COMMISSIONER OF INTERNAL REVENUE,petitioner,vs. COURT OF APPEALS and COMMONWEALTH MANAGEMENT AND SERVICES CORPORATION,respondents.CourtPARDO,J.:What is before the Court is a petition for review oncertiorariof the decision of the Court of Appeals,[1]reversing that of the Court of Tax Appeals,[2]which affirmed with modification the decision of the Commissioner of Internal Revenue ruling that Commonwealth Management and Services Corporation, is liable for value added tax for services to clients during taxable year 1988.Commonwealth Management and Services Corporation (COMASERCO, for brevity), is a corporation duly organized and existing under the laws of the Philippines. It is an affiliate of Philippine American Life Insurance Co. (Philamlife), organized by the letter to perform collection, consultative and other technical services, including functioning as an internal auditor, of Philamlife and its other affiliates.On January 24, 1992, the Bureau of Internal Revenue (BIR) issued an assessment to private respondent COMASERCO for deficiency value-added tax (VAT) amounting to P351,851.01, for taxable year 1988, computed as follows:"Taxable sale/receiptP1,679,155.0010% tax due thereon167,915.5025% surcharge41,978.8820% interest per annum125,936.63Compromise penalty for late payment16,000.00TOTAL AMOUNT DUE AND COLLECTIBLEP 351,831.01"[3]COMASERCO's annual corporate income tax return ending December 31, 1988 indicated anet loss in its operationsin the amount of P6,077.00.J lexjOn February 10, 1992, COMASERCO filed with the BIR, a letter-protest objecting to the latter's finding of deficiency VAT. On August 20, 1992, the Commissioner of Internal Revenue sent a collection letter to COMASERCO demanding payment of the deficiency VAT.On September 29,1992, COMASERCO filed with the Court of Tax Appeals[4]a petition for review contesting the Commissioner's assessment. COMASERCO asserted that the services it rendered to Philamlife and its affiliates, relating to collections, consultative and other technical assistance, including functioning as an internal auditor, were on a "no-profit, reimbursement-of-cost-only" basis. It averred that it was not engaged id the business of providing services to Philamlife and its affiliates. COMASERCO was established to ensure operational orderliness and administrative efficiency of Philamlife and its affiliates, and not in the sale of services. COMASERCO stressed that it was not profit-motivated, thus not engaged in business. In fact, it did not generate profit but suffered a net loss in taxable year 1988. COMASERCO averred that since it was not engaged in business, it was not liable to pay VAT.On June 22, 1995, the Court of Tax Appeals rendered decision in favor of the Commissioner of Internal Revenue, the dispositive portion of which reads:"WHEREFORE, the decision of the Commissioner of Internal Revenue assessing petitioner deficiency value-added tax for the taxable year 1988 is AFFIRMED with slight modifications. Accordingly, petitioner is ordered to pay respondent Commissioner of Internal Revenue the amount of P335,831.01 inclusive of the 25% surcharge and interest plus 20% interest from January 24, 1992 until fully paid pursuant to Section 248 and 249 of the Tax Code."The compromise penalty of P16,000.00 imposed by the respondent in her assessment letter shall not be included in the payment as there was no compromise agreement entered into between petitioner and respondent with respect to the value-added tax deficiency."[5]On July 26, 1995, respondent filed with the Court of Appeals, petition for review of the decision of the Court of Appeals.After due proceedings, on May 13, 1996, the Court of Appeals rendered decision reversing that of the Court of Tax Appeals, the dispositive portion of which reads:Lexj uris"WHEREFORE, in view of the foregoing, judgment is hereby rendered REVERSING and SETTING ASIDE the questioned Decision promulgated on 22 June 1995. The assessment for deficiency value-added tax for the taxable year 1988 inclusive of surcharge, interest and penalty charges are ordered CANCELLED for lack of legal and factual basis."[6]The Court of Appeals anchored its decision on the ratiocination in another tax case involving the same parties,[7]where it was held that COMASERCO was not liable to pay fixed and contractor's tax for services rendered to Philamlife and its affiliates. The Court of Appeals, in that case, reasoned that COMASERCO was not engaged in business of providing services to Philamlife and its affiliates. In the same manner, the Court of Appeals held that COMASERCO was not liable to pay VAT for it was not engaged in the business of selling services.On July 16, 1996, the Commissioner of Internal Revenue filed with this Court a petition for review on certiorari assailing the decision of the Court of Appeals.On August 7, 1996, we required respondent COMASERCO to file comment on the petition, and on September 26, 1996, COMASERCO complied with the resolution.[8]We give due course to the petition.At issue in this case is whether COMASERCO was engaged in the sale of services, and thus liable to pay VAT thereon.Petitioner avers that to "engage in business" and to "engage in the sale of services" are two different things. Petitioner maintains that the services rendered by COMASERCO to Philamlife and its affiliates, for a fee or consideration, are subject to VAT. VAT is a tax on the value added by the performance of the service. It is immaterial whether profit is derived from rendering the service.Juri smisWe agree with the Commissioner.Section 99 of the National Internal Revenue Code of 1986, as amended by Executive Order (E.O.) No. 273 in 1988, provides that:"Section 99. Persons liable.- Any person who, in the course of trade or business, sells, barters or exchanges goods, renders services, or engages in similar transactions and any person who imports goods shall be subject to the value-added tax (VAT) imposed in Sections 100 to 102 of this Code."[9]COMASERCO contends that the term "in the course of trade or business" requires that the "business" is carried on with a view to profit or livelihood. It avers that the activities of the entity must be profit- oriented. COMASERCO submits that it is not motivated by profit, as defined by its primary purpose in the articles of incorporation, stating that it is operating "only on reimbursement-of-cost basis, without any profit." Private respondent argues that profit motive is material in ascertaining who to tax for purposes of determining liability for VAT.We disagree.On May 28, 1994, Congress enacted Republic Act No. 7716, the Expanded VAT Law (EVAT), amending among other sections, Section 99 of the Tax Code. On January 1, 1998, Republic Act 8424, the National Internal Revenue Code of 1997, took effect. The amended law provides that:"SEC. 105. Persons Liable. - Any person who, in the course of trade or business, sells, barters, exchanges, leases goods or properties, renders services, and any person who imports goods shall be subject to the value-added tax (VAT) imposed in Sections 106 and 108 of this Code."The value-added tax is an indirect tax and the amount of tax may be shifted or passed on to the buyer, transferee or lessee of the goods, properties or services. This rule shall likewise apply to existing sale or lease of goods, properties or services at the time of the effectivity of Republic Act No.7716."The phrase "in the course of trade or business" means the regular conduct or pursuit of a commercial or an economic activity, including transactions incidental thereto, by any person regardless of whether or not the person engaged therein is a nonstock, nonprofit organization (irrespective of the disposition of its net income and whether or not it sells exclusively to members of their guests), or government entity.Jjj uris"The rule of regularity, to the contrary notwithstanding, services as defined in this Code rendered in the Philippines by nonresident foreign persons shall be considered as being rendered in the course of trade or business."Contrary to COMASERCO's contention the above provision clarifies that even anon-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.The definition of the term "in the course of trade or business" incorporated in the present law applies to all transactions even to those made prior to its enactment. Executive Order No. 273 stated that any person who, in the course of trade or business, sells, barters or exchanges goods and services, was already liable to pay VAT. The present law merely stresses that even a nonstock, nonprofit organization or government entity is liable to pay VAT for the sale of goods and services.Section 108 of the National Internal Revenue Code of 1997[10]defines the phrase "sale of services" as the "performance of all kinds of services for others for a fee, remuneration or consideration." It includes "the supply of technical advice, assistance or services rendered in connection with technical management or administration of any scientific, industrial or commercial undertaking or project."[11]On February 5, 1998, the Commissioner of Internal Revenue issued BIR Ruling No. 010-98[12]emphasizing that a domestic corporation that provided technical, research, management and technical assistance to its affiliated companies and received payments on a reimbursement-of-cost basis, without any intention of realizing profit, was subject to VAT on services rendered. In fact, even if such corporation was organized without any intention of realizing profit, any income or profit generated by the entity in the conduct of its activities was subject to income tax.lexHence, it is immaterial whether the primary purpose of a corporation indicates that it receives payments for services rendered to its affiliates on a reimbursement-on-cost basis only, without realizing profit, for purposes of determining liability for VAT on services rendered. As long as the entity provides service for a fee, remuneration or consideration, then the service rendered is subject to VAT.At any rate, it is a rule that 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. Otherwise stated, any exemption from the payment of a tax must be clearly stated in the language of the law; it cannot be merely implied therefrom.