'C�-��lLl,�~�~ 1.~.:��"11.Lt"i.i1.t..:�-�:v.,.-�.1+ t�..,..)-. "�=,�l,�1;i-1..:�:.:�.t�l�lvP.f- (.)f 1�1(.�1. t� I-"<:; �c-.";�1�!o"::';�t� 1.S '"V"'f1t1�tl"<-:;r.}� to claim for the refund of P 1513,317.66, representing :=1nrlt.11P>c'�4 . 1�!-,)�tn A.nt-il lq()') p�...�t.L�r.;.... .�-~�.riP-r.~)l�.J'=.��.lJ�~Ir� '-"� ._ 111 AT ~ �-� ;=~'-.J..i.:lT ,�-~� r.�_,. 1P> 1 -..~..t~e..:..-...,....-..,1.t. T\11 .c-.1. ., /_').t. � ':) '-' � ._. L .i. ,["" .i. f '-' .L 1 i�. close scrutiny (1f the evidence presented by petitioner \'lill s110\1'' that petitioner indeed pa.id the VAT from the period April 7-2 4, 1992 (see Exhs. L to S, inclusive). Central Azuca.rera de La. Ca.rlcta. cc~lleded frotn petitioner the 10% VAT on all of its Vlithdra.\"lal .of refined sugar. for the said period in t11e total It \�Vas only after tlw Central received the lett>?r. dated Mardi 3., 1992, coming from t11e Regional Office of tlw P.IE that it started to collect the 10% VAT from petitioner. 1184

DICISIOH- C.T .A. CASE NO. )078 -9- rna.in1y� c�n t1w last. par::t.graph of the said letter instructing it to � comply strf.:::t.ly 'Nith the pn)vision c�f Revenue Regulations No. 7- �na!tano �lar Jt� Acting (')):n.�. .,1.!..�~..',::.:..' 1�1-L-.1r_-..�..�_..;-..:�.L;..1�.�-A.-l H�k-f-.~r~����ie-�:. tJ-~y~ I''"11-!. 1-.f~ -� A LtL.6r..Ul 1 ., iL. r�� -- - - � rD-.e- g-�.j.o- r-r:L1 :11 er:_-:-,_~-..:_:.t . '-1�-PO- �l-l t..i.�1e- ,i-_. -.e-nt.xa1 1�:~:. c1e~ at-1~l c1b� -...~.:-ert.-tH�'J�te� 1�1� r� - e ta.rh... - 1. c�tl�hlJld rj;>.a��l toa,.:,.the:.r 1�t �"�!" TJ. .t..."! '���.-�,�'t-.}..�.�~.t:: T�,.yItT._-�."�r��_r.il.e�.J:J -� �..; -�.) � .. t)�.�J~' -..� t._ OV \ol'l 'C=" 1--,��!-,�-.---..�''',1: . c�-�'~i'-.)-..,i�.-J,. rega.rding the exernptions enjoyed by �,Tl. \'�( H'.J.-1 H'-�J.-1..:_:,:.. ����rl nf not wrr...end to Tll?:� J.._~..,. y��-��,Ir--\,�:-�:..:..�t-���:-.~.-.�.ti~ ~!�.A; C�-'�. �-� p�-�y...;...:.-:..-1��1-J�.1,r-��,-t-i~'--� -� r�--�.--~��._,J�1�.1�'n�;-�::.~r-.-o:ltivt~:.-:'c,_-; r�-}c.-,-::._:..c�-�' A~ r > it::: indiv�idual mernbers. Therefore} individual members cannot in fad admitted t11at .o,..1r..J_t.ln/ ..-J...c....-:~,._t.::.:-.:!.�.�1 t.tJ�.ir.:-lt~� t .- .-..i. ~-'�j��1r.�.u...-.;+..1r�-.1_.�.-~!-1 ~-i.d-..,:-�. cooperat.i\'E=<::;, lite petitioner's herein. have tlle privilege of tax exetnnLt'"f.:::.ns and to tllat effect correSTl)'"Ondin2"._1. V' issued a Tax Exenrption Certificate in favor of petitioner} pursuant to Section b- 1 c��I� C<)'�lc. til"" fi � .Df'\. �.L1!..oL. (��-�;(�l��.:_:} ._. �' (��jth��,L:J:.:.��r.�-.;;~,-;,ic.1-.�,-~.:�:-�. !t''.�:.r..�l(J��.'~~�t-1 �,:_"J,.-_=-. tt:J�. J.<~~ C._t,���.F~V�rl">' ~vr;:o~tfA'u<Y:':\.i '"-.f.V (if 'li:P 'J Philippines, 'Nhich provides: -ART. 61. Tax Treatment of Cooperatives. - Duly registered cooperatives under tl1is Code "'i1-lhicll do not transact any business with nonmembers or t.lle general public sllall not be subject to any government taxes <~�r fees imposed under the internal revenue la'ws and other tax laVv>s. (\)operatives not falling under t11is article shall be governed by tlle succeeding section.- Tc� assure, 11o�v-1ever, that the pri1.rilege is not abused or .t..".. f�--.�1�'��-"��]--��jll"lT~T,P.....!"l.t..A...��1�' tl10 respondent's Acting Regional Director \._ in::tru.ct.ecl the Central to co11ed tlle 10% VAT on the sugar cane 1~!11"1�1~ ,~:�:.,�.--l� t-., ,I , tl"l(:;.. pla.ntB-r -members and reiterated t11at the f.� -� �-� 1185

