[SPIT] [Contex Corp. v. CIR] [Francisco]

SPIT | B2015 CASE DIGESTS

Contex Corp. v. CIR  July 2, 2004 Quisumbing, J. Francis G. Francisco

Contex is an SBMASBMA-reg regist istere ered d frm !i"! !i"! SUMMARY: Contex exem# exem#ts ts it $rom $rom a%% %o"a% %o"a% and nation nationa% a% intern interna% a% re&en' re&en'e e taxes ex"e#t $or t!e #re$erentia% tax #ro&ided $or in Se"tion 12 (") o$ *A +22+, Contex Contex Cor#, a%so registered registered it! t!e BI* as a non-AT tax#a.er, Contex is "%aiming a tax "redit $or 10/ AT #assed . its s'##%iers to Contex !en Contex #'r"!a #'r"!ased sed materia materia%s %s $rom $rom s'"! s'"! s'##%i s'##%iers ers,, SC !e%d !e%d t!at t!at Contex a%t!o'g! it is tr'e t!at t!e Contex Cor#, s!o'%d not !a&e een %ia%e $or t!e AT inad&ertent%. #assed on to it . its s'##%ier sin"e s'"! sa%e to an SBMA-registered frm is a ero-rated sa%e on t!e #art o$ t!e s'##%ier Contex Cor#, is not t!e #ro#er #ro#er #art. to "%aim s'"! AT AT re$'nd, Contex Cor#, is registered registered as a 343-A 343-AT T tax#a.er tax#a.er and t!'s is exem#t exem#t $rom AT AT, As an exem#t exem#t AT AT tax#a.er tax#a.er it is not a%%oed an. tax "redit on AT AT (in#'t t ax) #re&io's%. #aid, AT AT Exem#tio Exem#tion, n, An exem#tion exem#tion means DOCTRI DOCTRINE: NE: (a) t!at t!e sa%e o$ goods or #ro#erties andor ser&i"es and t!e 'se or %ease o$ #ro#erties is not s'6e"t to AT (o't#'t tax) and t!e se%%er is not a%%oed an. tax "redit on AT (in#'t tax) tax) #re&io #re&io's% 's%. . #aid, #aid, T!is T!is is a "ase "ase !erei !erein n t!e AT is remo&ed at t!e exem#t stage (i,e, at t!e #oint o$ t!e sa%e arter or ex"!ange o$ t!e goods or #ro#erties), T!e #erson ma7ing t!e exem#t sa%e o$ goods #ro#erties or ser&i"es s!a%% not i%% an. o't#'t tax to !is "'stomers e"a'se t!e said transa"tion is not s'6e"t to AT AT, 4n t!e ot!er !and a AT-r AT-registered egistered #'r"!aser o$ AT AT-exem#t goods#ro#erties or ser&i"es !i"! are exem#t $rom AT is not entit%ed to an. in#'t tax on s'"! #'r"!ase des#ite t!e iss'an"e o$ a AT AT in&oi"e or re"ei#t, () () 8ero 8ero-r -rat ated ed Sa%e Sa%es, s, T!es T!ese e are are sa%e sa%es s . ATregistered registered #ersons #ersons !i"! are s'6e"t to 0/ rate meaning t!e tax 'rden is not #assed on to t!e #'r"!aser, A erorated sa%e . a AT-registered #erson !i"! is a taxa%e

transa"tion $or AT #'r#oses s!a%% not res'%t in an. o't#'t tax, 9oe&er t!e in#'t tax on !is #'r"!ases #'r"!ases o$ goods #ro#erties or ser&i"es re%ated to s'"! ero-rated sa%e s!a%% e a&ai%a a&ai%a%e %e as tax "redit "redit or re$'nd re$'nd in a""orda a""ordan"e n"e it! it! t!ese reg'%ations, FACTS: Contex Cor#, is engaged in man'$a"t'ring !os#ita% text texti% i%es es and and garm garmen ents ts and and ot!e ot!err !os# !os#it ita% a% s'## s'##%i %ies es for export, Its #%a"e o$ 'siness is t!e S'i" Ba. ;ree#ort 8one (SB; (SB;8) 8) and and is d'%. d'%. regis egiste terred it! it! t!e t!e S'i S'i" " Ba. Ba. Metro Metro#o% #o%ita itan n A't!or A't!orit. it. (SBMA) (SBMA) as a S'i" S'i" Ba. ;ree#or ree#ortt Enter#rise Enter#rise #'rs'ant #'rs'ant to *A +22+, As an SBMA-regi SBMA-registere stered d frm frm Contex Contex Cor#, is exem# exem#tt $rom $rom a%% %o"a% and nation nationa% a% intern interna% a% re&en' re&en'e e taxes taxes ex"e# ex"e#tt $or t!e #re$er #re$erenti entia% a% tax #ro&ided $or in Se"tion 12 (") o$ *A *A +22+, Contex Cor#, a%so registered it! t!e BI* as a non-AT tax#a.er,

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