[13]In the case of VAT, Section 109, Republic Act 8424 clearly enumerates the transactions exempted from VAT. The services rendered by COMASERCO do not fall within the exemptions.Both the Commissioner of Internal Revenue and the Court of Tax Appeals correctly ruled that the services rendered by COMASERCO to Philamlife and its affiliates are subject to VAT. As pointed out by the Commissioner, the performance of all kinds of services for others for a fee, remuneration or consideration is considered as sale of services subject to VAT. As the government agency charged with the enforcement of the law, the opinion of the Commissioner of Internal Revenue, in the absence of any showing that it is plainly wrong, is entitled to great weight.[14]Also, it has been the long standing policy and practice of this Court to respect the conclusions of quasi-judicial agencies, such as the Court of Tax Appeals which, by the nature of its functions, is dedicated exclusively to the study and consideration of tax cases and has necessarily developed an expertise on the subject, unless there has been an abuse or improvident exercise of its authority.[15]There is no merit to respondent's contention that the Court of Appeals' decision in CA-G. R. No. 34042, declaring the COMASERCO as not engaged in business and not liable for the payment of fixed and percentage taxes, binds petitioner. The issue in CA-G. R. No. 34042 is different from the present case, which involves COMASERCO's liability for VAT. As heretofore stated, every person who sells, barters, or exchanges goods and services, in the course of trade or business, as defined by law, is subject to VAT.JksmWHEREFORE, the Court GRANTS the petition and REVERSES the decision of the Court of Appeals in CA-G. R. SP No. 37930. The Court hereby REINSTATES the decision of the Court of Tax Appeals in C. T. A. Case No. 4853.No costs.SO ORDERED.G.R. No. 146984 July 28, 2006COMMISSIONER OF INTERNAL REVENUE,petitioner,vs.MAGSAYSAY LINES, INC., BALIWAG NAVIGATION, INC., FIM LIMITED OF THE MARDEN GROUP (HK) and NATIONAL DEVELOPMENT COMPANY,respondents.D E C I S I O NTINGA,J.:The issue in this present petition is whether the sale by the National Development Company (NDC) of five (5) of its vessels to the private respondents is subject to value-added tax (VAT) under the National Internal Revenue Code of 1986 (Tax Code) then prevailing at the time of the sale. The Court of Tax Appeals (CTA) and the Court of Appeals commonly ruled that the sale is not subject to VAT. We affirm, though on a more unequivocal rationale than that utilized by the rulings under review. The fact that the sale was not in the course of the trade or business of NDC is sufficient in itself to declare the sale as outside the coverage of VAT.The facts are culled primarily from the ruling of the CTA.Pursuant to a government program of privatization, NDC decided to sell to private enterprise all of its shares in its wholly-owned subsidiary the National Marine Corporation (NMC). The NDC decided to sell in one lot its NMC shares and five (5) of its ships, which are 3,700 DWT Tween-Decker, "Kloeckner" type vessels.1The vessels were constructed for the NDC between 1981 and 1984, then initially leased to Luzon Stevedoring Company, also its wholly-owned subsidiary. Subsequently, the vessels were transferred and leased, on a bareboat basis, to the NMC.2The NMC shares and the vessels were offered for public bidding. Among the stipulated terms and conditions for the public auction was that the winning bidder was to pay "a value added tax of 10% on the value of the vessels."3On 3 June 1988, private respondent Magsaysay Lines, Inc. (Magsaysay Lines) offered to buy the shares and the vessels forP168,000,000.00. The bid was made by Magsaysay Lines, purportedly for a new company still to be formed composed of itself, Baliwag Navigation, Inc., and FIM Limited of the Marden Group based in Hongkong (collectively, private respondents).4The bid was approved by the Committee on Privatization, and a Notice of Award dated 1 July 1988 was issued to Magsaysay Lines.On 28 September 1988, the implementing Contract of Sale was executed between NDC, on one hand, and Magsaysay Lines, Baliwag Navigation, and FIM Limited, on the other. Paragraph 11.02 of the contract stipulated that "[v]alue-added tax, if any, shall be for the account of the PURCHASER."5Per arrangement, an irrevocable confirmed Letter of Credit previously filed as bidders bond was accepted by NDC as security for the payment of VAT, if any. By this time, a formal request for a ruling on whether or not the sale of the vessels was subject to VAT had already been filed with the Bureau of Internal Revenue (BIR) by the law firm of Sycip Salazar Hernandez & Gatmaitan, presumably in behalf of private respondents. Thus, the parties agreed that should no favorable ruling be received from the BIR, NDC was authorized to draw on the Letter of Credit upon written demand the amount needed for the payment of the VAT on the stipulated due date, 20 December 1988.6In January of 1989, private respondents through counsel received VAT Ruling No. 568-88 dated 14 December 1988 from the BIR, holding that the sale of the vessels was subject to the 10% VAT. The ruling cited the fact that NDC was a VAT-registered enterprise, and thus its "transactions incident to its normal VAT registered activity of leasing out personal property including sale of its own assets that are movable, tangible objects which are appropriable or transferable are subject to the 10% [VAT]."7Private respondents moved for the reconsideration of VAT Ruling No. 568-88, as well as VAT Ruling No. 395-88 (dated 18 August 1988), which made a similar ruling on the sale of the same vessels in response to an inquiry from the Chairman of the Senate Blue Ribbon Committee. Their motion was denied when the BIR issued VAT Ruling Nos. 007-89 dated 24 February 1989, reiterating the earlier VAT rulings. At this point, NDC drew on the Letter of Credit to pay for the VAT, and the amount ofP15,120,000.00 in taxes was paid on 16 March 1989.On 10 April 1989, private respondents filed an Appeal and Petition for Refund with the CTA, followed by a Supplemental Petition for Review on 14 July 1989. They prayed for the reversal of VAT Rulings No. 395-88, 568-88 and 007-89, as well as the refund of the VAT payment made amounting toP15,120,000.00.8The Commissioner of Internal Revenue (CIR) opposed the petition, first arguing that private respondents were not the real parties in interest as they were not the transferors or sellers as contemplated in Sections 99 and 100 of the then Tax Code. The CIR also squarely defended the VAT rulings holding the sale of the vessels liable for VAT, especially citing Section 3 of Revenue Regulation No. 5-87 (R.R. No. 5-87), which provided that "[VAT] is imposed on any sale or transactions deemed sale of taxable goods (including capital goods, irrespective of the date of acquisition)." The CIR argued that the sale of the vessels were among those transactions "deemed sale," as enumerated in Section 4 of R.R. No. 5-87. It seems that the CIR particularly emphasized Section 4(E)(i) of the Regulation, which classified "change of ownership of business" as a circumstance that gave rise to a transaction "deemed sale."In a Decision dated 27 April 1992, the CTA rejected the CIRs arguments and granted the petition.9The CTA ruled that the sale of a vessel was an "isolated transaction," not done in the ordinary course of NDCs business, and was thus not subject to VAT, which under Section 99 of the Tax Code, was applied only to salesin the course of trade or business. The CTA further held that the sale of the vessels could not be "deemed sale," and thus subject to VAT, as the transaction did not fall under the enumeration of transactions deemed sale as listed either in Section 100(b) of the Tax Code, or Section 4 of R.R. No. 5-87. Finally, the CTA ruled that any case of doubt should be resolved in favor of private respondents since Section 99 of the Tax Code which implemented VAT is not an exemption provision, but a classification provision which warranted the resolution of doubts in favor of the taxpayer.The CIR appealed the CTA Decision to the Court of Appeals,10which on 11 March 1997, rendered a Decision reversing the CTA.11While the appellate court agreed that the sale was an isolated transaction, not made in the course of NDCs regular trade or business, it nonetheless found that the transaction fell within the classification of those "deemed sale" under R.R. No. 5-87, since the sale of the vessels together with the NMC shares brought about a change of ownership in NMC. The Court of Appeals also applied the principle governing tax exemptions that such should be strictly construed against the taxpayer, and liberally in favor of the government.12However, the Court of Appeals reversed itself upon reconsidering the case, through a Resolution dated 5 February 2001.13This time, the appellate court ruled that the "change of ownership of business" as contemplated in R.R. No. 5-87 must be a consequence of the "retirement from or cessation of business" by the owner of the goods, as provided for in Section 100 of the Tax Code. The Court of Appeals also agreed with the CTA that the classification of transactions "deemed sale" was a classification statute, and not an exemption statute, thus warranting the resolution of any doubt in favor of the taxpayer.14To the mind of the Court, the arguments raised in the present petition have already been adequately discussed and refuted in the rulings assailed before us. Evidently, the petition should be denied. Yet the Court finds that Section 99 of the Tax Code is sufficient reason for upholding the refund of VAT payments, and the subsequent disquisitions by the lower courts on the applicability of Section 100 of the Tax Code and Section 4 of R.R. No. 5-87 are ultimately irrelevant.A brief reiteration of the basic principles governing VAT is in order. VAT is ultimately a tax on consumption, even though it is assessed on many levels of transactions on the basis of a fixed percentage.15It is the end user of consumer goods or services which ultimately shoulders the tax, as the liability therefrom is passed on to the end users by the providers of these goods or services16who in turn may credit their own VAT liability (or input VAT) from the VAT payments they receive from the final consumer (or output VAT).17The final purchase by the end consumer represents the final link in a production chain that itself involves several transactions and several acts of consumption. The VAT system assures fiscal adequacy through the collection of taxes on every