MANILA – The Court of Tax Appeals (CTA) has ordered the Valenzuela City government to refund PHP3.8 million to the North Luzon Expressway Corporation (NLEX) in erroneously collected taxes from 2012 to 2019.
In a 33-page decision dated Nov. 18 written by Associate Justice Corazon Ferrer-Flores, the tax court ordered the refund representing erroneously collected and paid local business tax (LBT) for signage services, the related surcharge and interest and tax credited during the period.
In its ruling, the CTA cited the Local Government Code (LGC) of 1991, which provides that “when a contractor maintains or operates a branch, sales outlet or warehouse elsewhere, the recording of the sale shall be made in such branch, sales outlet or warehouse, and the corresponding business tax shall accrue and be paid to the municipality or city where the same branch, sales outlet or warehouse is located.”
The CTA said offices used only as display areas of the products where no stocks or items are stored for sale, although orders for products may be received thereat, “are not branch or sales offices.”
“In sum, since there is no showing that the signages or installations in Valenzuela City may be treated as a branch or sales office, or as a fixed place, where business transactions were held for the subject period, no valid levy or collection of LBT, including the surcharge and interest incidental thereto, on the said signages or installations may be made by respondent city government against petitioner (NLEX),” the court said.
Associate Justices Ma. Belen Ringpis-Liban and Maria Rowena Modesto-San Pedro concurred. (PNA)