DISPOSITIVE:

ACCORDINGLY, the Petition for Review on Certiorari is PARTLY GRANTED. The Decision dated July 12, 2016 and Resolution dated January 17, 2017 of the Com1 of Tax Appeals En Banc in CTA EB No. 1408, are REVERSED and SET ASIDE.

Item 11 of Revenue Memorandum Circular No. 46-2008 and Revenue Memorandum Circular No. 31-2011 are DECLARED NULL and VOID insofar as they imposed additional conditions which are not found in Section 108(B )( 4) of the 1997 National Internal Revenue Code, as amended by Republic Act No. 9337.

The case is REMANDED to the Court of Tax Appeals Third Division for the proper dete1mination of the refundable or creditable amount due to petitioner Manila Peninsula Hotel, Inc., if any.

The other charges are DISMISSED for lack of merit

SO ORDERED.”

SUBJECTS/DOCTRINES/DIGEST:

It is of no moment that the accommodation services were rendered
within the physical confines of Manila Peninsula. The core consideration
anchors on the fact that the service was rendered to a juridical person engaged
in international air transport operations and that is exclusively for its
international operations. The CTA EB, thus, erred when it concluded that Manila Peninsula’s sale of services to Delta Air could not be deemed zerorated
because the services rendered to the pilots and cabin crew of Delta Air
did not cross the Philippine territory. II4 The first requisite to qualify for zerorating
under Section I 08(B)( 4) of the NIRC, as amended, is that the service
was performed in the Philippines by a VAT-registered person. It is, therefore,
not required that the service be performed outside the Philippines.

In light of the foregoing observations, it is evident that the services
rendered by Manila Peninsula to its flight crew members in the form of hotel
room accommodations and food and beverages services during layovers
qualify for zero-rated VAT under Section 108(B)( 4) of the NIRC, as
amended. Consequently, the services were not appropriately subject to the
imposition of 12% VAT.

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SCD-2024-0012-MANILA PENINSULA HOTEL, INC VS. COMMISSIONER OF INTERNAL REVENUEDownload

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