level of consumption,18yet assuages the manufacturers or providers of goods and services by enabling them to pass on their respective VAT liabilities to the next link of the chain until finally the end consumer shoulders the entire tax liability.Yet VAT is not a singular-minded tax on every transactional level. Its assessment bears direct relevance to the taxpayers role or link in the production chain. Hence, as affirmed by Section 99 of the Tax Code and its subsequent incarnations,19the tax is levied only on the sale, barter or exchange of goods or services by persons who engage in such activities,in the course of trade or business. These transactions outside the course of trade or business may invariably contribute to the production chain, but they do so only as a matter of accident or incident. As the sales of goods or services do not occur within the course of trade or business, the providers of such goods or services would hardly, if at all, have the opportunity to appropriately credit any VAT liability as against their own accumulated VAT collections since the accumulation of output VAT arises in the first place only through the ordinary course of trade or business.That the sale of the vessels was not in the ordinary course of trade or business of NDC was appreciated by both the CTA and the Court of Appeals, the latter doing so even in its first decision which it eventually reconsidered.20We cite with approval the CTAs explanation on this point:InImperial v. Collector of Internal Revenue, G.R. No. L-7924, September 30, 1955 (97 Phil. 992), the term "carrying on business" does not mean the performance of a single disconnected act, but means conducting, prosecuting and continuing business by performing progressively all the acts normally incident thereof; while "doing business" conveys the idea of business being done, not from time to time, but all the time. [J. Aranas, UPDATED NATIONAL INTERNAL REVENUE CODE (WITH ANNOTATIONS), p. 608-9 (1988)]. "Course of business" is what is usually done in the management of trade or business. [Idmi v. Weeks & Russel, 99 So. 761, 764, 135 Miss. 65, cited in Words & Phrases, Vol. 10, (1984)].What is clear therefore, based on the aforecited jurisprudence, is that "course of business" or "doing business" connotes regularity of activity. In the instant case, the sale was an isolated transaction. The sale which was involuntary and made pursuant to the declared policy of Government for privatization could no longer be repeated or carried on with regularity. It should be emphasized that the normal VAT-registered activity of NDC is leasing personal property.21This finding is confirmed by the Revised Charter22of the NDC which bears no indication that the NDC was created for the primary purpose of selling real property.23The conclusion that the sale was not in the course of trade or business, which the CIR does not dispute before this Court,24should have definitively settled the matter. Any sale, barter or exchange of goods or servicesnot in the course of trade or businessis not subject to VAT.Section 100 of the Tax Code, which is implemented by Section 4(E)(i) of R.R. No. 5-87 now relied upon by the CIR, is captioned "Value-added tax on sale of goods," and it expressly states that "[t]here shall be levied, assessed and collected on every sale, barter or exchange of goods, a value added tax x x x." Section 100 should be read in light of Section 99, which lays down the general rule on which persons are liable for VAT in the first place and on what transaction if at all. It may even be noted that Section 99 is the very first provision in Title IV of the Tax Code, the Title that covers VAT in the law. Before any portion of Section 100, or the rest of the law for that matter, may be applied in order to subject a transaction to VAT, it must first be satisfied that the taxpayer and transaction involved is liable for VAT in the first place under Section 99.It would have been a different matter if Section 100 purported to define the phrase "in the course of trade or business" as expressed in Section 99. If that were so, reference to Section 100 would have been necessary as a means of ascertaining whether the sale of the vessels was "in the course of trade or business," and thus subject toVAT. But that is not the case. What Section 100 and Section 4(E)(i) of R.R. No. 5-87 elaborate on is not the meaning of "in the course of trade or business," but instead the identification of the transactions which may be deemed as sale. It would become necessary to ascertain whether under those two provisions the transaction may be deemed a sale, only if it is settled that the transaction occurred in the course of trade or business in the first place. If the transaction transpired outside the course of trade or business, it would be irrelevant for the purpose of determining VAT liability whether the transaction may be deemed sale, since it anyway is not subject to VAT.Accordingly, the Court rules that given the undisputed finding that the transaction in question was not made in the course of trade or business of the seller, NDC that is, the sale is not subject to VAT pursuant to Section 99 of the Tax Code, no matter how the said sale may hew to those transactions deemed sale as defined under Section 100.In any event, even if Section 100 or Section 4 of R.R. No. 5-87 were to find application in this case, the Court finds the discussions offered on this point by the CTA and the Court of Appeals (in its subsequent Resolution) essentially correct. Section 4 (E)(i) of R.R. No. 5-87 does classify as among the transactions deemed sale those involving "change of ownership of business." However, Section 4(E) of R.R. No. 5-87, reflecting Section 100 of the Tax Code, clarifies that such "change of ownership" is only an attending circumstance to "retirement from or cessation of business[, ] with respect to all goods on hand [as] of the date of such retirement or cessation."25Indeed, Section 4(E) of R.R. No. 5-87 expressly characterizes the "change of ownership of business" as only a "circumstance" that attends those transactions "deemed sale," which are otherwise stated in the same section.26WHEREFORE, the petition is DENIED. No costs.

COMMISSIONER OF INTERNAL REVENUE,Petitioner,- versus -SONY PHILIPPINES, INC.,Respondent.

X ---------------------------------------------------------------------------------------XD E C I S I O NMENDOZA,J.This petition for review oncertiorariseeks to set aside the May 17, 2007 Decision and the July 5, 2007 Resolution of the Court of Tax Appeals En Banc[1](CTA-EB),in C.T.A. EB No. 90, affirming the October 26, 2004 Decision of the CTA-First Division[2]which, in turn, partially granted the petition for review of respondent Sony Philippines, Inc.(Sony).The CTA-First Division decision cancelled the deficiency assessment issued by petitioner Commissioner of Internal Revenue(CIR)against Sony for Value Added Tax(VAT)but upheld the deficiency assessment for expanded withholding tax(EWT)in the amount ofP1,035,879.70 and the penalties for late remittance of internal revenue taxes in the amount ofP1,269, 593.90.[3]THE FACTS:On November 24, 1998, the CIR issued Letter of Authority No. 000019734(LOA 19734)authorizing certain revenue officers to examine Sonys books of accounts and other accounting records regarding revenue taxes forthe period 1997 and unverified prior years.On December 6, 1999, a preliminary assessment for 1997 deficiency taxes and penalties was issued by the CIR which Sony protested.Thereafter, acting on the protest, the CIR issued final assessment notices, the formal letter of demand and the details of discrepancies.[4]Said details of the deficiency taxes and penalties for late remittance of internal revenue taxes are as follows:Sony sought re-evaluation of the aforementioned assessment by filing a protest on February 2, 2000. Sony submitted relevant documents in support of its protest on the 16thof that same month.[6]On October 24, 2000, within 30 days after the lapse of 180 days from submission of the said supporting documents to the CIR, Sony filed a petition for review before the CTA.[7]After trial, the CTA-First Division disallowed the deficiency VAT assessment because the subsidized advertising expense paid by Sony which was duly covered by a VAT invoice resulted in an input VAT credit. As regards the EWT, the CTA-First Division maintained the deficiency EWT assessment on Sonys motor vehicles and on professional fees paid to general professional partnerships.It also assessed the amounts paid to sales agents as commissions with five percent (5%) EWT pursuant to Section 1(g) of Revenue Regulations No. 6-85. The CTA-First Division, however, disallowed the EWT assessment on rental expense since it found that the total rental deposit ofP10,523,821.99 was incurred from January to March 1998 which was again beyond the coverage of LOA 19734. Except for the compromise penalties, the CTA-First Division also upheld the penalties for the late payment of VAT on royalties, for late remittance of final withholding tax on royalty as of December 1997 and for the late remittance of EWT by some of Sonys branches.[8]In sum, the CTA-First Division partly granted Sonys petition by cancelling the deficiency VAT assessment but upheld a modified deficiency EWT assessment as well as the penalties.Thus, the dispositive portion reads:WHEREFORE, the petition for review is hereby PARTIALLY GRANTED. Respondent is ORDERED to CANCEL and WITHDRAW the deficiency assessment for value-added tax for 1997 for lack of merit. However, the deficiency assessments for expanded withholding tax and penalties for late remittance of internal revenue taxes are UPHELD.Accordingly, petitioner is DIRECTED to PAY the respondent the deficiency expanded withholding tax in the amount ofP1,035,879.70 and the following penalties for late remittance of internal revenue taxes in the sum ofP1,269,593.90:1.VAT on RoyaltyP429,242.072.Withholding Tax on Royalty831,428.203.EWT of Petitioners Branches8,923.63TotalP1,269,593.90Plus 20% delinquency interest from January 17, 2000 until fully paid pursuant to Section 249(C)(3) of the 1997 Tax Code.SO ORDERED.