G.R. No. 148083 July 21, 2006
VELASCO, JR., J.
Lessons Applicable: senior citizen discount based on acquisition cost and as tax credit
Laws Applicable:
FACTS:
- Bicolandia Drug Corporation, a corporation engaged in the business of retailing pharmaceutical products under the business style of "Mercury Drug," granted the 20% sales discount to qualified senior citizens purchasing their medicines in compliance with R.A. No. 7432
- It then alleged error that they should have tax credit so it claimed for refund.
- CTA: Rev. Reg. No. 2-94 is null and void for being inconsistent with Sec. 4 of RA 7432 that states the discount is claimed as credit
- But, it computed the tax credit as cost of sales / gross income x 20%
- It also excluded those sales without pre-marked cash slips.
- Both CIR and petitioner appealed.
- CTA modified its decision to issue a certificate of tax credit to petitioner.
1. W/N the discount granted is based on the acquisition cost rather than actual discount granted
2. W/N petitioner can claim its refund
HELD: Petition is hereby DENIED
1. Yes. Cost refers to the amount extended to senior citizens. It shall be applied as tax credit and may be deducted from tax liability. If no current tax due or nnet loss for the period, the credit may be carried over to the succeeding taxable year.
2. No. The words of statute are clear and free from ambiguity. It must be given literal meaning. Thus, can only claim as tax credit.