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    CIR Vs CA

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    Jazem Ansama
    COMASERCO provided collection, consultative, and technical services to Philamlife and its affiliates. The Bureau of Internal Revenue issued an assessment for deficiency value-added tax against COMASERCO for tax year 1988. COMASERCO contested the assessment, arguing it was non-profit and not engaged in business. The Court of Tax Appeals and the Court of Appeals both ruled against COMASERCO. The Supreme Court affirmed, holding that even non-profit entities must pay VAT when providing services for consideration, as COMASERCO was doing in performing services for Philamlife. The services COMASERCO provided did not fall under any VAT exemptions.

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    CIR Vs CA

    Uploaded by

    Jazem Ansama
    617 views1 page
    COMASERCO provided collection, consultative, and technical services to Philamlife and its affiliates. The Bureau of Internal Revenue issued an assessment for deficiency value-added tax against COMASERCO for tax year 1988. COMASERCO contested the assessment, arguing it was non-profit and not engaged in business. The Court of Tax Appeals and the Court of Appeals both ruled against COMASERCO. The Supreme Court affirmed, holding that even non-profit entities must pay VAT when providing services for consideration, as COMASERCO was doing in performing services for Philamlife. The services COMASERCO provided did not fall under any VAT exemptions.

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    Tax 2

    Original Title

    CIR vs CA (2)

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    COMASERCO provided collection, consultative, and technical services to Philamlife and its affiliates. The Bureau of Internal Revenue issued an assessment for deficiency value-added tax against COMASERCO for tax year 1988. COMASERCO contested the assessment, arguing it was non-profit and not engaged in business. The Court of Tax Appeals and the Court of Appeals both ruled against COMASERCO. The Supreme Court affirmed, holding that even non-profit entities must pay VAT when providing services for consideration, as COMASERCO was doing in performing services for Philamlife. The services COMASERCO provided did not fall under any VAT exemptions.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    617 views1 page

    CIR Vs CA

    Uploaded by

    Jazem Ansama
    COMASERCO provided collection, consultative, and technical services to Philamlife and its affiliates. The Bureau of Internal Revenue issued an assessment for deficiency value-added tax against COMASERCO for tax year 1988. COMASERCO contested the assessment, arguing it was non-profit and not engaged in business. The Court of Tax Appeals and the Court of Appeals both ruled against COMASERCO. The Supreme Court affirmed, holding that even non-profit entities must pay VAT when providing services for consideration, as COMASERCO was doing in performing services for Philamlife. The services COMASERCO provided did not fall under any VAT exemptions.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Jazem A.

    Ansama

    11186631

    CIR vs. CA and Comaserco


    G.R. No. 125355
    March 30, 2000
    Facts:
    Commonwealth Management and Services Corporation (COMASERCO) is a domestic
    corporation. It is an affiliate of Philippine American Life Insurance Co. (Philamlife). It was
    organized by the latter to perform collection, consultative and other technical services, including
    functioning as an internal auditor, of Philamlife and its other affiliates.
    In 1992, the Bureau of Internal Revenue (BIR) issued an assessment to private
    respondent COMASERCO for deficiency value-added tax (VAT) amounting to P351,851.00 for
    taxable year 1988. In the same year, COMASERCO filed with the BIR, a letter-protest objecting
    to the latters finding of deficiency VAT. Afterwards, the Commissioner of Internal Revenue sent
    a collection letter to COMASERCO demanding payment of the deficiency VAT. The following
    month of the same year, COMASERCO filed with the CTA a petition for review contesting the
    Commissioners assessment. COMASERCO asserted that: 1) it was on a no-profit,
    reimbursement-of-cost-only basis; 2) it was not engaged in the business of providing services
    to Philamlife and its affiliates; 3) COMASERCO was established to ensure operational
    orderliness and administrative efficiency of Philamlife and its affiliates, not on the sale of
    services; and 4) it even did not generate profit but suffered a net loss in taxable year 1988.
    Thus, it was not liable to pay VAT.
    In 1995, the CTA rendered a decision in favor of the Commissioner with slight
    modifications. COMASERCO was liable to pay the amount of P335,831.01. During the same
    year, COMASERCO filed with the CA, a petition for review of the decision of the CTA. The CA
    ruled in favor of the respondent and based its decision in another tax case involving the same
    parties where it was held that COMASERCO was not liable to pay fixed and contractors tax and
    it was not engaged in business of providing services to Philamlife and its affiliates. Hence, this
    petition was filed before the SC.
    Issue:
    Whether or not COMASERCO is engaged in the sale of services, thus liable to pay VAT.
    Held:
    Yes. Contrary to COMASERCOs contention, Sec. 105 of the Tax Code states that even
    a non-stock, non-profit, organization or government entity, is liable to pay VAT on the sale of
    goods or services. VAT is a tax on transactions, imposed at every stage of the distribution
    process on the sale, barter, exchange of goods or property, and on the performance of services,
    even in the absence of profit attributable thereto. The term in the course of trade or business
    requires the regular conduct or pursuit of a commercial or an economic activity, regardless of
    whether or not the entity is profit-oriented.
    As long as the entity provides service for a fee, remuneration or consideration, then the
    service rendered is subject to VAT. Because taxes are the lifeblood of the nation, statutes that
    allow exemptions are construed strictly against the grantee and liberally in favor of the
    government. Section 109 of the Tax Code enumerates the transactions exempted from VAT. The
    services rendered by COMASERCO do not fall within the exemptions. It falls under Section 108
    of the Tax Code in which it defines the phrase sale of services as the performance of all kinds
    of services for others for a fee, remuneration or consideration.

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