[9]The CIR sought a reconsideration of the above decision and submitted the following grounds in support thereof:A.The Honorable Court committed reversible error in holding that petitioner is not liable for the deficiency VAT in the amount ofP11,141,014.41;B.The Honorable court committed reversible error in holding that the commission expense in the amount of P2,894,797.00 should be subjected to 5% withholding tax instead of the 10% tax rate;C.The Honorable Court committed a reversible error in holding that the withholding tax assessment with respect to the 5% withholding tax on rental deposit in the amount ofP10,523,821.99 should be cancelled; andD.The Honorable Court committed reversible error in holding that the remittance of final withholding tax on royalties covering the period January to March 1998 was filed on time.[10]On April 28, 2005, the CTA-First Division denied the motion for reconsideration. Unfazed, the CIR filed a petition for review with the CTA-EB raising identical issues:1.Whether or not respondent (Sony) is liable for the deficiency VATin theamount of P11,141,014.41;2.Whether or not the commission expense in the amount ofP2,894,797.00 should be subjected to 10% withholding tax instead of the 5% tax rate;3.Whether or not the withholding assessment with respect to the 5% withholding tax on rental deposit in the amount ofP10,523,821.99 is proper; and4.Whether or not the remittance of final withholding tax on royalties covering the period January to March 1998 was filed outside of time.[11]Finding no cogent reason to reverse the decision of the CTA-First Division, the CTA-EB dismissed CIRs petition on May 17, 2007. CIRs motion for reconsideration was denied by the CTA-EB on July 5, 2007.The CIR is now before this Court via this petition for review relying on the very same grounds it raised before the CTA-First Division and the CTA-EB. The said grounds are reproduced below:GROUNDS FOR THE ALLOWANCE OF THE PETITIONITHE CTA EN BANC ERRED IN RULING THAT RESPONDENT IS NOT LIABLE FOR DEFICIENCY VAT IN THE AMOUNT OF PHP11,141,014.41IIAS TO RESPONDENTS DEFICIENCY EXPANDED WITHHOLDING TAX IN THE AMOUNT OF PHP1,992,462.72:A.THE CTA EN BANC ERRED IN RULING THAT THE COMMISSION EXPENSE IN THE AMOUNT OF PHP2,894,797.00 SHOULD BE SUBJECTED TO A WITHHOLDING TAX OF 5% INSTEAD OF THE 10% TAX RATE.B.THE CTA EN BANC ERRED IN RULING THAT THE ASSESSMENT WITH RESPECT TO THE 5% WITHHOLDING TAX ON RENTAL DEPOSIT IN THE AMOUNT OF PHP10,523,821.99 IS NOT PROPERIITHE CTA EN BANC ERRED IN RULING THAT THE FINAL WITHHOLDING TAX ON ROYALTIES COVERING THE PERIOD JANUARY TO MARCH 1998 WAS FILED ON TIME.[12]Upon filing of Sonys comment, the Court ordered the CIR to file its reply thereto. The CIR subsequently filed a manifestation informing the Court that it would no longer file a reply. Thus, on December 3, 2008, the Court resolved to give due course to the petition and to decide the case on the basis of the pleadings filed.[13]The Court finds no merit in the petition.The CIR insists that LOA 19734, although it states the period 1997 and unverified prior years, should be understood to mean the fiscal year ending in March 31, 1998.[14]The Court cannot agree.Based on Section 13 of the Tax Code, a Letter of Authority or LOA is the authority given to the appropriate revenue officer assigned to perform assessment functions. It empowers or enables said revenue officer to examine the books of account and other accounting records of a taxpayer for the purpose of collecting the correct amount of tax.[15]The very provision of the Tax Code that the CIR relies on is unequivocal with regard to its power to grant authority to examine and assess a taxpayer.SEC. 6.Power of the Commissioner to Make Assessments andPrescribe Additional Requirements for Tax Administration and Enforcement.(A)Examination of Returns and Determination of tax Due. After a return has been filed as required under the provisions of this Code, the Commissioner or his duly authorized representativemay authorize the examination of any taxpayer and the assessment of the correct amount of tax:Provided,however, That failure to file a return shall not prevent the Commissioner fromauthorizing the examination of any taxpayer.x x x [Emphases supplied]Clearly, there must be a grant of authority before any revenue officer can conduct an examination or assessment.Equally important is that the revenue officer so authorized must not go beyond the authority given.In the absence of such an authority, the assessment or examination is a nullity.As earlier stated, LOA 19734 covered the period 1997 and unverified prior years. For said reason, the CIR acting through its revenue officers went beyond the scope of their authority because the deficiency VAT assessment they arrived at was based on records from January to March 1998 or using the fiscal year which ended in March 31, 1998. As pointed out by the CTA-First Division in its April 28, 2005 Resolution, the CIR knew which period should be covered by the investigation. Thus, if CIR wanted or intended the investigation to include the year 1998, it should have done so by including it in the LOA or issuing another LOA.Upon review, the CTA-EB even added that the coverage of LOA 19734, particularly the phrase and unverified prior years, violated Section C of Revenue Memorandum Order No. 43-90 dated September 20, 1990, the pertinent portion of which reads:3. A Letter of Authority should coverataxable period not exceeding one taxable year.The practice of issuing L/As covering audit of unverified prior years is hereby prohibited. If the audit of a taxpayer shall include more than one taxable period, the other periods or years shall be specifically indicated in the L/A.[16][Emphasis supplied]On this point alone, the deficiency VAT assessment should have been disallowed. Be that as it may, the CIRs argument, that Sonys advertising expense could not be considered as an input VAT credit because the same was eventually reimbursed by Sony International Singapore(SIS),is also erroneous.The CIR contends that since Sonys advertising expense was reimbursed by SIS, the former never incurred any advertising expense. As a result, Sony is not entitled to a tax credit. At most, the CIR continues, the said advertising expense should be for the account of SIS, and not Sony.[17]The Court is not persuaded. As aptly found by the CTA-First Division and later affirmed by the CTA-EB, Sonys deficiency VAT assessment stemmed from the CIRs disallowance of the input VAT credits that should have been realized from the advertising expense of the latter.[18]It is evident under Section 110[19]of the 1997 Tax Code that an advertising expense duly covered by a VAT invoice is a legitimate business expense. This is confirmed by no less than CIRs own witness, Revenue Officer Antonio Aluquin.[20]There is also no denying that Sony incurred advertising expense.Aluquin testified that advertising companies issued invoices in the name of Sony and the latter paid for the same.[21]Indubitably, Sony incurred and paid for advertising expense/ services. Where the money came from is another matter all together but will definitely not change said fact.The CIR further argues that Sony itself admitted that the reimbursement from SIS was income and, thus, taxable. In support of this, the CIR cited a portion of Sonys protest filed before it:The fact that due to adverse economic conditions, Sony-Singapore has granted to our client a subsidy equivalent to the latters advertising expenses will not affect the validity of the input taxes from such expenses. Thus, at the most, this is an additional income of our client subject to income tax. We submit further that our client is not subject to VAT on the subsidy income as this was not derived from the sale of goods or services.[22]Insofar as the above-mentioned subsidy may be considered as income and, therefore, subject to income tax, the Court agrees.However, the Court does not agree that the same subsidy should be subject to the 10% VAT. To begin with, the said subsidy termed by the CIR as reimbursement was not even exclusively earmarked for Sonys advertising expense for it was but an assistance or aid in view of Sonys dire or adverse economic conditions, and was only equivalent to the latters (Sonys) advertising expenses.Section 106 of the Tax Code explains when VAT may be imposed or exacted. Thus:SEC. 106.Value-added Tax on Sale of Goods or Properties.(A) Rate and Base of Tax. There shall be levied, assessed and collected on every sale, barter or exchange of goods or properties, value-added tax equivalent to ten percent (10%) of the gross selling price or gross value in money of the goods or properties sold, bartered or exchanged, such tax to be paid by the seller or transferor.Thus, there must be a sale, barter or exchange of goods or properties before any VAT may be levied. Certainly, there was no such sale, barter or exchange in the subsidy given by SIS to Sony.It was but a dole out by SIS and not in payment for goods or properties sold, bartered or exchanged by Sony.In the case ofCIR v. Court of Appeals (CA),[23]the Court had the occasion to rule that services rendered for a fee even on reimbursement-on-cost basis only and without realizing profit are also subject to VAT.The case, however, is not applicable to the present case. In that case, COMASERCO rendered service to its affiliates and, in turn, the affiliates paid the former reimbursement-on-cost which means that it was paid the cost or expense that it incurred although without profit. This is not true in the present case. Sony did not render any service to SIS at all. The services rendered by the advertising companies, paid for by Sony using SIS dole-out, were for Sony and not SIS. SIS just gave assistance to Sony in the amount equivalent to the latters advertising expense but never received any goods, properties or service from Sony.Regardingthe deficiency EWT assessment, more particularly Sonys commission expense, the CIR insists that said deficiency EWT assessment is subject to the ten percent (10%) rate instead of the five percent (5%) citing Revenue Regulation No. 2-98 dated April 17, 1998.[24]The said revenue regulation provides that the 10% rate is applied when the recipient of the commission income is a natural person. According to the CIR, Sonys schedule of Selling, General and Administrative expenses shows the commission expense as commission/dealer salesman incentive, emphasizing the word salesman.On the other hand, the application of the five percent (5%) rate by the CTA-First Division is based on Section 1(g) of Revenue RegulationsNo. 6-85 which provides:(g) Amounts paid to certain Brokers and Agents. On gross payments to customs, insurance, real estate and commercial brokers and agents of professional entertainers five per centum (5%).