DECISION- .... C.I.A. CASE HG. 5078 / - 10 - exenrrr-)tion of (:()C..�Derati,,;es does -no-t extend to the individual I letter ;:JS Vlou.ld adeou;:tt.elv describe tlle reason for the ! I drcurrr::tJ.w::e for t11e enjoyment, of t11e privilege extended to cocperativt:-::: Tlw reasc,:t1 is plain. Only the cooperatives are !I The. directive is f�:::.r the Central to impose the 10% VAT r�nill;::..--1 t,v -.�;'p~�1�.s�.r�.��, '-! ':~l�t.�h.l....L-�~.+t.�L::�;-~~.'~,.�..r.;::..�f.ito"lol.;.....:._-�--.�--�.1+ c._r-.p_��cc.;�.�..:..if J. l. ........+ i t.t..-!1;:..:.,.. 1-I-~l."~."~'I-ibP._. t"S tl1c..._!.n<=~�-~">l1� 1..,"- S . '<,i.le a.re not to (:oniuse about ~,~lhat seems feasible (on t11e part of the Central) 'Nitll about vTlB.t is rig:ht. As a matter of fact, we are H- v-.t+. i t...�H- 1r+h���>�;c::;�"�._-.:�::-.':~;:"'.---+l tk-.-'}� t_l.��1.- .t.."l�-A~ l-�.�.�}�t�)._c.-t;~:;"t-van(_-.>,;_:_;_" of th-e Cenwf-.t-a1 1. n l recog_nizin:;-~_�., the exen1Tr��:;tion !u2Tanted to cooperatives b~;1r its fear of .being penalized under Section 255 in relation to Section 254 and. rif . _'.=:."..' ..t..L-~i ..... t-l� "l.p_,. 1li,'T4"-:-,t\;w,r...,.f.1...1':�1J.1... Tl!"l.t..p._,t.."�t. -..�..�.rl.--.\1L R~P--~� {P�~t� lll�.vPl-'v n�-d�P.r. Tlle 10% V..~:..T ir.nposed upon the vv'ithdravrol of refined sugar made ty tile petitioner falls flatly in conflict with the 1a1<VT granting its tm( exernption (Section 61 of RA 693&). The blindness of the Central cannot be excused. We uphold the plain interpretation of the language of the lvlarch .} 1992 letter. Thus, no ot11er construction should be given. After having � established its exemption from taxes, � .--� pd.itioner liteNi~:e has proven by sufficient evidence tllat it bad erroneously p;:::dd t1w �v.~.:. T from April 7-24, 1992 (Ex.hs. L to S, 118G

DECISION- C.LA. CA.SE NO_ 5078 - l! - inclusive) :::md therefore is entitled to the refund sought for by WHEREFORE, the (:,:)JJrt finds the petition t::\,be meritorious and in accon:lance Vlitll la:\<ll, the same is hereby GRANTED.� Resp(:�ndent is ordered t:) refund in favor of petitioner the amount ;���t- 1 17 id V'lllUe- .._dde(l p.a� ._. , D~ ,,_c1-',. �--�~� �--~�'�' .�_:<J ' ..f..,.f:..;~' .n..:.�.n!t���.::..c..:�r-�:=�.�-t�...;t.l,.tlO0" .,..:..:.rrr,�.,nr:..=.-.,_.r�,u-.cJ�tI~T.....,,�A"'.lA lJ.}'4 f.)- T!"")f"'.r_J.t}r�.�J]J�"t'�1,�-~�-�..,..::.t�I-1...,.::.!�lt "1'=. 4J- ).-J. r..�, r�-;� c�..J�t-�� l_ �-' lI J SO ORDERED. ~~Q-~ ERNESTO D_ ACOSTA Presiding Judge WE CONCUR: I

DECISION- C.T..A. CASE NO. 5078 - 12 - CERTIFICATION I 1leretv, certifv' that this decision Tvvas reached after due t�,--,.-. h \-~--�,-.�-.J,..-i�_=_,�1.1�.11�.�-�. -�L��ll ,�:J t-11,.�--�,t-(:.-:.,� t-l�1t=~>� r�1�-1-t.=�>.L�-f�lt,t=� >-~t��::�;J: ,--~f t11-~~ . ~.,llt�t of TCa: x App""'WaCl:-=w- 1�n � ��-� .._.\_. r� t"" d--~~C- v-...-.L.�--�--- Id--.t-l�'----1- :-::-' tl� T'I�'!T1� _. l <.;::;{~:-;,-,-~��_t.l�..,.-~t-1 1�-;; , h,., t�t1_.�c,�lt=~>- v~ I II (~) -ll-t=~> C�-"-.)r�1-r:�-tituti�011 . ~- ~ . ~ ~~ G....c-..c- ERNESTO D. ACOSTA Presiding Judge II -' Court of Tax Appeals �;- 1188