[25]In denying the very same argument of the CIR in its motion for reconsideration, the CTA-First Division, heldx x x, commission expense is indeed subject to 10% withholding tax but payments made to broker is subject to 5% withholding tax pursuant to Section 1(g) of Revenue Regulations No. 6-85. While the commission expense in the schedule of Selling, General and Administrative expenses submitted by petitioner (SPI) to the BIR is captioned as commission/dealer salesman incentive the same does not justify the automatic imposition of flat 10% rate. As itemized by petitioner, such expense is composed of Commission Expense in the amount of P10,200.00 and Broker Dealer of P2,894,797.00.[26]The Court agrees with the CTA-EB when it affirmed the CTA-First Division decision.Indeed, the applicable rule is Revenue RegulationsNo. 6-85, as amended by Revenue Regulations No. 12-94, which was the applicable rule during the subject period of examination and assessment as specified in the LOA.Revenue Regulations No. 2-98, cited by the CIR, was only adopted in April 1998 and, therefore, cannot be applied in the present case.Besides, the withholding tax on brokers and agents was only increased to 10% much later or by the end of July 2001 under Revenue Regulations No.6-2001.[27]Until then, the rate was only 5%.The Court also affirms the findings of both the CTA-First Division and the CTA-EB on the deficiency EWT assessment on the rental deposit. According to their findings, Sony incurred the subject rental deposit in the amount ofP10,523,821.99 only from January to March 1998.As stated earlier, in the absence of the appropriate LOA specifying the coverage, the CIRs deficiency EWT assessment from January to March 1998, is not valid and must be disallowed.Finally, the Court now proceeds to the third ground relied upon by the CIR.The CIR initially assessed Sony to be liable for penalties for belated remittance of its FWT on royalties (i) as of December 1997; and (ii) for the period from January to March 1998. Again, the Court agrees with the CTA-First Division when it upheld the CIR with respect to the royalties for December 1997 but cancelled that from January to March 1998.The CIR insists that under Section 3[28]of Revenue RegulationsNo. 5-82 and Sections 2.57.4 and 2.58(A)(2)(a)[29]of Revenue RegulationsNo. 2-98, Sony should also be made liable for the FWT on royalties from January to March of 1998. At the same time, it downplays the relevance of the Manufacturing License Agreement (MLA) between Sony and Sony-Japan, particularly in the payment of royalties.The above revenue regulations provide the manner of withholding remittance as well as the payment of final tax on royalty. Based on the same, Sony is required to deduct and withhold final taxes on royalty payments when the royalty is paid or is payable. After which, the corresponding return and remittance must be made within 10 days after the end of each month. The question now is when does the royalty become payable?Under Article X(5) of the MLA between Sony and Sony-Japan, the following terms of royalty payments were agreed upon:(5)Within two (2) months following each semi-annual period ending June 30 and December 31, the LICENSEE shall furnish to the LICENSOR a statement, certified by an officer of the LICENSEE, showing quantities of the MODELS sold, leased or otherwise disposed of by the LICENSEE during such respective semi-annual period and amount of royalty due pursuant this ARTICLE X therefore, and the LICENSEE shall pay the royalty hereunder to the LICENSOR concurrently with the furnishing of the above statement.[30]Withal, Sony was to pay Sony-Japan royalty within two (2) months after every semi-annual period which ends in June 30 and December 31. However, the CTA-First Division found that there was accrual of royalty by the end of December 1997 as well as by the end of June 1998. Given this, the FWTs should have been paid or remitted by Sony to the CIR on January 10, 1998 and July 10, 1998. Thus, it was correct for the CTA-First Division and the CTA-EB in ruling that the FWT for the royalty from January to March 1998 was seasonably filed. Although the royalty from January to March 1998 was well within the semi-annual period ending June 30, which meant that the royalty may be payable until August 1998 pursuant to the MLA, the FWT for said royalty had to be paid on or before July 10, 1998 or 10 days from its accrual at the end of June 1998. Thus, when Sony remitted the same on July 8, 1998, it was not yet late.In view of the foregoing, the Court finds no reason to disturb the findings of the CTA-EBSECOND DIVISION

KEPCO PHILIPPINES CORPORATION,Petitioner,COMMISSIONER OF INTERNALREVENUE,

MENDOZA,J.:This is a petition for review oncertiorari[1]under Rule 45 of the Rules of Courtseeking reversal of the February 20, 2008 Decision[2]of the Court of Tax AppealsEn Banc(CTA)in C.T.A. EB No. 299, which ruled that in order for petitioner to be entitled to its claim for refund/issuance of tax credit certificate representing unutilized input VAT attributable to its zero-rated sales for taxable year 2002, it must comply with the substantiation requirements under the appropriate Revenue Regulations.Petitioner KEPCO Philippines Corporation(Kepco)is a VAT-registered independent power producer engaged in the business of generating electricity.It exclusively sells electricity to National Power Corporation(NPC),an entity exempt from taxes under Section 13 of Republic Act No. 6395(RA No. 6395).[3]Records show that onDecember 4, 2001, Kepco filed an application for zero-rated sales with the Revenue District Office (RDO) No. 54 of the Bureau of Internal Revenue(BIR).Kepcos application was approved under VAT Ruling 64-01.Accordingly, for taxable year 2002, it filed four Quarterly VAT Returns declaring zero-rated sales in the aggregate amount ofP3,285,308,055.85 itemized as follows:In the course of doing business with NPC, Kepco claimed expenses reportedly sustained in connection with the production and sale of electricity with NPC.Based on Kepcos calculation, it paid input VAT amounting toP11,710,868.86 attributing the same to its zero-rated sales of electricity with NPC.The table shows the purchases and corresponding input VAT it paid.Thus, onApril 20, 2004, Kepco filed before the Commissioner of Internal Revenue(CIR)a claim for tax refund covering unutilized input VAT payments attributable to its zero-rated sales transactions for taxable year 2002.[6]Two days later, onApril 22, 2004, it filed a petition for review before the CTA.The case was docketed as C.T.A. Case No. 6965.[7]In its Answer,[8]respondent CIR averred that claims for refund were strictly construed against the taxpayer as it was similar to a tax exemption.It asserted that the burden to show that the taxes were erroneous or illegal lay upon the taxpayer.Thus, failure on the part of Kepco to prove the same was fatal to its cause of action because it was its duty to prove the legal basis of the amount being claimed as a tax refund.During the hearing, Kepco presented court-commissioned Independent Certified Public Accountant, Victor O. Machacon, who audited their bulky documentary evidence consisting of official receipts, invoices and vouchers, to prove its claim for refund of unutilized input VAT.[9]OnFebruary 26, 2007, the CTA Second Division ruled that out of the total declared zero-rated sales ofP3,285,308,055.85, Kepco was only able to properly substantiateP1,451,788,865.52 as its zero-rated sales.After factoring, only 44.19% of the validly supported input VAT payments being claimed could be considered.[10]The CTA Division used the following computation in determining Kepcos total allowable input VAT:The CTASecondDivision likewise disallowed theP5,170,914.20 of Kepcos claimed input VAT due to its failure to comply with the substantiation requirement.Specifically, the CTASecondDivision wrote:[i]nput VAT on purchases supported by invoices or official receipts stamped with TIN-VAT shall be disallowed because these purchases are not supported by VAT Invoices under the contemplation of the aforequoted invoicingrequirement.To be considered a VAT Invoice, the TIN-VAT must be printed, and not merely stamped.Consequently, purchases supported by invoices or official receipts, wherein the TIN-VAT are not printed thereon, shall not give rise to any input VAT.Likewise, input VAT on purchases supported by invoices or official receipts which are not NON-VAT are disallowed because these invoices or official receipts are not considered as VAT Invoices.Hence, the claims for input VAT on purchases referred to in item (e) are properly disallowed.[13]Accordingly, the CTA Second Division partially granted Kepcos claim for refund of unutilized input VAT for taxable year 2002.The dispositive portion of the decision[14]of the CTA Second Division reads:WHEREFORE, petitioners claim for refund is hereby PARTIALLY GRANTED.Accordingly, respondent is ORDERED to REFUND petitioner the reduced amount of TWO MILLION EIGHT HUNDRED NINETY THOUSAND FIVE PESOS AND 96/100 (P2,890,005.96) representing unutilized input value-added tax for taxable year 2002.SO ORDERED.[15]Kepco moved for partial reconsideration, but the CTASecondDivision denied it in itsJune 28, 2007Resolution.[16]On appeal to the CTAEn Banc,[17]Kepco argued that the CTA Second Division erred in not consideringP8,691,873.81 in addition toP2,890,005.96 as refundable tax credit for Kepcos zero-rated sales to NPC for taxable year 2002OnFebruary 20, 2008, the CTAEn Bancdismissed the petition[18]and ruled that in order for Kepco to be entitled to its claim for refund/issuance of tax credit certificate representing unutilized input VAT attributable to its zero-rated sales for taxable year 2002, it must comply with the substantiation requirements under the appropriate Revenue Regulations, i.e. Revenue Regulations 7-95.[19]Thus, it concluded that the Court in Division was correct in disallowing a portion of Kepcos claim for refund on the ground that input taxes on Kepcos purchase of goods and services were not supported by invoices and receipts printed with TIN-VAT.[20]CTA Presiding Justice Ernesto Acosta concurred with the majority in finding that Kepcos claim could not be allowed for lack of proper substantiation but expressed his dissent on the denial of certain claims,[21]to wit:[I] dissent with regard to the denial of the amountP4,720,725.63 for nothingin the law allows the automatic invalidation of official receipts/invoices which were not imprinted with TIN-VAT; and further reduction of petitioners claim representing input VAT on purchase of goods not supported by invoices in the amount ofP64,509.50 and input VAT on purchase of services not supported by official receipts in the amount ofP256,689.98, because the law makes use of invoices and official receipts interchangeably.Both can validly substantiate petitioners claim.[22]Hence, this petition alleging the following errors:

ASSIGNMENT OF ERRORSI. THE COURT OF TAX APPEALSEN BANCGRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT HELD THAT NON-COMPLIANCE WITH THE INVOICING REQUIREMENT SHALL RESULT IN THE AUTOMATIC DENIAL OF THE CLAIM.II. THE COURT OF TAX APPEALSEN BANCGRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OF EXCESS OF JURISDICTION WHEN IT DISALLOWED PETITIONERSCLAIMONTHE GROUND THAT TIN-VAT IS NOT IMPRINTED ON THE INVOICES AND OFFICIAL RECEIPTS.III THE COURT OF TAX APPEALSEN BANCGRAVELY ABUSED ITS DISCRETION WHEN IT MADE A DISTINCTION BETWEEN INVOICES AND OFFICIAL RECEIPTS AS SUPPORTING DOCUMENTS TO CLAIM FOR AN INPUT VAT REFUND.[23]At the outset, the Court has noticed that although this petition is denominated as Petition for Review onCertiorariunder Rule 45 of the Rules of Court, Kepco, in its assignment of errors, impugns against the CTAEn Bancgrave abuse of discretion amounting to lack or excess of jurisdiction, which are grounds in a petition forcertiorariunder Rule 65 of the Rules of Court.Time and again, the Court has emphasized that there is a whale of difference between a Rule 45 petition (Petition for Review on Certiorari) and a Rule 65 petition (Petition for Certiorari.)A Rule 65 petition is an original action that dwells on jurisdictional errors of whether a lower court acted without or in excess of its jurisdiction or with grave abuse of discretion.[24]A Rule 45 petition, on the other hand, is a mode of appeal which centers on the review on the merits of a judgment, final order or award rendered by a lower court involving purely questions of law.[25]Thus, imputing jurisdictional errors against the CTA is not proper in this Rule 45 petition.Kepco failed to follow the correct procedure. On this point alone, the Court can deny the subject petition outright.At any rate, even if the Court would disregard this procedural flaw, the petition would still fail.Kepco argues that the 1997 National Internal Revenue Code(NIRC)does not require the imprinting of the word zero-rated on invoices and/or official receipts covering zero-rated sales.[26]It claims that Section 113 in relation to Section 237 of the 1997 NIRC does not mention the requirement of imprinting the words zero-rated to purchases covering zero-rated transactions.[27]Only Section 4.108-1 of Revenue Regulation No. 7-95(RR No. 7-95)required the imprinting of the word zero-rated on the VAT invoice or receipt.[28]Thus, Section 4.108-1 of RR No. 7-95 cannot be considered as a valid legislation considering the long settled rule that administrative rules and regulations cannot expand the letter and spirit of the law they seek to enforce.[29]The Court does not agree.The issue of whether the word zero-rated should be imprinted on invoices and/or official receipts as part of the invoicing requirement has been settled in the case ofPanasonic Communications Imaging Corporation of the Philippines vs. Commissioner of Internal Revenue[30]and restated in the later case ofJ.R.A. Philippines, Inc. v. Commissioner.[31]In the first case, Panasonic Communications Imaging Corporation(Panasonic),a VAT-registered entity, was engaged in the production and exportation of plain paper copiers and their parts and accessories.From April 1998 toMarch 31, 1999, Panasonicgenerated export sales amounting to US$12,819,475.15 and US$11,859,489.78 totaling US$24,678,964.93.Thus, it paid input VAT ofP9,368,482.40 that it attributed to its zero-rated sales. It filed applications for refund or tax credit on what it had paid.The CTA denied its application.Panasonics export sales were subject to 0% VAT under Section 106(A)(2)(a)(1) of the 1997 NIRC but it did not qualify for zero-rating because the word zero-rated was not printed on Panasonics export invoices. This omission, according to the CTA, violated the invoicing requirements of Section 4.108-1 of RR No. 7-95.Panasonic argued, however, that in requiring the printing on its sales invoices of the word zero-rated, the Secretary of Finance unduly expanded, amended, and modified by a mere regulation (Section 4.108-1 of RR No.7-95) the letter and spirit of Sections 113 and 237 of the 1997 NIRC, prior to their amendment by R.A. 9337.[32]Panasonic stressed that Sections 113 and 237 did not necessitate the imprinting of the word zero-rated for its zero-rated sales receipts or invoices. The BIR integrated this requirement only after the enactment of R.A. No. 9337 onNovember 1, 2005, a law that was still inexistent at the time of the transactions.DenyingPanasonicsclaim for refund, the Court stated:Section 4.108-1 of RR 7-95 proceeds from the rule-making authority granted to the Secretary of Finance under Section 245 of the 1977 NIRC (Presidential Decree 1158) for the efficient enforcement of the tax code and of course its amendments. The requirement is reasonable and is in accord with the efficient collection of VAT from the covered sales of goods and services. As aptly explained by the CTAs First Division, the appearance of the word zero-rated on the face of invoices covering zero-rated sales prevents buyers from falsely claiming input VAT from their purchases when no VAT was actually paid. If, absent such word, a successful claim for input VAT is made, the government would be refunding money it did not collect.Further, the printing of the word zero-rated on the invoice helps segregate sales that are subject to 10% (now 12%) VAT from those sales that are zero-rated. Unable to submit the proper invoices, petitioner Panasonic has been unable to substantiate its claim for refund.[33]Following said ruling,Section 4.108-1 of RR 7-95[34]neither expanded nor supplanted the tax code but merely supplemented what the tax code already defined and discussed.In fact, the necessity of indicating zero-rated into VAT invoices/receipts became more apparent when the provisions of this revenue regulation was later integrated into RA No. 9337,[35]the amendatory law of the 1997 NIRC.Section 113, in relation to Section 237 of the 1997 NIRC, as amended by RA No. 9337, now reads:SEC. 113.Invoicing and Accounting Requirements for VAT-Registered Persons.-(A)Invoicing Requirements.- A VAT-registered person shall issue:(1) AVAT invoicefor every sale, barter or exchange of goods or properties;and(2) AVAT official receiptfor every lease of goods or properties, and for every sale, barter or exchange of services.(B)Information Contained in the VAT Invoice or VAT Official Receipt.- The following information shall be indicated in the VAT invoice or VAT official receipt:(1) A statement that the seller is a VAT-registered person, followed by his taxpayer's identification number (TIN);(2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value-added tax:Provided,That:(a) The amount of the tax shall be shown as a separate item in the invoice or receipt;(b) If the sale is exempt from value-added tax, the term "VAT-exempt sale" shall be written or printed prominently on the invoice or receipt;(c) If the sale is subject to zero percent (0%) value-added tax, the term "zero-rated sale" shall bewritten or printed prominently on the invoice or receipt;(d) If the sale involves goods, properties or services some of which are subject to and some of which are VAT zero-rated or VAT-exempt, the invoice or receipt shall clearly indicate the breakdown of the sale price between its taxable, exempt and zero-rated components, and the calculation of the value-added tax on each portion of the sale shall be shown on the invoice or receipt:Provided,That the seller may issue separate invoices or receipts for the taxable, exempt, and zero-rated components of the sale.(3) The date of transaction, quantity, unit cost and description of the goods or properties or nature of the service; and(4) In the case of sales in the amount of one thousand pesos (P1,000) or more where the sale or transfer is made to a VAT-registered person, the name, business style, if any, address and taxpayer identification number (TIN) of the purchaser, customer or client.(C)Accounting Requirements.- Notwithstanding the provisions of Section 233, all persons subject to the value-added tax under Sections 106 and 108 shall, in addition to the regular accounting records required, maintain a subsidiary sales journal and subsidiary purchase journal on which the daily sales and purchases are recorded. The subsidiary journals shall contain such information as may be required by the Secretary of Finance.SEC. 237.Issuance of Receipts or Sales or Commercial Invoices.- All persons subject to an internal revenue tax shall, for each sale and transfer of merchandise or for services rendered valued at Twenty-five pesos (P25.00) or more, issue duly registered receipts or sale or commercial invoices, prepared at least in duplicate, showing the date of transaction, quantity, unit cost and description of merchandise or nature of service: Provided, however, That where the receipt is issued to cover payment made as rentals, commissions, compensation or fees, receipts or invoices shall be issued which shall show the name, business style, if any, and address of the purchaser, customer or client.The original of each receipt or invoice shall be issued to the purchaser, customer or client at the time the transaction is effected, who, if engaged in business or in the exercise of profession, shall keep and preserve the same in his place of business for a period of three (3) years from the close of the taxable year in which such invoice or receipt was issued, while the duplicate shall be kept and preserved by the issuer, also in his place of business, for a like period.The Commissioner may, in meritorious cases, exempt any person subject to an internal revenue tax from compliance with the provisions of this Section. [Emphases suppliedEvidently, as it failed to indicate in its VAT invoices and receipts that the transactions were zero-rated, Kepco failed to comply with the correct substantiation requirement for zero-rated transactions.

Kepco then argues that non-compliance of invoicing requirements should not result in the denial of the taxpayers refund claim.CitingAtlas Consolidated Mining & Development Corporation vs. Commissioner of Internal Revenue,[36]it claims that a party who fails to issue VAT official receipts/invoices for its sales should only be imposed penalties as provided under Section 264 of the 1997 NIRC.[37]The Court has read theAtlasdecision, and has not com. It merely recited Section 263 which provided for penalties in case ofFailure or refusal to Issue Receipts or Sales or Commercial Invoices, Violations related to the Printing of such Receipts or Invoices and Other Violations.It does not categorically say that the claimant should be refunded.At any rate,Section 264 (formerly Section 263)[38]of the 1997 NIRC was not intended to excuse the compliance of the substantive invoicing requirement needed to justify a claim for refund on input VAT payments.Furthermore, Kepco insists that Section 4.108.1 of Revenue Regulation 07-95 does not require t e across any categorical ruling that refund should be allowed for those who had not complied with the substantiation requirementshe word TIN-VAT to be imprinted on a VAT-registered persons supporting invoices and official receipts[39]and so there is no reason for the denial of itsP4,720,725.63 claim of input tax.[40]In this regard, Internal Revenue Regulation 7-95 (Consolidated Value-Added Tax Regulations) is clear. Section 4.108-1 thereof reads:Only VAT registered persons are required to print their TIN followed by the word VAT in their invoice or receipts and this shall be considered as a VAT Invoice.All purchases covered by invoices other than VAT Invoice shall not give rise to any input tax.Contrary to Kepcos allegation, the regulation specifically requires the VAT registered person to imprint TIN-VAT on its invoices or receipts.Thus, the Court agrees with the CTA when it wrote: [T]o be considered a VAT invoice, the TIN-VAT must be printed, and not merely stamped.Consequently, purchases supported by invoices or official receipts, wherein the TIN-VAT is not printed thereon, shall not give rise to any input VAT.Likewise, input VAT on purchases supported by invoices or official receipts which are NON-VAT are disallowed because these invoices or official receipts are not considered as VAT Invoices.[41]Kepco further argues that under Section 113(A) of the 1997 NIRC, invoices and official receipts are used interchangeably for purposes of substantiating input VAT.[42]Hence, it claims that the CTA should have accepted its substantiation of input VAT on (1)P64,509.50 on purchases of goods with official receipts and (2)P256,689.98 on purchases of services with invoices.[43]The Court is not persuaded.Under the law, aVAT invoiceis necessaryfor every sale, barter or exchange of goods or properties while aVAT official receiptproperly pertainsto every lease of goods or properties, and for every sale, barter or exchange of services.[44]InCommissioner of Internal Revenue v. Manila Mining Corporation,[45]the Court distinguished an invoice from a receipt, thus:A sales or commercial invoice is a written account of goods sold or services rendered indicating the prices charged therefor or a list by whatever name it is known which is used in the ordinary course of business evidencing sale and transfer or agreement to sell or transfer goods and services.A receipt on the other hand is a written acknowledgment of the fact of payment in money or other settlement between seller and buyer of goods, debtor or creditor, or person rendering services and client or customer.In other words, the VAT invoice is the sellers best proof of the sale of the goods or services to the buyer while the VAT receipt is the buyers best evidence of the payment of goods or services received from the seller.Even though VAT invoices and receipts are normally issued by the supplier/seller alone, the said invoices and receipts, taken collectively, are necessary to substantiate the actual amount or quantity of goods sold and their selling price (proof of transaction), and the best means to prove the input VAT payments (proof of payment).[46]Hence, VAT invoice and VAT receipt should not be confused as referring to one and the same thing.Certainly, neither does the law intend the two to be used alternatively.Although it is true that the CTA is not strictly governed by technical rules of evidence,[47]the invoicing and substantiation requirements must, nevertheless, be followed because it is the only way to determine the veracity of Kepcos claims.Verily, the CTAEn Banccorrectly disallowed the input VAT that did not meet the required standard of substantiation.The CTA is devoted exclusively to the resolution of tax-related issues and has unmistakably acquired an expertise on the subject matter.In the absence of abuse or reckless exercise of authority,[48]the CTAEn Bancs decision should be upheld.The Court has always decreed that tax refunds are in the nature of tax exemptions which represent a loss of revenue to the government. These exemptions, therefore, must not rest on vague, uncertain or indefinite inference, but should be granted only by a clear and unequivocal provision of law on the basis of language too plain to be mistaken. Such exemptions must be strictly construed against the taxpayer, as taxes are the lifeblood of the government.[49]WHEREFORE, the petition isDENIED.

RENATO DIAZ, URORAMA. F. TIMBOL,Petitioners,Present:CORONA,C.J.,CARPIO,VELASCO, JR.,LEONARDO-DE CASTRO,BRION,- versus -PERALTA,.THE SECRETARY OF FINANCEand THE COMMISSIONER OFPromulgated:INTERNAL REVENUE,Respondents.July 19, 2011x ---------------------------------------------------------------------------------------- xMay toll fees collected by tollway operators be subjected to value- added tax?

The Facts and the CasePetitioners Renato V. Diaz and Aurora Ma. F. Timbol (petitioners) filed this petition for declaratory relief[1]assailing the validity of the impending imposition of value-added tax (VAT) by the Bureau of Internal Revenue (BIR) on the collections of tollway operators.Petitioners claim that, since the VAT would result in increased toll fees, they have an interest as regular users of tollways in stopping the BIR action.Additionally, Diaz claims that he sponsored the approval of Republic Act 7716 (the 1994 Expanded VAT Law or EVAT Law) and Republic Act 8424 (the 1997 National Internal Revenue Code or the NIRC) at the House of Representatives.Timbol, on the other hand, claims that she served as Assistant Secretary of the Department of Trade and Industry and consultant of the Toll Regulatory Board (TRB) in the past administration.Petitioners allege that the BIR attempted during the administration of President Gloria Macapagal-Arroyo to impose VAT on toll fees. The imposition was deferred, however, in view of the consistent opposition of Diaz and other sectors to such move. But, upon President Benigno C. Aquino IIIs assumption of office in 2010, the BIR revived the idea and would impose the challenged tax on toll fees beginning August 16, 2010 unless judicially enjoined.Petitioners hold the view that Congress did not, when it enacted the NIRC, intend to include toll fees within the meaning of sale of services that are subject to VAT; that a toll fee is a users tax, not a sale of services; that to impose VAT on toll fees would amount to a tax on public service; and that, since VAT was never factored into the formula for computing toll fees, its imposition would violate the non-impairment clause of the constitution.On August 13, 2010 the Court issued a temporary restraining order (TRO), enjoining the implementation of the VAT. The Court required the government, represented by respondents Cesar V. Purisima, Secretary of the Department of Finance, and Kim S. Jacinto-Henares, Commissioner of Internal Revenue, to comment on the petition within 10 days from notice.[2]Later, the Court issued another resolution treating the petition as one for prohibition.[3]On August 23, 2010 the Office of the Solicitor General filed the governments comment.[4]The government avers that the NIRC imposes VAT on all kinds of services of franchise grantees, including tollway operations, except where the law provides otherwise; that the Court should seek the meaning and intent of the law from the words used in the statute; and that the imposition of VAT on tollway operations has been the subject as early as 2003 of several BIR rulings and circulars.[5]The government also argues that petitioners have no right to invoke the non-impairment of contracts clause since they clearly have no personal interest in existing toll operating agreements (TOAs) between the government and tollway operators.At any rate, the non-impairment clause cannot limit the States sovereign taxing power which is generally read into contracts.Finally, the government contends that the non-inclusion of VAT in the parametric formula for computing toll rates cannot exempt tollway operators from VAT.In any event, it cannot be claimed that the rights of tollway operators to a reasonable rate of return will be impaired by the VAT since this is imposed on top of the toll rate.Further, the imposition of VAT on toll fees would have very minimal effect on motorists using the tollways.In their reply[6]to the governments comment, petitioners point out that tollway operators cannot be regarded as franchise grantees under the NIRC since they do not hold legislative franchises.Further, the BIR intends to collect the VAT by rounding off the toll rate and putting any excess collection in an escrow account.But this would be illegal since only the Congress can modify VAT rates and authorize its disbursement.Finally, BIR Revenue Memorandum Circular 63-2010 (BIR RMC 63-2010), which directs toll companies to record an accumulated input VAT of zero balance in their books as of August 16, 2010, contravenes Section 111 of the NIRC which grants entities that first become liable to VAT a transitional input tax credit of 2% on beginning inventory.For this reason, the VAT on toll fees cannot be implemented.The Issues PresentedThe case presents two procedural issues:1.Whether or not the Court may treat the petition for declaratory relief as one for prohibition; and2.Whether or not petitioners Diaz and Timbol have legal standing to file the action.The case also presents two substantive issues:1.Whether or not the government is unlawfully expanding VAT coverage by including tollway operators and tollway operations in the terms franchise grantees and sale of services under Section 108 of the Code; and2.Whether or not the imposition of VAT on tollway operators a) amounts to a tax on tax and not a tax on services; b) will impair the tollway operators right to a reasonable return of investment under their TOAs; and c) is not administratively feasible and cannot be implemented.The Courts RulingsA.On the Procedural Issues:On August 24, 2010 the Court issued a resolution, treating the petition as one for prohibition rather than one for declaratory relief, the characterization that petitioners Diaz and Timbol gave their action. The government has sought reconsideration of the Courts resolution,[7]however, arguing that petitioners allegations clearly made out a case for declaratory relief, an action over which the Court has no original jurisdiction.The government adds, moreover, that the petition does not meet the requirements of Rule 65 for actions for prohibition since the BIR did not exercise judicial, quasi-judicial, or ministerial functions when it sought to impose VAT on toll fees.Besides, petitioners Diaz and Timbol has a plain, speedy, and adequate remedy in the ordinary course of law against the BIR action in the form of an appeal to the Secretary of Finance.But there are precedents for treating a petition for declaratory relief as one for prohibition if the case has far-reaching implications and raises questions that need to be resolved for the public good.[8]The Court has also held that a petition for prohibition is a proper remedy to prohibit or nullify acts of executive officials that amount to usurpation of legislative authority.[9]Here, the imposition of VAT on toll fees has far-reaching implications.Its imposition would impact, not only on the more than half a million motorists who use the tollways everyday, but more so on the governments effort to raise revenue for funding various projects and for reducing budgetary deficits.To dismiss the petition and resolve the issues later, after the challenged VAT has been imposed, could cause more mischief both to the tax-paying public and the government.A belated declaration of nullity of the BIR action would make any attempt to refund to the motorists what they paid an administrative nightmare with no solution.Consequently, it is not only the right, but the duty of the Court to take cognizance of and resolve the issues that the petition raises.Although the petition does not strictly comply with the requirements of Rule 65, the Court has ample power to waive such technical requirements when the legal questions to be resolved are of great importance to the public. The same may be said of the requirement oflocus standiwhich is a mere procedural requisite.[10]B.On the Substantive Issues:One.The relevant law in this case is Section 108 of the NIRC, as amended.VAT is levied, assessed, and collected, according to Section 108, on the gross receipts derived from the sale or exchange of services as well as from the use or lease of properties. The third paragraph of Section 108 defines sale or exchange of services as follows:The phrase sale or exchange of services means the performance of all kinds of services in the Philippines for others for a fee, remuneration or consideration, including those performed or rendered by construction and service contractors; stock, real estate, commercial, customs and immigration brokers; lessors of property, whether personal or real; warehousing services; lessors or distributors of cinematographic films; persons engaged in milling, processing, manufacturing or repacking goods for others; proprietors, operators or keepers of hotels, motels, resthouses, pension houses, inns, resorts; proprietors or operators of restaurants, refreshment parlors, cafes and other eating places, including clubs and caterers; dealers in securities; lending investors; transportation contractors on their transport of goods or cargoes, including persons who transport goods or cargoes for hire and other domestic common carriers by land relative to their transport of goods or cargoes; common carriers by air and sea relative to their transport of passengers, goods or cargoes from one place in the Philippines to another place in the Philippines; sales of electricity by generation companies, transmission, and distribution companies;services of franchise grantees of electric utilities, telephone and telegraph, radio and television broadcasting and all other franchise grantees except those under Section 119 of this Codeand non-life insurance companies (except their crop insurances), including surety, fidelity, indemnity and bonding companies; and similar services regardless of whether or not the performance thereof calls for the exercise or use of the physical or mental faculties.(Underscoring supplied)It is plain from the above that the law imposes VAT on all kinds of services rendered in thePhilippinesfor a fee, including those specified in the list.The enumeration of affected services is not exclusive.[11]By qualifying services with the words all kinds, Congress has given the term services an all-encompassing meaning.The listing of specific services are intended to illustrate how pervasive and broad is the VATs reach rather than establish concrete limits to its application.Thus, every activity that can be imagined as a form of service rendered for a fee should be deemed included unless some provision of law especially excludes it.Now, do tollway operators render services for a fee?Presidential Decree (P.D.) 1112 or the Toll Operation Decree establishes the legal basis for the services that tollway operators render.Essentially, tollway operators construct, maintain, and operate expressways, also called tollways, at the operators expense.Tollways serve as alternatives to regular public highways that meander through populated areas and branch out to local roads.Traffic in the regular public highways is for this reason slow-moving.In consideration for constructing tollways at their expense, the operators are allowed to collect government-approved fees from motorists using the tollways until such operators could fully recover their expenses and earn reasonable returns from their investments.When a tollway operator takes a toll fee from a motorist, the fee is in effect for the latters use of the tollway facilities over which the operator enjoys private proprietary rights[12]that its contract and the law recognize.In this sense, the tollway operator is no different from the following service providers under Section 108 who allow others to use their properties or facilities for a fee:1.Lessors of property, whether personal or real;2.Warehousing service operators;3.Lessors or distributors of cinematographic films;4.Proprietors, operators or keepers of hotels, motels, resthouses, pension houses, inns, resorts;5.Lending investors (for use of money);6.Transportation contractors on their transport of goods or cargoes, including persons who transport goods or cargoes for hire and other domestic common carriers by land relative to their transport of goods or cargoes; and7.Common carriers by air and sea relative to their transport of passengers, goods or cargoes from one place in thePhilippinesto another place in thePhilippines.It does not help petitioners cause that Section 108 subjects to VAT all kinds of services rendered for a fee regardless of whether or not the performance thereof calls for the exercise or use of the physical or mental faculties.This means that services to be subject to VAT need not fall under the traditional concept of services, the personal or professional kinds that require the use of human knowledge and skills.And not only do tollway operators come under the broad term all kinds of services, they also come under the specific class described in Section 108 as all other franchise grantees who are subject to VAT, except those under Section 119 of this Code.Tollway operators are franchise grantees and they do not belong to exceptions (the low-income radio and/or television broadcasting companies with gross annual incomes of less thanP10 million and gas and water utilities) that Section 119[13]spares from the payment of VAT.The word franchise broadly covers government grants of a special right to do an act or series of acts of public concern.[14]Petitioners of course contend that tollway operators cannot be considered franchise grantees under Section 108 since they do not hold legislative franchises.But nothing in Section 108 indicates that the franchise grantees it speaks of are those who hold legislative franchises.Petitioners give no reason, and the Court cannot surmise any, for making a distinction between franchises granted by Congress and franchises granted by some other government agency.The latter, properly constituted, may grant franchises. Indeed, franchises conferred or granted by local authorities, as agents of the state, constitute as much a legislative franchise as though the grant had been made by Congress itself.[15]The term franchise has been broadly construed as referring, not only to authorizations that Congress directly issues in the form of a special law, but also to those granted by administrative agencies to which the power to grant franchises has been delegated by Congress.[16]Tollway operators are, owing to the nature and object of their business, franchise grantees. The construction, operation, and maintenance of toll facilities on public improvements are activities of public consequence that necessarily require a special grant of authority from the state.Indeed, Congress granted special franchise for the operation of tollways to the Philippine National Construction Company, the former tollway concessionaire for the North and South Luzon Expressways.Apart from Congress, tollway franchises may also be granted by the TRB, pursuant to the exercise of its delegated powers under P.D. 1112.[17]The franchise in this case is evidenced by a Toll Operation Certificate.[18]Petitioners contend that the public nature of the services rendered by tollway operators excludes such services from the term sale of services under Section 108 of the Code.But, again, nothing in Section 108 supports this contention.The reverse is true.In specifically including by way of example electric utilities, telephone, telegraph, and broadcasting companies in its list of VAT-covered businesses, Section 108 opens other companies rendering public service for a fee to the imposition of VAT.Businesses of a public nature such as public utilities and the collection of tolls or charges for its use or service is a franchise.[19]Nor can petitioners cite as binding on the Court statements made by certain lawmakers in the course of congressional deliberations of the would-be law.As the Court said inSouth African Airways v. Commissioner of Internal Revenue,[20]statements made by individual members of Congress in the consideration of a bill do not necessarily reflect the sense of that body and are, consequently, not controlling in the interpretation of law.The congressional will is ultimately determined by the language of the law that the lawmakers voted on.Consequently, the meaning and intention of the law must first be sought in the words of the statute itself, read and considered in their natural, ordinary, commonly accepted and most obvious significations, according to good and approved usage and without resorting to forced or subtle construction.Two.Petitioners argue that a toll fee is a users tax and to impose VAT on toll fees is tantamount to taxing a tax.[21]Actually, petitioners base this argument on the following discussion inManila International Airport Authority (MIAA) v. Court of Appeals:[22]No one can dispute that properties of public dominion mentioned in Article 420 of the Civil Code, likeroads, canals, rivers, torrents, ports and bridges constructed by the State,are owned by the State. The term ports includes seaports and airports. TheMIAAAirportLandsand Buildings constitute a port constructed by the State. Under Article 420 of the Civil Code, theMIAAAirportLandsand Buildings are properties of public dominion and thus owned by the State or the Republic of thePhilippines.x x x The operation by the government of a tollway does not change the character of the road as one for public use. Someone must pay for the maintenance of the road, either the public indirectly through the taxes they pay the government, or only those among the public who actually use the road through the toll fees they pay upon using the road.The tollway system is even a more efficient and equitable manner of taxing the public for the maintenance of public roads.The charging of fees to the public does not determine the character of the property whether it is for public dominion or not. Article 420 of the Civil Code defines property of public dominion as one intended for public use.Even if the government collects toll fees, the road is still intended for public use if anyone can use the road under the same terms and conditions as the rest of the public.The charging of fees, the limitation on the kind of vehicles that can use the road, the speed restrictions and other conditions for the use of the road do not affect the public character of the road.The terminal fees MIAA charges to passengers, as well as the landing fees MIAA charges to airlines, constitute the bulk of the income that maintains the operations of MIAA.The collection of such fees does not change the character of MIAA as an airport for public use. Such fees are often termed users tax. This means taxing those among the public who actually use a public facility instead of taxing all the public including those who never use the particular public facility. A users tax is more equitable a principle of taxation mandated in the 1987 Constitution.[23](Underscoring supplied)Petitioners assume that what the Court said above, equating terminal fees to a users tax must also pertain to tollway fees.But the main issue in theMIAAcase was whether or notParaaqueCitycould sell airport lands and buildings under MIAA administration at public auction to satisfy unpaid real estate taxes. Since local governments have no power to tax the national government, the Court held that the City could not proceed with the auction sale.MIAA forms part of the national government although not integrated in the department framework.[24]Thus, its airport lands and buildings are properties of public dominion beyond the commerce of man under Article 420(1)[25]of the Civil Code and could not be sold at public auction.As can be seen, the discussion in theMIAAcase on toll roads and toll fees was made, not to establish a rule that tollway fees are users tax, but to make the point that airport lands and buildings are properties of public dominion and that the collection of terminal fees for their use does not make them private properties.Tollway fees are not taxes.Indeed, they are not assessed and collected by the BIR and do not go to the general coffers of the government.It would of course be another matter if Congress enacts a law imposing a users tax, collectible from motorists, for the construction and maintenance of certain roadways.The tax in such a case goes directly to the government for the replenishment of resources it spends for the roadways.This is not the case here.What the government seeks to tax here are fees collected from tollways that are constructed, maintained, and operated by private tollway operators at their own expense under the build, operate, and tran